Are Common Agricultural Policy Subsidies Paying for Environmental Quality? Reality Check Are Common Agricultural Policy Subsidies Paying for Environmental Quality?

Home , Cash crop

Reality Check Are Common Agricultural Policy subsidies paying for environmental quality? Reality check Are Common Agricultural Policy subsidies paying for environmental quality?

Prepared by

Report compilation Luigi Boccaccio The Royal Society for the Protection of Birds – RSPB (BirdLife in the UK) Ariel Brunner BirdLife International European Division Jenna Hegarty The Royal Society for the Protection of Birds – RSPB (BirdLife in the UK) Gareth Morgan The Royal Society for the Protection of Birds – RSPB (BirdLife in the UK) Trees Robijns BirdLife International European Division

Spanish study Juan Bécares Sociedad Española de Ornitología – SEO/BirdLife (BirdLife in Spain) Ana Carricondo Sociedad Española de Ornitología – SEO/BirdLife (BirdLife in Spain) Celsa Peiteado WWF Spain The Spanish study was carried out jointly with WWF Spain.

German study Jenja Kronenbitter Institut für Agrarökologie und Biodiversität - IFAB Tobias Lepp Institut für Agrarökologie und Biodiversität - IFAB Dr. Rainer Oppermann Institut für Agrarökologie und Biodiversität – IFAB Naturschutzbund Deutschland - NABU (BirdLife in Germany)

Czech study Vaclav Zamecnik Czech Society for Ornithology – CSO (BirdLife in the Czech Republic) The Czech report was made with the help of Mr. Libor Braveny from the Agency for Nature Conservation and Landscape Protection of the Czech Republic. Mr. Braveny gave special assistance to generate the GIS maps.

Edited by Alessia Pautasso BirdLife International European Division Concept and design by: www.studiostraid.be

July 2010 Reality Check

Glossary 4 Executive summary 5 1. Introduction 6 1.1 The Common Agricultural Policy, an overview 8 1.2 Objectives, approach and limitations 9

2. Spanish case study 10 2.1 Introduction 11 2.2 Methodology 12 2.3 Main findings 13 2.3.1 General distribution of payments 13 2.3.2 Broad environmental implications 15 A. Natural resources - Water 16 B. Biodiversity - Natura 2000 17 C. High Nature Value farming systems 17 2.4 Conclusions 19

3. German case study 20 3.1. Introduction 21 3.2. Methodology 21 3.2.1 Nature benefits and agricultural payments at farm level 22 A. Farms 22 B. Analysis 23 3.2.2 Nature benefits and agricultural payments at area level 24 3.3. Main findings 24 3.3.1 Results: Nature benefits and agricultural payments at farm level 24 3.3.2 Results: Nature benefits and agricultural payments at area level 27 3.4. Conclusions 33

2 Reality Check

4. Czech case study 34 4.1 Context 35 4.2 Methodology 35 4.2.1 Comparison of CAP support received by selected pairs of farms from the same region 35 4.2.2 Examples of environmentally damaging practices in relation to public financial support 36 4.3 Main findings 36 4.3.1 Comparison of CAP support received by selected pairs of farms from the same region 36 A. ‘Good practice for nature’ and ‘bad practice for nature’ farm analysis 36 B. Inside and outside SPA farm analysis 38 4.3.2 Examples of bad agricultural practice 39 A. Soil erosion 39 B. Destruction of watercourses and wetlands 40 C. Unsuitable field boundaries 42 4.4 Conclusions 43

5. Discussion 44 6. Policy recommendations 48 7. References 50 7.1 References to introduction, discussion and policy recommendations 51 7.2 References to Spanish Case study 51 7.3 References to German Case study 51 7.4 References to Czech Case study 52 · Reality Check

BirdLife International

3 Glossary

AES Agri-Environment Scheme CAP Common Agricultural Policy CC Cross Compliance CMO Common Market Organisation DP Direct Payments EAFRD European Agricultural Fund for Rural Development EAGF European Agricultural Guarantee Fund EC European Commission EEA European Environment Agency FEGA Fondo Español de Garantía Agraria F&V Fruits and Vegetables GAEC Good Agricultural and Environmental Condition GIS Geographical Information System HNV High Nature Value INE Instituto Nacional de Estadística LFA Less Favoured Areas LPIS Land Parcel Identification System MARM Ministerio de Medio Ambiente y Medio Rural y Marino NVZ Nitrate Vulnerable Zones N2K Natura 2000 OP Other Payments RDP Rural Development Programme SAC Special Areas of Conservation SAPS Single Area Payment Scheme SMR Statutory Management Requirements SPA Special Protection Areas SPS Single Payment Scheme SZIF Státní zemědělský intervenční fond TA Total Area UAA Utilised Agricultural Area WFD Water Framework Directive

4 Executive summary

ince new transparency rules entered into force in April 2009, Member States are required to dis- close the beneficiaries of Common Agricultural Policy (CAP) payments.This finally allows an objective Sexamination of the distribution of EU farm subsidies and of the value to society of such payments. This study attempts to give an insight into the potential relationships between CAP spending patterns and issues relevant to biodiversity protection and natural resources conservation. The report presents, via different research methodes, the results that can be obtained by crossing CAP subsidy data with environmental information. The analysis includes three case studies, carried out in the Czech Republic, Germany and Spain, and incorporates the main findings of similar activities undertaken in Latvia and the UK.

The study highlights how CAP spending intensity does not reflect any nature conservation priorities and does not specifically support nature-friendly farms. In particular, in the old Member States, Pillar 1 direct payments generally tend to be lower for farms inside Natura 2000 sites and in areas with a high occurrence of High Nature Value farming systems, as well as for organic farms. This is only partially compensated by rural development payments, which in general tend to have a more even distribution. Although there is no guarantee that funds spent in biodiversity-rich areas or biodiversity-friendly farming systems are actually targeted to nature conservation, the fact that spending intensity in these areas is not higher than elsewhere indicates that the CAP is not giving priority to farmland biodiversity.

Examples collected at farm level suggest that significant funds are directed at farms engaged in unsustainable practices, indicating that cross compliance is widely failing to avoid environmental damage and that, despite several rounds of reforms, ‘the polluter pays principle’ is still not reflected in the CAP. In Spain, high expenditure on intensive and irrigated farming systems is spatially associated with severe environmental problems such as water depletion and pollution, thus suggesting a causal relationship between certain CAP instruments and environmental degradation.

BirdLife International calls on EU institutions and Member States to act on these findings and on findings of previous BirdLife studies, and to seize the opportunity to steer the ongoing debate on the post-2013 CAP towards ambitious reform. Environmentally perverse subsidies should be abolished, the Natura 2000 network should be adequately supported and land managers who engage in nature-friendly farming should be properly rewarded. · Reality Check

BirdLife International

5 Introduction

6 iodiversity in Europe has been declining for decades and a major cause of this decline is agricultural change. Agriculture is the largest land use in Europe, accounting for almost half Bof the total EU-27 land area. Its impacts are therefore far-reaching. Rapid changes to farming systems in the post-war decades allowed an unprecedented increase in agricultural productivity, but had severe impacts on biodiversity1.

