ZSA assesses EU agricultural policy reform

The Farmers' Parliament generally evaluates the European Commission's (EC) proposal for the future agricultural policy positively, however, the issue must be viewed from at least two sides. The first thing that Latvian farmers have always emphasized is a fair distribution of direct payments between the European Union (EU) member states. We operate in the same market, the conditions and restrictions are the same for both French and Irish farmers and Latvian farmers, however, the financial support we receive for fulfilling these conditions is significantly different. The European Commission does not solve this problem by offering a scenario where Latvian farmers would receive only 77 % of the EU average direct payments in 2027. We positively evaluate what our Prime Minister achieved at the European Council meetings on the next EU multiannual budget, winning funding that offers Latvian farmers 82 % of the EU average direct payments in 2027. It is not ideal, but better than the EC offer.

On the other hand, we are optimistic about the proposal for a strategic plan regulation. It is pleasing that the EC proposal provides for greater ambition in nature protection, preventing a decline in production. In the context of direct payments, it is proposed to improve the set of basic requirements and offer farmers the introduction of special eco-schemes. The Rural Development Plan provides for broader support for agri-environmental measures, environmentally and climate-friendly investments, small rural entrepreneurs in the LEADER approach, as well as special support for small and young farmers. There are some concerns about whether the new basic requirements will put Baltic farmers in a relatively worse position than Western farmers, because several basic requirements, such as the protection of organic soils and measures to reduce soil erosion, were intended equally for all countries, however, it should be taken into account that the proportion of organic soils in Latvia is high, but the risks of erosion are relatively low, therefore, it would not be objective to apply the same approach to all countries. Currently, it is clear that the Council of Ministers and the European Parliament have paid more attention to this in their positions, and the final compromise could be acceptable to Latvian farmers.

The biggest problem with the future CAP in our view is its simplified and populist interpretation at the national level. Not so much in the Ministry of Agriculture, but in the general political space – we see that politicians do not really want to delve into the issue in its essence, because agriculture and its challenges are complicated, very complex. Therefore, many politicians are looking for the simplest explanations and solutions: organic areas should be increased, and certain areas should be excluded from production, then everything will happen. While increasing organic areas can help solve environmental and biodiversity problems, such an approach is not effective in solving climate problems, including potentially significantly threatening food security, the economic viability of rural areas, and state budget income from agriculture. A restructuring of the cost of supporting organic farming is necessary, because we clearly see that, despite the increase in areas, production volumes are falling, and currently they are extremely low. Even those organic farming sectors that are showing development are primarily the success stories of private companies and individual farmers, not the achievement of state policy. Unfortunately, the pressure to maintain the current model, which does not promote organic production, is great. It should be noted here that the situation at the farmer level and at the policy level is very different, as there are several very successful organic producers who agree that the current model is not conducive to development and that restructuring is necessary - part of the farm should be allowed to be certified, support for new organic areas should be allowed to be paid even in the middle of the planning period, the payment should be linked to the animal unit, not to the hectare of grass, etc.

On the decision-making side, we would like to see more expertise and scientific justification: impact assessments of what each action in the new planning period will mean in the context of climate policy, how it will affect the economy, rural viability. At the moment, unfortunately, we only see that a large number of deputies, populist, guided by their own narrow experience, want to determine how the sector should develop, ignoring the opinion of independent experts, industry participants and scientists. The lack of competence in implementing the future CAP may turn out to be the biggest threat to Latvian farmers.

About Ecoschemes

We currently expect that in the trilogue negotiations on the future CAP Strategic Plan Regulation, an agreement will most likely be reached that eco-scheme measures should provide for a significantly higher amount of direct payments – possibly even 20 %, but we do not see anything wrong with that. Funding should primarily go to those farms that manage responsibly, environmentally and climate-friendly. However, eco-schemes must be logical and accessible to farmers. Great ambition is welcome, but it may become worthless if farmers, upon evaluating the measures, realize that they are too complicated and decide not to apply for them. Therefore, we have always emphasized to the Ministry of Agriculture that eco-scheme measures must meet the set goal, but they must also be fairly easy to implement and attractive to all farmers. For example, in order to reduce GHG emissions in the context of climate policy, the Ministry of Agriculture is currently offering the measure ''direct sowing or strip tillage'', which is undeniably a good measure for reducing GHG emissions from arable land. However, taking into account the high costs of the equipment required for such technology – heavy-duty tractors and the corresponding no-till/row-till seed drills – it will be possible to implement it only on a part of farms that are economically stronger. If the measure also included minimum soil cultivation – disking or cultivation, it would be an excellent alternative. Although minimum cultivation does not bring such a large-scale reduction of GHG emissions to the climate, it could be implemented by almost all farms, including small farmers, at least on part of the arable land. Consequently, the total benefit in reducing GHG emissions at the national level would be greater than if a narrow, strong circle of farms applied for the measure. A similar situation exists in other eco-schemes, where it is planned to create complex conditions for receiving support. We still insist that eco-schemes should be easy to implement – if livestock farmers incorporate manure with technologies that reduce GHG emissions, then they are eligible for eco-scheme support, if a farmer grows legumes that fix atmospheric nitrogen, those areas are also eligible for eco-scheme support. The desire to overcomplicate eco-schemes will lead to farmers simply not applying for them because they will not be ready to make such ambitious commitments, and as a result, all parties involved will lose out.

Author: Valters Zelčs, Foreign Policy Expert of the Latvian Academy of Sciences