In July, EU agriculture ministers agreed on a new Common Agricultural Policy (CAP) that favors “greener” farming techniques, with words like “eco-schemes” and “environmental conditionality” taking the center – stage during the talks. But, in reality, what does this mean for German agriculture? EURACTIV Germany has the story.
So-called “eco-schemes” are subsidies to farmers who voluntarily follow ecologically friendly methods, whereas “conditionality” ties direct payments to specific minimum environmental and animal welfare criteria.
These two ideas will be applied to the first pillar of the CAP, which deals with direct payments to farmers, in the future.
Germany has access to about €4.85 billion per year for these direct payments during the previous budget term, which ran from 2014 to 2020.
Under the new CAP, which is slated to take effect in 2023 following a two-year transition period, farmers will only receive 25% of direct payments if they can demonstrate that they are committed to environmentally beneficial policies established in concrete terms by member states.
By January 1, 2022, Germany must submit its strategic plan to the European Commission. However, because eco-schemes are voluntary for farmers and allow for more targeted actions, Lakner believes they are more suited than greening, a support instrument employed during the previous budget period that connected certain direct payments to environmental goals.
Subsidies received by agricultural actors from the European Agricultural Fund for Rural Development (EAFRD) are likewise related to green standards under the CAP’s second pillar. Germany received around €1.35 billion each year from the prior period of 2014 to 2020.
The EU co-finances rural development initiatives through a variety of programmes that address challenges such as competitiveness, structural transformation, sustainable management, and resource efficiency.
At least 30% of EAFRD funds must be used to fund so-called voluntary agri-environment-climate measures (AECM) in the domains of agriculture, organic farming, and animal welfare.
According to estimates from Germany’s federal food and agriculture ministry, 47 percent of monies from the EAFRD budget were devoted to environmental goals such as climate protection and forestry during the last financing cycle.
However, the financial goals of federal states differ significantly. Bavaria, for example, dedicated 75% of its finances to the environment/climate/forestry financing sector, while Schleswig-Holstein only allotted 29% to this goal.
The concrete distribution of EAFRD funds during the previous funding period, from 2014 to 2020, was primarily for environmental and climate protection measures: 21% of the budget was spent on agri-environmental and climate protection measures, while 11% was used to promote organic farming during the same period.
In Germany, federal states have a considerable say in how second-pillar monies are distributed.
These state programmes will be included in the national strategic plan, which must coincide with at least four of the EAFRD’s six goals and be submitted to the European Commission by the end of the year. These include novel management strategies, resource efficiency promotion, and the restoration, conservation, and enhancement of farm and forestry ecosystems.
In theory, this is a policy tool that can be well-designed and used to achieve significant and successful results. He cautioned, however, that this would necessitate sufficient administrative ability in the federal states to execute and control the programmes.
According to the agricultural economist, the design of the AECM for the new funding period is particularly complicated by the fact that many measures that were previously sponsored through the second pillar, such as fallow land and flowering strips, are now included in the eco-schemes.
In 2012, the EU introduced a new financing mechanism, the European Innovation Partnership on Agricultural Production and Sustainability, or EIP-AGRI, to assist farmers in achieving the green EAFRD goals.
Germany was the first EU member state to deploy this instrument for the 2014-20 funding term, according to the BMEL.
EPI-AGRI connects farmers, foresters, researchers, agri-business advisers, and other rural actors to work together on innovative projects such as resource efficiency and food and feed sustainability.