European Commission Proposes Higher Outlays on Agriculture

The European Commission has put forward a proposal for a recovery fund to rebuild the agricultural sector following the coronavirus crisis and new data concerning the next 2021-2027 multiannual financial framework.

The financing of the second pillar of the Common Agricultural Policy (CAP) will be increased by EUR 15b compared to 2018 plans. The money is expected to help achieve “ambitious goals” established in the Green Deal in accordance with the Farm to Fork strategy and the biodiversity strategy.

The EC proposes establishing a recovery fund in the amount of EUR 750bn and EUR 1.1bn within the scope of multiannual financial framework.

Increasing the EU’s budget would be financed through “temporarily” lifting own resources ceiling to 2.00% of EU Gross National Income. It would help the Commission to use its “very strong credit rating” to obtain the additional EUR 750bn on financial markets. Additional funds would be ensured within the scope of EU programs. According to the Commission, the funds would be repaid “in the long term” through future EU budgets, “not before 2028 and not after 2058”.

In her address at the European Parliament in Brussels, the Commission President Ursula von der Leyen stated she wished to raise the Commission’s own resources in order to expand trading in emissions in the EU and the European digital tax. She also supported a sufficiently high carbon border tax that could operate as a compensation for the cheap production in third countries that damages the climate.

The European Commission strives to achieve a swift political understanding regarding the Next Generation EU recovery fund and the 2021-2027 general budget at the European Council level by July.

Chairman of the European Parliament Agriculture Committee Norbert Lins appreciated the increase in financing in the second pillar but considered it a good starting point. He stressed that the budget for the EU farm policy must in no way be smaller than the current one. He also stated that higher demands made of farmers with respect to climate and the environment should be proportionately compensated financially. Mr Lins noted the need for a stable participation in the common agricultural policy under the multiannual financial framework and for negotiations. In his opinion, it was also material to include farming in the recovery fund.

See also!

In Western Europe the price of land went up in this period by nearly 6 percent, whereas Romanian agricultural land recorded a 40-percent price increase. Regions with the highest price surges are Eastern Europe and South America. The largest increase was recorded in the 5-year period between 2002 and 2007, when land prices gained 28 percent annually. In the next 5 years the increase waned to nearly 11 per annum.