7 fights to watch in Europe’s farm reforms

The EU’s Common Agricultural Policy is like a giant cash-filled piñata.

The candies it contains are €270 billion of EU farm subsidies, and like kids on a sugar high at a birthday party, negotiators will spend the next few days in closed-door talks in Brussels, each trying to whack it as hard as they can.

The CAP is the biggest single slice of the regular EU budget and everyone wants their cut. Satisfying all those contending demands will be hard, given how much still divides the three teams of negotiators: the European Commission, the European Parliament and the 27 national governments represented by the EU Council.

With the flagship European Green Deal looming, negotiators are under pressure to make the new EU farm policy greener, but also to address longstanding concerns about corruption and the unequal distribution of funds between large and small farmers.

The political context couldn’t be more fraught, with Portugal (negotiating on behalf of all EU governments) rushing to broker a deal so it does not have to suffer the embarrassment of handing over a not-quite-finished reform to Slovenia at the end of June.

The whole CAP has already been delayed by two years and politicians now want to score a deal on the 2023-to-2027 payments so they can tell farmers they’ve secured them some peace of mind. But so many controversial issues are on the agenda that a deal this week is by no means guaranteed.

Here are the key fights that will be the focus of horse-trading, and could even torpedo the talks entirely.

1. Greener farming

Attempts to offer sweeteners to Europe’s badly paid, aging farmers so they adopt greener practices will take center stage.

Legislators are scrapping over how much money to earmark for the new CAP’s flagship green element: the eco-schemes. These voluntary programs encourage farmers to take up more nature-friendly practices. Parliament has pushed for 30 percent of all direct payments to be reserved for eco-schemes, while the Council wants only 20 percent. In terms of hard cash, that’s a difference of around €20 billion over the five years. But now the even harder fight is over the Council’s demand for a less-ambitious initial two-year learning period.

The other major green battle is over what basic land management conditions farmers should meet to get any cash from Brussels, and here it’s a story of exemptions, loopholes and derogations galore for small farmers which infuriate environmentalists but which legislators say are needed to help grow farm businesses. 

Maize monoculture giant France is leading the charge to water down a crop rotation rule, while both the Parliament and the Council want to limit the requirement to leave space for nature on farms to only arable land.

Who will win? Some countries may push for a 25 percent compromise on the eco-schemes but will want flexibilities to count other kinds of green programs toward that goal in return. MEPs could accept a smaller overall eco-schemes budget but only if countries throw them a bone on the learning period. Nature looks unlikely to emerge victorious. 

2. Labor protections for farm workers

Parliament wants the new CAP to dock EU subsidies from wealthy farm bosses who exploit workers and breach the bloc’s employment protections. Its push for “social conditionality” attempts to improve the working conditions of an estimated 4 million people doing dangerous underpaid work in Europe’s agriculture sector, from seasonal migrant workers in southern EU countries to German abattoir staff exposed to coronavirus hotspots. 

But the sides are acres apart. The Council says for now it’s better to boost legal advice to farmers and reassess in 2026. Parliament rejects that and is sticking to its guns on a fully-blown sanction system. If the CAP already includes environmental conditions, then why not social ones, MEPs ask. Powerful farm lobbies and 13 governments, including Austria, Greece and Belgium are dead set against the Parliament’s demand, saying it will burden farmers with red tape and is unreasonable for the CAP to eat into countries’ social policy.

Who will win? The Parliament’s second largest group, the Socialists and Democrats, has set stronger labor protections as its price for backing any overall deal, and some of its MEPs already rebelled to vote against the CAP last year. Governments will have to give Parliament something, though it’s unlikely to be what trade unions want.

3. Fairer payments

Some €270 billion will be doled out from Brussels over the course of the five-year CAP. A huge fight will center on whether most of those payments will keep going to those who need them least, such as huge landowners, fake farmers, or corrupt politicians, or could instead be diverted to small and medium sized farms.   

But how to do that? Facing opposition from the Council, the Parliament and Commission have pretty much given up hope of imposing a mandatory €100,000 per year maximum ceiling on payments to big farms, and are instead focusing their efforts on beefing up a requirement to redistribute a certain proportion of money to smaller farmers. MEPs want this to be 12 percent of farm funds received per country, but the Council’s offer is 7.5 percent. Even if this doesn’t come out of the paychecks of big farms, it could still make the CAP a bit fairer. But Parliament thinks countries just want a blank check. All this is rumbling in the context of broader imbalances anyway: a Latvian farm gets less EU money per hectare than a German one, for instance.