The European Union and its Member States are contracting parties to the UN Convention on Bio- logical Diversity. In 2001, the EU Heads of State made the commitment to halt the decline of biodiversity in the EU by 2010 and to restore habitats and natural systems. In 2002, they also joined some 130 world leaders in agreeing to significantly reduce the rate of global biodiversity loss by 2010. In May 2006, the European Commission adopted a communication on “Halting Biodiversity Loss by 2010 – and Beyond: Sustaining ecosystem services for human well-being”, which underlined the importance of biodiversity protection as a pre-requisite for sustainable development, as well as setting out a detailed EU Biodiversity Action Plan to achieve this. Natura 2000 is the centrepiece of the EU nature and biodiversity policy. It is an EU-wide network of nature protection areas established under the 1992 Habitats Directive. Natura 2000 is composed of Speacial Areas of conservation, designated under the Habitats Directive, and Special Protec- ted Areas, designated by the oldest EU nature legislation, the 1979 Birds Directive. The aim of the network is to assure the long-term survival of Europe’s most valuable and threatened species and habitats.

Introduction The EU Biodiversity Action Plan addresses the challenge of integrating biodiversity concerns into other policy areas in a unified way, and identifying funding commensurate to this ambitious task. The CAP is meant to provide major financing opportunities for biodiversity conservation in the EU2. Despite these commitments, the EU has failed to meet its biodiversity protection objective3, with agricultural habitats and species showing particularly poor conservation status4, and CAP instruments not being targeted for this purpose5. This year, EU Heads of State have renewed their commitment to reversing biodiversity loss and have adopted a very ambitious target6 that cannot be met without a profound transformation of our agricultural landscapes.

Although, agricultural expansion into natural habitats and intensive agricultural systems can have severe negative impacts on biodiversity, properly managed agricultural habitats in Europe can be of critical importance to biodiversity conservation. The European Environment Agency estimates that 50% of all species in Europe depend on agricultural habitats, including a number of endemic and threatened species. This is both because of the territorial dominance of agricultural land use and because of the way in which historic, low intensity land management has resulted in rich species assemblages.

The net impact of agriculture on biodiversity and the wider environment is therefore strictly de- pendent on the type of farming systems and practices deployed. For example, mixed farming systems tend to be more beneficial to biodiversity than specialised arable farms, and haymaking generally performs better than silage. Another risk to farmland biodiversity is associated with the abandonment of extensive farming systems. Targeting support to the right farming systems and practices is crucial if CAP funding is to benefit biodiversity.

1. Stoate C, Báldi A, Beja P, Boatman ND, Herzon I, van Doorn A, de Snoo GR, Rakosy L & Ramwell C (2009) Ecological impacts of early 21st century agricultural change in Europe – A review. Journal of Environmental Management 91: 22-46. 2. European Commission (2004) Communication from the Commission to the Council and the European Parliament on financing Natura 2000. COM(2004) 431 final. 3. European Commission (2009) Report from the Commission to the Council and the European Parliament. Composite report on the conservation

status of habitat types and species as required under Article 17 of the Habitats Directive. COM(2009) 358 final. Spanish Ministry of Environment, · Reality Check Rural and Marine Affairs (2010) “Cibeles” piorities – halting the loss of biodiversity in Europe. 4. European Environment Agency (2009b) Progress towards the European 2010 biodiversity target. 5. BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity? BirdLife International (2009b) Could do better. How is EU rural development policy delivering for biodiversity? 6. Council of the European Union (15 March 2010) Council conclusions on biodiversity post-2010 – EU and global vision and targets and international access and burden sharing regime. BirdLife International

7 1.1 The Common Agricultural Policy, an overview

The CAP represents roughly 37% of the EU budget, corresponding to €51.5 billion in 2009. In order to understand the magnitude of this EU budget stream, it should be noted that only €0.32 billion was spent in 2009 on the EU financial instrument for the environment (LIFE+), which is the only EU budget line specifically dedicated to environmental protection. Of the CAP budget, €37.8 billion was spent on direct payments. This represents the largest part of the CAP’s Pillar 1, entirely financed by the European Agricultural Guarantee Fund (EAGF). These payments are given to land managers without any clear objective and with no provision for monitoring impacts.

In the ‘new’ EU-12 Member States, direct payments are implemented through the Single Area Pay- ment Scheme (SAPS), which takes the form of a flat-rate payment per hectare (i.e. the payment level depends only on how much land a farmer has and each unit of land receives the same amount), corresponding to an amount decided by Member States. In 2009, the total expenditure for the SAPS was €3.8 billion.

In the ‘old’ EU-15 Member States, direct payments are implemented through the Single Payment Scheme (SPS) and each beneficiary is entitled to a payment that is linked to the average amount received during a 3-year reference period (2000-2002). This rigid “historic model”, used by most of the ‘old’ Member States, means that beneficiaries who received high payments in the past are entitled to a high Single Farm Payment, while farmers who received low payments are given a low entitlement. This means that the SPS de facto replicates past production subsidies spending patterns. Some countries are using a ‘hybrid model’ (Denmark, Finland, Northern Ireland and Sweden) or a ‘transitional hybrid model’ (England and Germany) for the SPS, which means, respectively, that entitlements are either partly based on a regional flat rate, or are progressively moving towards a regional flat rate. In 2009, the total spending for the SPS was €27.2 billion. In most cases, SPS entitlements can be traded and detached from the land to which they were originally allocated. In 2009, approximately €6.7 billion was used for other direct payments, including coupled payments for arable crops, suckler cows, sheep and goats, tobacco and other specific sectors. Besides direct payments, Pillar 1 of the CAP includes market interventions (including export subsidies and intervention purchasing), on which the EU spent €3.4 billion in 2009.

Although the amount spent on these payments is much lower than SPS/SAPS, it is enormous if compared to other EU budget spending lines. For example, in 2009 the EU spent €305 million on tobacco and over €1.32 billion on alcohol and wine7, while spending only €317 million on LIFE+, the only EU financing instrument exclusively dedicated to environmental protection. EU spending on alcohol and wine is almost three times higher than spending on “Title 07 - Environment” of the EU budget (€494 million)8.

Unlike Pillar 1, Pillar 2 is partly co-financed by Member States and is based on the European Agri- cultural Fund for Rural Development (EAFRD), which finances EU rural development policy. This includes a set of axes and measures that correspond to three broad objectives: competitiveness and job creation (axis 1), environment and countryside (axis 2) and quality of life in rural areas (axis 3). Rural development policy is implemented via national or regional Rural Development Pro- grammes (RDPs) that are approved by the European Commission and managed by national and regional authorities. Although many RDPs include measures that can harm biodiversity or that are not properly designed to support less productive but environmentally valuable agro-systems, and although several axis 2 measures are poorly implemented and hence unlikely to benefit the environment, rural development policy is based on solid principles (e.g. well-defined objectives,

7. For some of these schemes, agreements have been reached to phase out or heavily reduce them. 8. http://eur-lex.europa.eu/budget/data/D2009_VOL4/EN/index.html

8 contractual base, monitoring and evaluation, Commission approval, consultation of stakeholders) that create considerable potential to support biodiversity9.

