Towards a New Strategic Agenda for the Common Agricultural Policy (CAP) after 2020

Towards a New Strategic Agenda for the Common Agricultural Policy (CAP) after 2020

CEMA’s contribution to the Mid-term Review of the CAP

February 2015

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Executive Summary

The Agricultural Machinery Industry Association CEMA represents the more than 4,500 manufacturers of farm machines in Europe. Modern farm machine technology enables farmers to grow food, feed, fibre and fuel affordably and sustainably and meet the rising demand driven by global population growth.

As part of our commitment to farmers and the farming community in Europe and our aim to help making agriculture in Europe more sustainable and productive, this paper contains a number of specific ideas and proposals for:

  • a thorough assessment of the effects of the current CAP (2014-2020)
  • the development of a new strategic agenda for the next CAP (2021-2027)

 

In particular, CEMA proposes to:

1. Use productivity and Total Factor Productivity (TFP) as key concepts for the CAP’s Mid-Term Review

  • A productivity-led approach will enable:a fair evaluation of the efficiency of the set of CAP measures adopted in 2014 to restore the productivity potential of agriculture in Europe
  • a solid perspective on the inputs mix which drove any TFP gains
  • a measurement of the EU’s contribution to domestic & global food security
  • an assessment of the CAP’s impact on: farmers’ income evolution, the living conditions of farmers, and the overall attractiveness and competitiveness of the sector.

 

2. Facilitate access to Precision Agriculture (PA) through greater flexibility in the use of CAP funds

2.1. Precision Agriculture as a promoter of sustainable productivity growth in farming

  • PA is essential to drive renewed TFP growth in the EU, as growing use of smart machines and further technological progress will help to boost farm output, raise farmers’ income, and promote sustainability in farming. In light of this:
  • the benefits of PA in terms of managing the CAP (in terms of improvement of crop models and supporting the IACS) should be properly assessed in the Mid-Term Review.
  • it should be assessed how new technologies can help to cut red-tape costs and administrative burden for farmers generated by the greening measures of the CAP.

2.2. Give more flexibility within Pillar 1 & 2 to facilitate access to, and uptake of, new technologies that make agriculture more sustainable and productive

  • CEMA encourages EU policy makers to re-establish a mechanism similar to Articles 68 & 69 of the previous CAP (2007-2013) allowing Member States to dedicate 10% of their Pillar 1 budget envelope to specific projects aimed at enhancing farm holdings’ productivity
  • This mechanism could be applied either to Pillar 1 (for a certain percentage of the total envelope – i.e. 5% up to 10%) or Pillar 2 for any unspent budget. These amounts could be allocated to pilot projects demonstrating, e.g. efficient use of land in marginal or constrained agricultural areas, sustainable use of water and inputs, yield optimization and integrated farm management.

 

3. Consider new policy approaches for the CAP after 2020

3.1. Shifting CAP resources to the EU’s R&D budget

  • R&D investments in agriculture will be the key driving force for bringing about the agricultural jobs of tomorrow.
  • Accordingly, CEMA would support a substantial shift (of up to 15% of the total budget) from the next CAP (2021-2027) to enhance R&D in agriculture.

3.2. Introducing a Productivity Bonus to the CAP as part of the greening scheme

  • CEMA proposes a new and innovative measure to boost TFP in farming in the EU: introducing an agricultural productivity bonus to the CAP.
  • The concept underpinning such a productivity bonus is simple and straightforward: farmers who are able to increase their productivity while strictly following the cross-compliance requirements should be rewarded.
  • The productivity bonus should be calculated based on TFP criteria, which by definition include: soil, water, and inputs management. Coming on top of the basic direct payment the productivity should be part of a renewed and modified greening scheme. 

3.3. Extending Crop Yield Insurance Coverage in the EU under the new CAP

  • CEMA recommends the extension of the existing private yield protection insurance schemes based on actual production history under the new CAP after 2020.
  • Such tools would provide a basic safety net for farmers’ incomes and investments and would be less expensive and less controversial than revenue-based policies.