Who will win? France recently set out its stall, saying it intends to keep redistributing 10 percent of direct subsidies. But although that seems an obvious compromise, Paris is one of the few countries that already does this. With so many competing interests, let alone the complexity of the math, a deal here will be like a fiendishly tricky sudoku puzzle for Portugal to solve.

4. Fair-trade play

The question of how far to shift the EU’s trade rules to protect EU farmers from lopsided import competition remains one of the thorniest debates.

MEPs are eager to protect farmers from a flood of cheaper imports produced under laxer rules at a time when they are being asked to shift into more sustainable modes of production. Think about parts of the world with child labor, deforestation and unregulated chemicals. Some governments, however, are wary about putting restrictions on such imports through fear of breaking World Trade Organization (WTO) rules.

Council has notched up a partial victory here already, offering to issue a joint political declaration instead of so-called trade safeguard amendments from MEPs. Still, some parliamentarians are still refusing to drop a push to keep agricultural and agri-food imports grown using EU-banned pesticides from entering the bloc, and are calling for any non-compliant imports to be banned by 2025 at the latest.

Who will win? Some EU countries are lukewarm about making any far-reaching commitments on trade and are instead asking the Commission for one of its signature impact assessments. But MEPs may have a backup wildcard, as Brussels has signaled support for a revamp of WTO agri-food rules to secure its Green Deal goals. Alternatively, lawmakers could be OK with waiting for Paris — a staunch proponent of this trade revamp push — to take over the reins of the EU Council next year.

5. Brussels’ powers 

Another big fight is over how strongly the Commission should be able to vet national CAP plans from the member countries, if they plan to splash money on projects or even eco-schemes that don’t align with the EU’s hallowed Green Deal.

Officials from the European Commission’s agriculture department avoid using the word “reject” in relation to the plans for fear of enraging national capitals, but Parliament is pushing for two mid-term reviews that would ensure the next generation of national plans can incorporate the oncoming tide of climate and environment legislation from Brussels. People following the file say Green Deal Chief Frans Timmermans is clashing with Agriculture Commissioner Janusz Wojciechowski on this, and pushing for Brussels to sharpen its teeth. 

Who will win? Countries refuse to be tied down by Green Deal plans that aren’t even law yet. And given that handing more agricultural autonomy to the member countries was the raison d’être of Brussels’ original proposal, the prospects don’t look super bright for Parliament’s desires. 

6. Rooting out corruption

In whose pockets do all these farm subsidies actually end up? Often no one really knows, and that’s why the Parliament is pushing to make it a legal requirement for all recipients to disclose which legal entity their farm belongs to. MEPs have leaders like Hungary’s Viktor Orbán and the Czech Republic’s Andrej Babiš in their crosshairs here. But the Council doesn’t want to be bound to using the high-tech data tool that MEPs think can do the job — and the Commission says it’s not ready yet.

In a separate fight, some lawmakers also want to shed more light on who ends up benefiting from Brussels’ regulatory maneuvers by identifying the buyers of public intervention food stocks or, at the very least, their destination market. 

Who will win? Council could agree to use the ARACHNE data-mining tool but only if it remains voluntary, while an internal division among MEPs about the need for more regulatory transparency could play in the Council’s favor.

7. Sugar shields

Council negotiators succeeded in scratching poultry, sheep, and pigmeat from a protectionist wishlist from MEPs, but lawmakers are refusing to back down on sugar, saying the sector is reeling from the end of production quotas in 2017 and needs to be shielded from what they see as a looming shake-up in pursuit of a greener and more sustainable market.

To do so, they want to see sugar tacked on to the list of goods including cereals, beef and some dairy products that are protected by public intervention schemes, through which Brussels buys out and stores goods hit by market crises or disturbances to resell later.

In a sign of how things are playing out so far on the ground, sugar farmers are firmly backing MEPs’ calls for more protection while the sugar processing industry is pushing back against any change of the current status quo.

Who will win? EU countries and the Commission are both keen on keeping Brussels’ safety net from being stretched too wide. The publication of a Commission report on how the end of the sugar quota has impacted the sector, expected in the fall, could well favor this wait-and-see approach.

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