Another element of the CAP is cross compliance, a set of rules that should be respected by reci- pients of direct payments and certain rural development (axis 2) payments. Cross compliance pro- visions include some aspects of EU legislation (Statutory Management Requirements relating to environmental protection, plant and animal health, animal welfare and food safety). It also includes some basic good practice standards which aim to keep land in ‘Good Agricultural and Environ- mental Condition’. Despite the breadth of environmental issues covered by cross compliance, its effectiveness is extremely low due to a number of inherent problems, such as the vagueness with which most requirements are defined, the ineffective control and penalty system and the lack of any monitoring and evaluation of the results10.

1.2 Objectives, approach and limitations

Council Regulation 1290/2005 requires Member States, via their agriculture Ministries, to publish details of CAP payment beneficiaries. This provision entered into force in 2009, making an incredi- bly large source of data available for analyses related to CAP spending patterns.

By 30 April each year, Member States have to publish information for the preceding financial year, including: • the full or legal name of the beneficiary; • the municipality where the beneficiary resides or where the company is registered, including the postcode of the municipality; • the amount of direct payments received; • the amount of other Pillar 1 payments (market interventions); • the amount of rural development payments, including both EU and national financing; • the total amount of CAP payments distributed.

BirdLife International and its national partner organisations are committed to ensuring that the CAP delivers its full potential for biodiversity. The amount of information released as a result of EU transparency rules, has created a valuable opportunity to scrutinise the progress in using CAP funding to benefit biodiversity, as well as in implementing other areas of EU environmental policy, such as climate change, water, etc.

The report explores potential relationships between CAP spending patterns and issues relevant to biodiversity protection. This should not be considered an exhaustive study on the topic, but rather a demonstration of the types of analysis that can be performed and the results that can be obtained by using CAP payment data.

The study builds on three national reports produced by BirdLife Partner organisations in the Czech Republic, Germany and Spain (here jointly produced with WWF Spain), and incorporates the main findings of similar activities run by BirdLife Partners in Latvia and the UK. The full studies are available online11. Each national case study used its own methodology, depending on the quality of CAP payment data released by national authorities, on the issues relevant to biodiversity protection at a national level and on the specific expertise of each BirdLife Partner. Details about the methodo- logies used are provided in each case study chapter. · Reality Check

9. BirdLife International (2009b) Could do better. How is EU rural development policy delivering for biodiversity? 10. BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity? 11. http://www.birdlife.org/eu/EU_policy/Agriculture/eu_agriculture_transparency.html BirdLife International

9 Spanish Case Study

10 2.1 Introduction

This study, carried out by SEO/BirdLife and WWF Spain, analysed the possible relationships between CAP payments (both Pillar 1 and 2) and environmental protection in Spain. The analysis, based on the full dataset of subsidy beneficiaries disclosed by the Spanish government, focused on two fundamental questions: • Are CAP subsidies supporting Spain’s most environmentally valuable farming systems (High Nature Value farming) and do they co-fund the management of the Natura 2000 network? • How are CAP payments correlated to the conservation and management of natural resources (the title of the budget heading under which the CAP is classified), in particular of water, according to the Water Framework Directive (WFD), EC Directive 2000/60?

This work is part of a broader project that includes two more local case studies, assessing more detailed data that is not available at the national level. These local case studies are not presented in this report, but will be available online starting June 201012.

The study indicates that the method of calculating the payments (based on higher yields for a reference period or the loss of income) continues to benefit more intensive crops, with consequent impacts on the environment. Spanish Table 1 gives an overview of the pillar 1 payments in Spain in 2008. Spain, with more than 25 mil- lions of hectares of Utilised Agricultural Area (UAA) -nearly 15% of the UAA in the EU27, received approximately €5.6 billion from Pillar 1. Direct Payments (SPS: 56% and Non-decoupled aids: 24%) accounted for nearly 80%, while other payments (namely, Wine and Fruit & Vegetables CMO) re- Case Study ceived the remaining 20% of Pillar 1 funding. After the ‘Health Check’ revision of the CAP, the EAFRD (Pillar 2) budget for Spain amounts to €8.05 billion for the period 2007 - 2013.

The total public budget for rural development policy in the period 2007-2013, including national co-financing, corresponds to approximately €15 billion, with an estimated annual average spend of almost €2 billion13.

Table 1. EAGF distribution by payment scheme in Spain14 PILLAR 1 - EAGF 2008 DIRECT PAYMENTS 80% SPS 56% Non-decoupled aids 24% Coupled payments 15.4% Additional payments (art.69) 6.5% Specific payments 2.1% OTHER PAYMENTS 20% Wine CMO 6.8% F&V CMO 5.0% Sector aids Outermost regions 4.4% Export restitutions 0.4% Others 2.3% Promotion actions 0.2% Most Needed Persons 0.9% Reality Check

TOTAL 100%

12. www.seo.org and www.wwf.es 13. FEGA-MARM, 2009 14. FEGA-MARM, 2009 BirdLife International ·

11 The RDPs of Spanish autonomous communities have allocated an average of 55% of the total public budget to Axis 1, 32% to Axis 2 and 13% to Axes 3 and 4. Table 2 gives a more comprehensive overview of the total CAP payments spent in Spain in 2008. It must be noted that due to delays in programming and approval, much of the budget allocated to rural development, and particularly to its environmental component, remains unspent. That means that the figures above give a very optimistic overestimate of funding that is actually available for environmentally targeted support.

Table 2. Overview of CAP payments in Spain in 200815 Direct payments 70% Other pillar I payments 13% Rural development 17% Total spending € 6.87 billion Spending per hectare € 294

2.2 Methodology

In the study 2008 payment data released by the national paying agency (FEGA) were used. These data were classified into three categories of payments: Direct payments and other payments (both from EAGF) and payments from EAFRD (as a total figure)16. Spatially explicit environmental data for GIS analysis were limited and difficult to access17. The following data sources were used: • Utilised Agricultural Area (to calculate per hectare payments): National Statistical Institute (INE), data for 1999 (the most recent agricultural census); • Surface area corresponding to each agricultural land use (irrigated, dry, pasture, herbaceous/ arable, permanent crops): Land use map (1995-2006; from official sources: CORINE, forest map, etc.); • Over-exploited groundwater bodies and Nitrate Vulnerable Zones: Ministry of Environment, 2007 and 2009 respectively; • Natura 2000 network: Ministry of Environment, 2009.

The study is based on overlaying different elements of environmental information with maps of CAP payment data18, in order to investigate the relationship between CAP spending intensity (showing payment rates by hectare of UAA, according to the different categories of payments) and environmental problems or biodiversity value.

