Common Agricultural Policy Reform - A Work In Progress

On 12 October the EU Commission released legal proposals for the Common Agricultural Policy (CAP) post-2013. Negotiations will now continue through 2012 and into 2013. The proposals are for the new scheme to commence on 1 January 2014, although if this timetable slips it could conceivably be 2015 before the reforms are in place.

Since the first 'communication' was released by the Commission a year ago there have been some amendments to the plans. It also appears that cuts in the next EU budget for agriculture do not look as bad as once feared; with spending on agriculture falling from just over 40% of the budget to about 36%. Although it must be remembered these are only proposals and may change. The same can be said about the CAP plans and past experience shows us a lot can shift during negotiations. Careful consideration must be given if businesses are thinking about making decisions based on these proposals.

Looking at the reforms, the familiar two pillars will be retained, with direct payments making up pillar 1 and rural development in pillar 2, although 30% of direct payments will be made up of a compulsory 'greening' element. The table shows how the money available for direct payments, the national ceiling (NC), can be split up by member states. The Basic Payment...