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Billion-dollar agreement: How should EU agricultural reform lead to more organic farming – the economy

Julia Klöckner made history at least at one point: the Minister of Agriculture landed at Berlin’s main BER Airport at 9 am on Wednesday morning. The CDU politician was the first member of the government to put into operation a government terminal at the new airport. Klöckner came from Luxembourg, where she and her 26 counterparts fought for a breakthrough in negotiations on a future European agricultural policy until the early hours of the morning.

If you think so, Minister, the German Presidency of the Council has made history in terms of agricultural subsidies. “No euro” will not be for subsidies that are not related to a higher environmental impact. “No more performance without consideration,” Klöckner said after her return to Berlin.

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The Association for the Protection of the Environment and the opposition sees it differently: they would like significantly higher demands for the protection of animals, climate and nature. “Most agricultural billions from Brussels are still largely inefficiently distributed through watering cans to European fields and meadows,” criticized the Federation for the Environment and Nature Conservation (BUND). According to the SPD parliamentary group, the resolutions also do not reach a resolution, the Greens demand a “public welfare premium” by which farmers are rewarded for social achievements.

Decisions of Ministers

The EU’s new agricultural policy is taking shape after not only the 27 EU Member States have agreed, but a compromise can also be foreseen in the European Parliament: in the future, farmers will do more to protect the climate and the environment in order to obtain EU funding.

These are amounts

EUR 387 billion is available for the years 2021 to 2027. This is slightly more than in the previous funding period from 2014 to 2020. Agriculture is still one of the largest items in the EU budget. However, for German farmers, this is likely to be a little less money, as farmers from the new Member States, who have so far been in worse conditions in terms of direct payments, will receive a growing share.

Germany can expect 44 billion euros from Brussels for the new seven-year period, which is a slight decrease of 0.7 percent. The money is divided into two pillars: direct payments, which are the main source of income for many farmers, and a second pillar, which supports rural development.

Greener agricultural policy

Farmers now need to work greener. Direct payments should only exist if farmers also do something for the environment. This applies to crop rotation to free up soil, hedges that offer shelter to animals, or greater distances from fields to bodies of water.

However, these requirements are not very ambitious. In contrast, another 20 percent of direct payments are to be linked to special environmental services in the future. The European Parliament even calls for 30 percent to be spent on these environmental measures.

These environmental measures are conceivable

These environmental requirements could support organic farming, reforestation, humus formation, peatland protection or digitally controlled precision farming that requires fewer pesticides or fertilizers. However, Member States are free to determine which measures they classify as “ecosystems”. However, in order to prevent ecological dumping, EU countries must have their strategic plans approved in Brussels.

Governments will also receive a two-year “learning phase” during which they can use the funds set aside for environmental programs for other purposes. According to the Federal Ministry of Agriculture, this compromise was necessary to obtain the necessary majority of EU ministers. Opposition was particularly evident in the eastern Member States. Despite the concession, Lithuania eventually voted for it, Latvia, Bulgaria and Romania abstained.

Criticism of the agreement

Greens, who do not support a compromise in the European Parliament, and environmental associations would like much more. They want farmers to receive subsidies in the future only if they manage their fields ecologically.

“Instead of helping hundreds of thousands of farms to transform into a climate- and nature-friendly future, agriculture ministers are using taxpayers’ money tomorrow to consolidate the harmful subsidy system of the day before,” Nabu Federal Director Leif Miller criticized. Green leader Robert Habeck said the resolution “is not enough from behind or in front to achieve the goals that the EU sets itself and to ensure the safety of farmers”.

Environment Minister Svenja Schulze (SPD) calls for the “urgent alignment of agricultural support with environmental, nature protection and animal welfare standards” now to take place at national level. In contrast, the German Farmers’ Association was welcomed by the resolution as a workable compromise. Klöckner did a “very good job”, praising President Joachim Rukwied.

Implications for German farmers

Further mandatory environmental measures by 2027 will pay around a further € 1 billion to German farmers. The German Farmers’ Association even believes that around € 1.8 billion is possible. Small family farms in Germany already receive disproportionately more money than large agricultural companies.

Payments should be even more limited in the future. Degression should be possible from € 60,000 per year, payments above € 100,000 per year should be limited. However, whether this happens depends on the Member States.

What are the next steps?

As with all EU legislation, the European Parliament, the European Commission and the ministers of the Member States must agree. The European Parliament is debating agricultural reform this week and wants to adopt binding resolutions on Friday.

It is expected that it will take until the summer until an agreement is reached in the so-called Trialogues. Implementation then begins in each Member State. For the years 2021 and 2022, the originally valid regulations will remain valid.

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