• Natura 2000 network: Natura 2000 sites account for more than 14 million hectares in Spain (Map 1), out of which, nearly 6 million have an agricultural use (rising to 10 million if the over 4 million hectares of temporarily grazed pastures are included). These figures equate to around 28% of total national surface and 25% of total UAA, respectively. Presented differently, almost 75% of Natura 2000 area in Spain is used to some degree for agricultural purposes, highlighting the relevance of the CAP for these sites.

Map 1. Natura 2000 network in Spain19

15. http://ec.europa.eu/budget/library/publications/fin_reports/fin_report_08_data.xls 16. The lack of detailed payment information per measure, has limited the quality and scope of this study. 17. The lack of up to date environmental information or information available in formats suitable for GIS analysis, especially regarding the location of High Nature Value farming systems, forest conservation status and landscape values, has limited the scope of the study. 18. Because of technical constraints, the Canary Islands are not covered. 19. MARM, 2009 (information of 2009, latest version), consulted on December 2009: http://www.mma.es/ portal/secciones/biodiversidad/rednatura2000/rednatura_espana/index.htm.

12 • Over-exploited underground waters: Ac- cording to Spanish government sources, a high proportion of underground water bodies in Spain are overexploited, in some cases to ex- treme levels (Map 2). This is leading to the loss of many aquatic habitats and could have far reaching negative impacts on both ecosystems and human society, including the long-term viability of farming. It should also be noted that the state of many water bodies is still un- known.

Map 2. Over-exploited underground water bodies20

• Nitrate Vulnerable Zones (NVZ): Mainly due to chemical fertiliser use in agriculture and intensive livestock farm wastes, fresh waters in large areas of Spain are at risk of pollution by nitrates (in turn becoming unsuitable for human consumption). As can be seen in Map 3, nearly 12% of total national surface is classified as NVZ, an area that has increased in recent years.

Map 3. Nitrate Vulnerable Zones21

2.3 Main findings

2.3.1 General distribution of payments

If all types of payments are combined, the subse- quent map (Map 4) shows a slight concentration of aid within the main river basins, Mediterranean coast, Galicia, and the northwest regions.

Map 4. Distribution of total payments22

This map also shows that the highest payments are located within cities, mostly the provincial capitals. This reflects the residence of the beneficiary rather than the farm location. In turn, there is a significant amount of municipalities, distributed over the entire national territory, that receive less than 100 €/ha (this is relevant as the Health Check introduced the principle that the smallest beneficiaries are excluded from direct payments). Payments are also clearly concentrated along some of the major river valleys and coastal plains where irrigated arable farming and specialised crops such as vineyards, olives, rice, cotton, fruits and vegetables are prevalent. Similarly, the higher payments of the northwestern regions could be explained by the dairy and beef sector in Galicia. Reality Check

20. MARM, 2009 (information of 2007, latest version), consulted on December 2009: http://servicios3.mma.es/siagua/visualizacion/descargas/ mapas.jsp 21. MARM, 2009 (information of 2009, latest version), consulted on December 2009: http://servicios3.mma.es/siagua/visualizacion/descargas/ mapas.jsp 22. SEO/BirdLife BirdLife International ·

13 Specific maps by type of payment highlight bigger differences between areas and some relevant analysis can be made.

In the case of Direct Payments (Map 5), which accounted for more than 65% of total CAP funds for Spain in 2008, there is a clear relationship between these payments and the areas with highly intensive crops mainly under irrigation, in particular the Guadalquivir River Valley (i.e. olive, cereals, cotton and rice production) but also in the Ebro River Valley (cereals, fruits, etc.). This reflects the fact that Direct Payments are calculated following an historical model, which benefits more intensive crop production.

The relevance of the dairy and beef sector in the northwest, tobacco in Extremadura (central-west) and nuts in Catalonia is captured in this map as well. Direct Payments include specific aid for these sectors and they are often managed under highly intensive systems.

Map 5. Direct payments from EAGF23

Map 6. Other payments from EAGF24

Other Payments (Map 6) mainly consists of aids under the two last Common Market Organisation schemes still running in 2008: Wine and Fruits & Vegetables (F&V), which jointly account for more than 60% of these payments. Even if the total amount of export refunds (included in Other Payments) is much lower than CMOs, they can still be very significant at local level, in particular in sectors for which exports are a great part of their business (like F&V or pig meat).

Therefore, regions where these sectors have undergone significant expansion, for instance Castilla-La Mancha (for wine), and Murcia and Valencia (for F&V), now have the highest payment rates. Other areas, again the valleys of Guadalquivir, Ebro and low Guadiana rivers, as well as the south-eastern corner of Andalucia, mainly occupied with irrigated crops, come out with significantly higher levels of aid.

For payments made under EAFRD programmes (Map 7), the results reflect the type of measures implemented during the first years of the programming period. Therefore, the prevalence of early retirement subsidies in regions like Galicia and Asturias can explain the higher payment rates. Ano- ther example is Castilla-La Mancha and Aragon where grants for the improvement of irrigation infrastructures may explain the higher payments.

In general, rural development spending intensity is much more evenly spread than Pillar 1 spending, with mountain versus lowland differences being much less apparent. A very inclusive (and questionable) classification of Less Favoured Areas (with nearly 80% of land under one of the three

23. SEO/BirdLife 24. SEO/BirdLife

14 categories) and the relatively high budget allocated to LFA measures may also account for this spending pattern.

Map 7. Payments from EAFRD25

It is worth noting that large cities and capitals still receive the highest payments, which to some extent seems incompatible with the “rural development” and “territorial” approach of CAP Pillar 2. Most of the measures currently deployed are related to farming or the agro industry (axes 1 and 2), while funding of initiatives aimed at rural communities (axis 3 and LEADER) had been barely implemented by 2008 (in any case, total funding for axes 3 and 4 accounts for just 10% of total RDP budget). While national authorities tried to include the place of residence as an eligibility criterion for some rural development measures (e.g. LFA payments), the European Commission rejected this under the argument of freedom of residence within the territory of the EU.

Although not the objective of this study, it is interesting to show how just a few cities (59 out of 8,046) receive payments above 10,000€/ha (all payments counted together), while the average payment for the rest of municipalities is slightly higher than €300 per hectare and the mean is below that (table 3). The average rate of total payments for these 59 cities is nearly 150,000 €/ha and whilst these figures are not real (i.e. the payments do not relate to the city but to land owned and managed elsewhere by city residents) they give a good indication of the concentration of payments.

Table 3. Average payment rates (€/ha) according to several criteria26 N EAFRD Other Direct Total Payments- Payments- Payments EAGF EAGF Municipalities UAA>50%TA 4,436 60.33 45.02 203.30 308.65 Municipalities < 10,000€/ha 7.987 55.09 45.84 215.89 316.81 Municipalities > 10,000€/ha 59 11.827,31 10.487,26 127.238,93 149.553,50 Total Municipalities - average mean (1) 8.046 141.41 122.40 1.147.33 1.411,14 Total Municipalities - total mean (2) 8.046 36.46 40.50 183.48 260.44

TA: Total Area of Municipality I UAA: Utilized Agricultural Area I N: num. of municipalities included in the category (1) Payment rates calculated as average of all municipalities’ rates (2) Payment rates calculated as mean of total absolute amounts for every type of payment divided by total UAA

2.3.2 Broad environmental implications

Unfortunately, the lack of more detailed information on specific measures and payments prevents thorough analysis of the links between the environment and CAP funding at national level. Howe- ver, despite this limitation, and others gaps arising from the lack of spatially explicit data suitable for GIS analysis, some striking evidence has been found.

