Greening the CAP. Ex-ante evaluation of the European Commission’s legislative proposals for direct support in a Flemish perspective

Sylvie Danckaert, Joeri Deuninck, Dirk Van Gijseghem & Andy Oeyen

January 2012

Communication 2010/672 by the European Commission (EC) on the new common agricultural policy (CAP) of November 2010 states that the environmental performance of the CAP must be improved and that the agricultural policy must be socialized. The EC has therefore included a greening component to the direct payment in the legislative proposals for direct support. The legislative proposal recommends that 30% of the direct payment should go to “payments for agricultural practises beneficial for the climate and the environment”.

Three greening measures are proposed in the legislative proposal: permanent pasture, crop diversification and ecological focus areas. There are also specific requirements for farmers inNatura-2000 areas and organic producers. In this study we analyze the three proposals made by the European Commission.

The greening measures are obligatory for farmers who wish to receive a basic single payment. In 2014, according to our estimate, 23.779 farmers would be entitled to a basic payment as they had entitlements in 2011 (97%) or because they produce exclusively vegetables (including potatoes) and fruit (3%). Farmers who fulfil the requirements for organic farming are exempted and automatically entitled to greening payment. This is only applicable to the parcels of the farm that are used for organic production. In Flanders there are 143 organic producers who are entitled to a basic single payment in 2014 (source: LPIS). 71 farmers produce organic products exclusively. We estimate that 23.708 farmers will have to satisfy one or more greening measures. Farmers in Natura-2000 must also satisfy the greening measures if these are compatible with the objectives of the Birds and Habitat directive. As this has not yet been evaluated, it has not been included in this study.

Based on the text of the legislative proposal we presume that the greening measure for permanent grassland is in line with the current implementation of the cross compliance rule on maintenance of permanent grassland in Flanders, more specifically an obligation to maintain permanent grassland at the level of the holding. Of course each farm receiving a basic payment must maintain their permanent grassland. For Flanders this means that 16.733 farmers will have to comply with this condition, 84% of which have to follow already the cross compliance rule on maintenance of permanent grassland. The measure, according to the experts, will contribute greatly to the environment and climate objectives, especially where these concern quality of the soil structure, soil erosion, water quality (eutrophication), water management, habitats, carbon sequestration and adaptation. If we are talking about an obligation at operating level, then this greening measure is suitable for Flanders (administration in order, farmers have become used to it, etc.) although a certain level of flexibility must be provided. If the EC however were to introduce an obligation at parcel level, we will be faced with greater implementation problems .

Regarding the measure on crop diversification, the legislative proposal states that each farm greater than 3 ha and which is not entirely used for grass production or entirely left fallow or or entirely cultivated with crops under water for a significant part of the year, must produce a minimum of 3 crops where none of these three crops covers less than 5% and the main crop no more than 70% of the arable land. Estimates for Flanders show that 18.815 farmers need to comply with crop diversification. On the basis of the single application of 2011 we calculate that today, 60% of the farmers do satisfy the crop diversification providing each crop code from the LPIS can be seen as a separate crop. The other farmers do not comply because they either have too few crops (75%) or do not respect the required percentages (25%). From the analysis we see that especially the farms with larger acreages already satisfy the crop diversification requirement. Three quarters of the farms smaller than 5 ha do not meet the crop diversification requirements. Raising the lower limit from 3 to 5 ha can bring partial relief. In addition it appears that as the share of permanent pasture increases, less farmers satisfy. Amongst the cattle farmers with arable land it is the holders of suckler cows (71%) and of dairy cows (66%) who most often satisfy the crop diversification requirement, the farmers who keep slaughter calves least often (39%). As regards the pig farmers we can see that the greater the average occupancy the less often they satisfy crop diversification.

Crops where problems can be expected such as potatoes, flax and vegetables were also studied at depth. 73% of farmers with potatoes as a main crop currently satisfy the requirements for crop diversification, for the flax (fibre) producers the figure is 40% and for the vegetable growers the figure is 75%. In this measure the definition of the concept “crop” will be crucial. The experts’ assessment shows that this measure is least likely to contribute to environmental and climate objectives, although it has been proposed that the contribution will be linked to the definition of the term “crop”.

Regarding the ecological focus area there is a proposed introduction of a 7% ecological focus area (on the acreage of arable land and permanent crops) at farm level. In absolute acreage we estimate that for Flanders this would mean that 32.769 ha of ecological focus area should be introduced for 22.850 farmers. Taking into account the elements mentioned in the regulation, the fertilizer-free areas around watercourses, the nature based agro-environment measures, the non-declared (single parcel registration) small landscape elements besides arable land and permanent crops and the acreage of arable land and permanent crops in Natura 2000 areas (total acreage 49.058 ha) we can reasonably estimate that a quarter of the farmers satisfy the required percentage at farm level. That percentage will however depend on what may be reckoned as being an ecological area. If only those elements are retained that are currently included in the regulation then only 1 % will be eligible. It is of the greatest importance for Flanders that as many as possible of the existing elements can be included. In any case the measure still means that a large number of farmers will have to inactivate production acreage (leave fallow or provide additional (landscape) elements) in order to arrive at sufficient ecological focus area. This results in increased costs for the farmer. For Flanders therefore this measure is less suitable. The expert analysis however shows that the measure makes a big contribution to the environmental and climate objectives, especially where structure quality, soil erosion, water quality (toxic as well as eutrophying emissions), fauna and flora and landscape are concerned.

With all the proposals for greening measures it is unclear as to how far there is compatibility with the agro-environment measures. This will have to be given legal clearance.

If, for ecological focus areas, we depart from a reasonable scenario (see description above) then we can summarize the impact of the greening measures for the farmers and growers in Flanders as follows. We estimate that 23.708 farmers with a current eligible acreage will potentially receive a basic payment in 2014 and will therefore satisfy one or more of the greening measures. Taking into account that each farmer must fulfil only those measures that are relevant to his holding, we have calculated that today only 14% of the farmers meets the greening requirements. This assumption applies only if our interpretation of the proposals is correct.

Original version:
Sylvie Danckaert, Joeri Deuninck, Dirk Van Gijseghem & Andy Oeyen (2012)
Vergroening van directe steun. Ex-ante evaluatie van de wetgevende voorstellen van de Europese Commissie vanuit Vlaamse context
Departement Landbouw en Visserij, afdeling Monitoring en Studie, Brussel.

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