Eu leaders face major challenges in post-Brexit agriculture sector

There is no easy answer to the question of how the EU agriculture sector will look after 2020.

The issue will largely depend on how EU leaders shape the future of the Common Agricultural Policy (CAP).

Their decisions will need to consider many different elements, which sometimes go beyond the interests of individual Member States.

The social and economic wealth of EU farmers depends on the support they receive from Europe. If the main aim of the CAP is to support farmers, realising that will not be easy.

It will be hard to agree on the most effective measures to support farmers, needing to ensure adequate incomes while providing environmental benefits, consumer satisfaction and respect for international competition rules.

Europe has often been accused of being too protectionist and of distorting the markets because of support to its agricultural sector.

The social and economic wealth of EU farmers depends on the support they receive from Europe

However, EU producers are expected to meet high production standards, which are often blamed for making EU agriculture less competitive on a global level. Aid to farmers has, therefore, always been seen as fundamental to keep the sector alive.

 

Difficult time

How can the EU satisfy both its farmers and international trade partners?

EU farm ministries are confronted with this question in difficult times. Brexit means that the EU budget will have to be revised, and cuts will affect all EU expenditures.

The loss of British budget contributions will mean adjusting the Multi-annual Financial Framework (MFF) and redistributing the available budget.

It is a challenging exercise considering that Europe could lose 18.8 per cent of its revenue in static terms This figure is based on estimates of UK contributions to the overall EU budget. European Commissioner for Budget and Human Resources Gunther Oettinger has warned recently that the EU annual budget, as a consequence of UK departure, will be €9-12 billion worse off.

What, therefore, are the options Member States should be looking at?

At the last CAP approval in 2013-2014, decision makers wanted to push CAP towards more innovative and competitiveness driven solutions, but the results since then have been disappointing and some of measures proposed such as voluntary coupled support are now often considered as counterproductive for EU farmers, creating unfair situations between farmers in the EU and their competitiveness at global level.

 

Better support

In order to ensure better support for EU farms and the wider agriculture sector, other tools have been tentatively introduced but not sufficiently exploited.

Risk management instruments, for instance, have fallen short in their implementation by Member States. Ecological provisions have also been introduced, but more could be done to ensure benefits for the environment, if farmers would be recognised as ecosystem service providers, and receive proper financial reward as a result.

Discussions on the future of the CAP have already taken place at Council level. More is expected in relation to the agreement on the so called “Omnibus” Regulation, in autumn this year, and on MFF in 2018.

It is not an easy task, but EU leaders are under pressure to make EU agriculture more competitive, innovative and sustainable. Time will tell if they will be able to meet this challenge.