Table 4 presents different payment rates ordered by type of payment, according to farmland location or farming system. The figures can be compared with each other and with the national average payment (Graph 1) (calculated with data from municipalities where UAA accounts for 50% or more of its total surface and where payment rates remain below 10,000 €/ha to avoid distortion effects). Reality Check

25. SEO/BirdLife 26. SEO/BirdLife on the basis of FEGA 2008 BirdLife International ·

15 Table 4. Average payment rates (€/ha) by type of system or location27 Type of system / area EAFRD Other Direct Total Payments- Payments- Payments EAGF EAGF Inside Natura 2000 Network (>50% TA) 51.63 27.22 140.78 219.63 Inside Natura 2000 Network (>90% TA) 47.06 8.34 124.80 180.21 Outside Natura 2000 Network (>50% TA) 57.93 45.57 202.72 306.22 Outside Natura 2000 Network (>90% TA) 57.45 44.59 196.16 298.21 Rain-fed crops 39.45 29.58 211.47 280.51 Irrigated crops 87.13 209.31 321.50 617.94 Pastures 57.90 6.68 159.27 223.85 “Dehesas”* 22.10 3.64 103.89 129.63 Permanent crops 54.53 170.62 191.80 417.32 Herbaceous crops 49.50 36.68 277.57 363.75 Over-exploited underground water bodies 26.80 96.69 174.87 302.26 Nitrate Vulnerable Zones (NVZ) 52.70 92.21 232.58 377.49 Irrigated crops in NVZ 74.03 206.56 297.28 577.86 Total Municipalities (UAA>50%TA) – N 4436 60.33 45.02 203.30 308.65

TA: Total Area of Municipality I UAA: Utilized Agricultural Area I N: num. of municipalities included in the category

* A Dehesa is a complex concept which usually entails several uses, mainly extensive livestock rearing and forestry exploitation (for cork, charcoal and wood), with possible low degrees of cropping (for forage), and even hunting purposes. However, for the purpose of this study only Dehesas which have their surface designated as Utilized Agri- cultural Area (UAA) have been included in the analysis and so exclusively hunting systems (only a minor part) are not considered.

A. Natural resources - Water • Irrigated crops. For all types of payments, irrigated systems receive the highest levels of support (Graph 1), with the biggest difference in comparison to non-irrigated crops for ‘Other Payments’. Irrigation systems usually entail higher costs, (through water pricing for example) and this is supposed to be the rationale for higher support. However, they also are more productive, thus more profitable, and produce a wide set of negative environmental impacts (in addition to high levels of water consumption). The highest EAFRD payments received by irrigated crops reflect the importance placed on measures related to modernisation of irrigation systems and the calculation system for agri-environment payments (based on additional cost and income forgone). • Over-exploited aquifers. Total payments related to these areas are not above average, however, there seems to be a strong link between “Other Payments” (the only type for which the payment rate is higher) and incidences of over-abstraction (Map 8). As highlighted above, this type of payment is mainly related to intensive fruit and vegetable production (most of which is produced in greenhouses). This can be linked to overexploited water bodies located in south- western and south-eastern Andalucia, and areas in the eastern regions (Murcia and Valencia). Wine production in Castilla-La Mancha also seems to play a role. • Nitrate Vulnerable Zones (NVZ). General payment levels in these areas are quite similar to those for over-exploited underground water bodies, although they are slightly higher for the categories of “Direct Payments” and EAFRD aids (Graph 1). The clearest link, as shown in Map 9, appears again in the case of “Other Payments” diverted to the NVZ located in central Spain (Mancha Oriental and Mancha Occidental NVZ in Castilla La Mancha) and in the West (Gua- diana plain areas in Extremadura), Southwest (Guadalquivir plain), the Southeast (Campo de Dalías and Campo de Níjar) areas in Andalucia; Levante area (Campo de Cartagena and Segura plain in Murcia and Valencia) and several areas along the Ebro River. • Irrigated land on NVZ and over-exploited underground water bodies. Analysis shows, (see maps 10 and 11) how irrigated areas located within a NVZ or farmland using water from over- exploited water bodies, broadly reside within regions receiving the highest support under “Other Payments” from EAGF. This analysis also shows how current CAP payments are suppor-

27. SEO/BirdLife on the basis of FEGA 2008

16 ting the expansion and maintenance of environmentally harmful farming systems at the expense of wetlands and other aquatic ecosystems. For example, some of the most representative RAMSAR sites, currently under significant pressure due to water pollution and abstraction for irrigation, are located in areas with high rates of EAGF Other payments (i.e. Doñana National Park, Tablas de Daimiel National Park, Alcazar de San Juan wetland, or L’Albufera in Valencia).

B. Biodiversity - Natura 2000 To obtain data which are strongly related to Natura 2000, only municipalities with 50% or more of their total surface area included in Natura 2000 sites have been considered. The results identify that farming systems inside Natura 2000 receive lower payments (Graph 1 and 2), with the highest difference for EAGF payments, while EAFRD expenditure is relatively more even (probably due to agri-environment and LFA payments).

C. High Nature Value farming systems High Nature Value farming systems are broadly identified with non-irrigated extensively managed crops, “dehesas” and other extensive pastures. These systems also receive consistently lower amounts, especially when compared to irrigated land, with the biggest differential for EAGF-Other payments (Graph 1).

In particular, the “dehesas”, one of the most valuable Spanish systems providing important environmental public goods, represent the lowest levels of support for all type of payments, even for rural development expenditure, despite the fact that some RDPs include measures targeted at these systems. The different definition of the “dehesas” between regions, as forest or farming areas, is likely to contribute to this situation.

Graph 1. Payment rates by system or area and type of payment28 Reality Check

28. Generated by SEO/BirdLife BirdLife International ·

17 Graph 2. Payment rates inside/outside Natura 2000 Network by type of payment29

Map 8. Overlaying of Other Payments - EAGF and over- exploited or salinized underground water areas30

The red lines indicate the perimeter of overexploited or salinized underground water areas.

Map 9. Overlaying of Other Payments - EAGF and Nitrate Vulnerable Zo- nes31

The orange lines indicate the perimeter of Nitrate Vulnerable Zones.

29. Generated by SEO/BirdLife - At least 50% of total area of the municipality is inside Natura 2000 (but payment related to hectares of UAA) 30. SEO/BirdLife 31. SEO/BirdLife

18 Map 10. Overlaying of Other Payments - EAGF and irrigated crops in Nitrate Vulnerable Zones32

The yellow lines indicate the perimeter of main irrigated areas on NVZ.

Map 11. Overlaying of Other Payments - EAGF and irrigation with water from over-exploited underground bodies33

The black lines indicate the broad perimeter of areas irrigated mainly from over-exploited underground waters.

2.4 Conclusions

1. The level of available information is still poor and access to it complex. Transparency levels still need to be improved in order to allow pro- per analysis of the CAP and its impact.

2. There is a need for further research, distinguishing by type of payment, both for EAGF (decoupled and specific aids, specified by sector) and EAFRD (by measure).

3. In addition, other factors like endangered species distribution, erosion and desertification risk, salinised waters, natural flooding areas, irrigated area or likely relationships with conservation status of forest areas, should be analysed. The environmental consequences of abandonment should also be assessed.

4. The current CAP distributes most funds as income support to a very small number of large or resource intensive farms and often to those engaging in unsustainable practices.

5. In turn, there seems to be a consistently lower level of support for the most environmentally valuable farming systems, such as extensive grazing systems or extensive arable crops and farmland within Natura 2000 sites. The loss of these systems, either via intensification or via abandonment, is a primary cause of the decline of biodiversity associated with open habitats. Hence, the CAP is failing in its contribution to Europe’s biodiversity objectives, where it should play a key role.

6. Furthermore, there seems to be a close correlation between CAP payments (mainly from Pillar 1) and over-exploitation of underground waters. This shows the failure of the CAP to contribute to the objectives of the WFD.

7. A redistribution of payments to areas of environmental value and the focusing of axis 2 measures to address environmental problems (water over-abstraction, soil erosion etc) are clearly needed. At the same time, payments that contribute to the intensification of production in sensitive areas should be stopped. Reality Check

8. The current CAP is clearly not rewarding the delivery of public goods in Spain. If biodiversity and resource protection are objectives of this policy, those land managers that take care of the environment must be properly rewarded.

32. SEO/BirdLife 33. SEO/BirdLife BirdLife International ·

19 German Case Study

20 3.1. Introduction

This study attempts to use the newly published data on CAP beneficiaries in Germany to explore whether, and to what extent, these payments are justified. Specifically, it asks to what extent farmers provide nature benefits and what relation there is between such benefits and the level of CAP payments received. The study combines two approaches: • The first compares CAP payments among a small but representative set of real farms, whose levels of environmental performance are well understood. • The second is a photo-documentary of agricultural land in various German regions, attemp- ting to “put a face” to the subsidies paid out of the CAP budget.

Germany is one of the largest producers of agricultural products in the European Union. Almost 19 million hectares, more than half of the German territory, is used as farmland34. As can be seen in table 1, German farmers and land managers received €6.58 billion in CAP payments in 2008. More than three quarters went to direct payments while less than 15% went to Rural Development. After the 2003 reform, Germany opted for a so-called dynamic hybrid model. This means that payments are based partially on historical reference data (2000–2002) and partially on the basis of a uniform per acreage payment for a specific region. The ‘historical’ part of the payments is gradually phased out in favour of the ‘regional’ part of the payments. It will evolve to a purely regional model by 201335. Therefore the current strong reflection of past production subsidies will fade over time, alt- German hough the disparity in payment level will remain between regions reflecting their production level. The implementation of the RDPs in Germany is done at Länder (regional) level. The consequence is a large difference between various regions, notably in the attention given to agri-environment Case Study schemes. If the data of all the regions is aggregated, the RDPs allocate spending between the different axes in the following way: Axis 1 < 30%, Axis 2 > 40%, Axis 3 > 20%, Axis 4 < 10%. Total amount spent on AE measures is less than 30%36. These average figures hide huge disparities and several Länder (Hamburg, Mecklenburg-Western Pomerania, Lower Saxony-Bremen, Sachsen-An- halt, Schleswig-Holstein) allocate to axis 2 less than the (national) legal requirement of 25%.

Table 1: Overview of CAP payments in Germany in 200837 Direct payments 84% Other pillar I payments 3% Rural development 13% Total spending € 6.55 million Spending per hectare € 388

3.2. Methodology

This case study is divided into two parts. Both substudies analyse the nature benefits provided by farms that received CAP payments. The first focuses on benefits at the farm level, the second on benefits at the area level38. Reality Check 34. Bundesanstalt für Landwirtschaft und Ernährung (BLE) (2010) Farming in Germany - Facts and Figures http://www.bmelv.de/cln_182/sid_ DCE87804F823EA2477B22D48E631B982/SharedDocs/Standardartikel/ EN/Agriculture/FarminginGermany.html#doc381588bodyText1 35. Tiessen J, van Stolk C (2007) The Introduction of Single Farm Payments in Finland and Germany. RAND Europe 36. Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Insti- tute for European Environment Policy. 37. http://ec.europa.eu/budget/library/publications/fin_reports/fin_report_08_data.xls 38. The pictures in this report are credited to IFAB (2009). The two aerial pictures are credited to Google Earth BirdLife International ·

21 3.2.1 Nature benefits and agricultural payments at farm level

The objective of this study was to compare farm-level biodiversity and benefits in landscape structure with CAP payments. Natural inventory data for farms was compared with actual CAP payments.

A. Farms Data from 27 farms in five federal states were used (Map 1).

Map 1: Location of the farms in Germany

The data used in this study is derived from the project ‘Naturin- dikatoren für die landwirtschaftliche Praxis’ (Nature indicators for agricultural practice) in which the evironmental benefits of several farms were examined in 2002/2003. The objective of this study was to create and test indicators enabling a stronger integration of biodiversity and landscape structural benefits in agricultural practices39.

The data for CAP payments are from 2008, therefore only data from farms that have not undergone restructuring, expansion etc. between 2002 and 2008 have been used. However, it should be noted that operational changes cannot be ruled out. A new natural inventory on farms in 2008 was not carried out.

The farms include a mix of small and large farms, conventional and organically managed farms, cash crop, forage growing and mixed farms (See Table 2).

Table 2: Summary of the analysed farms and their characteristics No. farm size arable grass livestock cultivation type soil direct direct 2nd pillar type (ha) land land units/ha capability payments payments payments (%) (%) (Lu/ha) class (€) (€/ha) (€) 1 mixed 248 83 17 0,3 organic 70 93.700 380 54.700 2 mixed 21 30 70 0,5 organic ? 2.700 130 4.000 3 forage 77 17 83 0,5 organic 40 14.400 190 6.900 4 cash crop 60 99 1 0 conventional 50 17.200 290 0 5 cash crop 433 100 0 0 conventional 62 150.600 350 0 6 mixed 114 46 54 0,7 organic 45 30.800 270 29.600 7 cash crop 310 100 0 0 conventional 70 99.400 320 3.000 8 cash crop 98 97 3 0 organic 59 22.300 230 15.800 9 forage 70 40 60 1,4 organic 50 22.00 310 12.100 10 forage 98 0 100 1,7 conventional 60 31.300 320 0 11 mixed 471 75 25 0,6 organic 49 160.000 340 0 12 cash crop 66 99 1 0,5 conventional 32 17.100 260 0 13 cash crop 315 100 0 0 conventional 28 98.700 310 0 14 mixed 188 66 34 0,7 organic ? 37.800 200 20.500 15 mixed 1.267 87 10 0,5 organic 33 277.700 220 144.100 16 forage 310 53 47 0,5 conventional 33 93.400 300 6.300 17 mixed 114 87 13 2,7 organic 24 27.200 240 14.500 18 forage 532 0 100 0,9 organic 32 125.100 240 0 19 mixed 1.232 96 4 0,4 organic 33 349.900 280 227.400

39. Oppermann R, Braband D & Haack S (2005) Landwirtschaft. - Berichte über Landwirtschaft Band 83, 76-102.

22 20 forage 32 0 100 1,3 organic 22 6.100 190 9.800 21 mixed 116 44 56 1,6 conventional 72 40.500 350 6.900 22 mixed 38 42 58 0,8 conventional 45 8.000 210 2.500 23 mixed 68 34 62 0,7 conventional 63 18.000 260 15.100 24 mixed 57 100 0 0,1 organic 60 16.000 280 11.800 25 mixed 26 58 42 0,5 organic 35 4.600 180 5.300 26 grafting 150 98 2 0,9 conventional 60 43.900 290 1.000 27 cash crop 217 100 0 0 conventional 38 66.300 310 43.000

Information relating to area is rounded to the nearest ha and percentage point, information relating to overall payments is rounded to the nearest €100 and for payments per ha to the nearest 10 €/ha.

B. Analysis The following three nature indicators were identified as a proportion of the total area of each farm (examples see Picture 1): • species rich farmland • extensively managed farmland • landscape features

Picture 1: (from left to right): species rich farmland, extensively managed farmland, hedges as landscape features

Farmland, which is rich in species like the arable land on the left in picture 1 or the extensively managed flower rich hay meadow in the middle of picture 1, forms the basis of a lively and diverse cultural landscape. Farmers who cultivate these areas, and thus conserve biodiversity, provide real and valuable nature benefits. The conservation of hedges, on the right in picture 1, as well as the cultivation of traditional orchards also brings benefits for nature.

Species rich areas provide an essential contribution to biodiversity preservation in agricultural landscapes. The biodiversity of agricultural landscapes depends on the agricultural management of individual farms. It can be positively influenced e.g. by a reduction of herbicides, reduced use of fertilizers, reduced stand densities and an extensive use of grasslands. In order to detect the biodiversity of farmland, a transect method and a list of indicator species for species rich grassland and arable land were used within the framework of the nature indicator project. Following this practice, a method for the valuation of farmland was developed40.

The intensity of use is a critical factor for the biological quality of living space in agriculturally used Reality Check areas. Therefore, extensively managed farmland such as extensive grassland, traditional orchards and field margins; do have a strong impact. Due to their natural biodiversity, they become valuable

40. Oppermann R, Braband D & Haack S (2005) Landwirtschaft. - Berichte über Landwirtschaft Band 83, 76-102. BirdLife International ·

23 refuges within an intensively managed agricultural landscape. However, it often takes several years until a visible increase in biodiversity can be noted on newly created extensively managed farmland. In addition, extensively managed land helps preserve soils and groundwater.

A further indicator is the extent to which landscape features, such as groves, hedges, boundary ridges, scrubland etc. are present. Landscape features are cultural assets worth preserving and providing important functions such as breeding and over-wintering habitats. The extent of landscape features in a certain region depends both on the natural classification of the area (for instance geology, soil type, climate) and the type of agricultural practices deployed.

3.2.2 Nature benefits and agricultural payments at area level

With this second exercise, photographs were taken in several regions of Germany to provide examples of typical land management and its influence on the natural environment. Examples were selected from a variety of farming systems and from regions with varying soil quality.

The photographs were taken in August 2009 in the following regions: • Mecklenburg (Mecklenburg Lake District) • Sachsen-Anhalt (Northern Harz region) • Baden-Württemberg (Kraichgau)

Actual payment levels of the documented farms have been extracted from the officially released data.

3.3. Main findings

3.3.1 Results: Nature benefits and agricultural payments at farm level

Table 3 shows a compilation of nature benefits provided and direct payments received by each farm. The extent of species rich farmland was selected as the main indicator for each farm’s nature- friendliness.

Table 3: Summary of the analysed farms and their nature characteristics No. farm type species rich extensively used lanscape direct payments farmland (%) farmland (%) features (%) (€/ha) 1 mixed 0 24 3 380 2 mixed 5 1 5 130 3 forage 24 56 8 190 4 cash crop 0 50 7 290 5 cash crop 0 70 10 350 6 mixed 14 18 19 270 7 cash crop 0 0 16 320 8 cash crop 1 36 2 230 9 forage 0 0 2 310 10 forage 0 1 5 320 11 mixed 11 0 2 340 12 cash crop 10 15 6 260 13 cash crop 0 10 4 310 14 mixed 18 45 8 200

24 friendly’ and farms nature‘less friendly’ wasnotpossible. ofthistype farms cies rich farmland, therefore a comparison of the amount of direct payments distributed to ‘nature spe of proportion high a had farms crop cash studied the of None average 2b). and 2a above (Graph payments significantly get benefits nature low providing farms whereas ha per payments For forage growing and mixed farms, the ‘nature friendly’ farms again receive below average direct trends. limited reveal only can analysis separate therefore,a farms), 13 mixed: farms, 7 crops: cash farms, 6 growing: forage farm, 1 (grafting: small very are types farm different the for sets data The UAA) of (% farmland rich species of percentage the to relation in ha) / (€ payments Direct 1: Graph S=5526, p<0.000,φ=-0.69). N=27, (Spearman-rank-correlation: significant statistically is farmland rich species of area the and ding low nature benefits (Graph 1). The negative correlation the between level of direct payments provi- farms than less significantly receive benefits nature best the providing farms becomes that evident it payments direct with farmland rich species of percentage the cross-referencing By average (n=27)- 27 26 25 24 23 22 21 20 19 18 17 16 15 cash crop grafting forage forage forage mixed mixed mixed mixed mixed mixed mixed mixed 17 14 43 51 21 78 1 1 1 0 0 6 9 - 46 57 64 43 70 57 97 36 47 22 4 2 3 - 11 13 18 10 5 8 8 6 4 8 5 6 5 - 280 310 290 180 280 260 210 350 190 280 240 240 300 220 -

25 BirdLife International · Reality Check Graph 2: Direct payments (€ / ha) in relation to the percentage of species rich farmland (% of UAA) a) Forage farms b) Mixed farms

Graph 2 shows how for forage growing farms (a) and mixed farms (b), those providing high nature benefits generally receive below average payments (the average of €280 per ha is indicated by the dotted line) and significantly lower direct payments than farms providing few or no nature benefits.

Extensively managed farmland can also be an important indicator for a farm’s nature friendliness. In contrast to the species rich farmland indicator, no negative correlation could be found between the proportion of extensively managed farmland and direct payments per ha (Graph 3). However, payments to farms with a very low proportion of extensively managed farmland are higher than the average of €280 per ha in almost all cases while direct payments to ‘nature friendly’ farms are lower than the average in more than half of the cases.

Graph 3: Direct payments (€ / ha) in relation to the percentage of extensively managed farmland (% of UAA)

In addition to species rich farmland and extensively managed farmland, a possible indicator for the nature friendliness of a farm is the extent of landscape features. However, no significant correlation between the proportion of landscape features and direct payments could be found.

26 friendly farms. friendly nature than system payment the more profit by farms friendly nature less that identify resultsThe Graph payments 4:Direct to organically andconventionally managedfarms onal=12, W =42,p0.02). Nconventi- Norganic=15, test: rank (Wilcoxon significant statistically is payment of amount the in difference 4). The (Graph farms a managed conventionally to showed payment average higher significantly farms managed conventionally and organically to payments direct of comparison A ching, whichrunoffinto the reed bedand water ofthenature reserve. lea- nitrate and erosion soil are consequences The reserve. nature a of bed reed the borders directly which slope, a on field maize a shows Mecklenburg from photograph This 2. Picture The photos below provide examplesofinappropriate landmanagementinareas ofGermany. ding any natureeven benefitsand whencausingenvironmental harm, for example: provi- without payments high get farmers cases many in that shows photographs the of Analysis Nature3.3.2 Results: benefitsandagricultural payments at area level • • • isolation ofremainingplace naturalhabitatstakes buffer zones andtransitionareas oflandscapesandfarms are missinginthemajority remaining naturalhabitatsare directlyandnegatively affected by landmanagement extended to thereed bed cultivationHillside ofmaize

27 BirdLife International · Reality Check Picture 3. This photograph, taken in Mecklenburg, shows a field which directly borders a wetland habitat (kettle/sedge fen). With the loss of the field margin, nitrates and pesticides can enter the wetland habitat easily. In the background, there are several other wetland habitats, which could be easily linked and the ecological value of the landscape increased.

Missing field margin/ ‘isolation’ of habitats

Picture 4. This picture from Mecklenburg shows a field which directly borders a hedge. Field margins by hedges are of particularly high ecological value as an important habitat, cover and breeding site for several plants and animals in intensively managed agricultural landscapes. The value could be much higher and a change of the ecological value could be achieved by leaving a field margin of 5-10m.

Missing field margin

28 Picture 5. This photograph has been taken in the Kraichgau. It shows a species rich wet meadow at the edge of a nature reserve, which has been ploughed for growing maize. In the middle of the maize field runs a perennial water ditch. The borders of the maize field are directly on the top edge of the ditch, whereby nitrate and pesticide loads get into the water, which ends up in the nature reserve. A sufficiently sized margin along the ditch is highly necessary.

Wet meadow replaced by maize field Reality Check

BirdLife International ·

29 Picture 6. This photograph has been taken in the northern Harz region. It shows large scale arable farming, without any trees or other landscape elements. Such areas host very little biodiversity and fail to provide even basic ecosystem services.

Large scale farming without trees or shrubs

Picture 7. This is a satellite photo of the previous picture. The farmer gets about 15000 € of direct payments annually for this large scale farming without any margins, erosion protection strips or landscape elements.

Area of arable land 50 ha: Direct payments about 15.000€ / year; Environmental benefits = 0

30 Picture 8. This photograph shows a cherry tree avenue near the Northern Harz, which is worth preserving. The trees suffer visibly from road traffic and agricultural cultivation, which occurs immediately next to the tree trunks. With an adequate border between the avenue and the cropland, or extensively managed meadows along the cherry tree avenue and flower strips across the field, the situation for the trees and wider biodiversity could be significantly improved, however these are not standard practices.

Cultivation to the base of trunks of a cherry tree avenue

Picture 9. This is the satellite picture of the previous photo. The farmer gets annually about 13.000€ of direct payments for this arable land. Adequate field margins or extensive meadows along the cherry tree alley and across the plot for connecting the biotopes are not in practice up to now. But in fact for such high payments those arrangements could be expected.

Cherry trees Reality Check Area of arable land 43 ha: Direct payments about 13.000€ / year; Environmental benefits = 0 BirdLife International ·

31 Picture 10. This photograph from Mecklenburg shows cultivation directly next to the top edge of a mulched drain water ditch. The consequences are water pollution due to nitrate and pesticide leaching. The habitat was also destroyed through vegetation mulching.

Land cultivation to the border of a mulched drainage ditch

Picture 11. On this section of arable land, covering 30 ha, the farmer provides few nature benefits but receives about € 8000 in annual direct payments.

Previously set-aside land, now under arable cultivation

Ditch and wetland withoutany field margin

Area of arable land 30 ha: payments: about 8.000€ / year; Environmental benefits almost 0

32 3.4. Conclusions

The following conclusions can be drawn from the farm sample analysis and from the photo examples:

1. The current system of CAP payments directs more support to: - farms providing few nature benefits instead of farms providing high nature benefits - conventional farms instead of organic farms

2. It is often in a farmer’s financial interests to farm more intensively to produce higher quantities of marketable commodities.

3. Farms providing high nature benefits are disadvantaged by both the current market failure to reward such benefits and the system of CAP payments which rewards high levels of production in a historic reference period. When land management is extensified in order to produce additional environmental benefits, revenue losses often occur. Therefore, remuneration is urgently needed.

4. A significant amount of utilised agricultural land receives high payments without providing nature benefits and even while causing environmental harm.

5. To support farmers, the taxpayer pays firstly to support intensive land management (through Pillar I direct payments) and secondly - but only a relatively small amount - for additional payments to farmers to provide nature benefits (through Pillar II agri-environment schemes). The outcome is conflicting land management. Reality Check

BirdLife International ·

33 Czech Case Study

34 4.1 Context

In 2008, direct payments (primarily the Single Area Payment Scheme) represented 58% of CAP expenditure in the Czech Republic. SAPS payments are gradually increasing by approximately 10% each year. EU12 Member States can increase direct payments by using national financing (‘top ups’), to a maximum of +30% but not beyond the SAPS limit for a specific country. Along with SAPS, other payments in Pillar I include: payments for sugar beets, energy crops and tomatoes, in place since 2006, 2007 and 2008 respectively. In 2008, Pillar II (European Agricultural Fund for Rural Deve- lopment) represented 38% of the EU-funded CAP budget spent in the Czech Republic. Almost 30% of the total Pillar II budget is currently being spent on agri-environment payments.

Table 1. Overview of payments in the Czech Republic in 200841 Direct payments 59% Other pillar I payments 3% Rural development 38% Total spending € 648 million Spending per hectare € 153

4.2 Methodology

The relationship between CAP payments and environmental benefits in Czech Republic was analysed using national payment agency data42. The data on financial support to land parcels selected as examples of good and bad practice farms, refer to 2009.

Unfortunately, environmental data at farm level are extremely limited, especially for nature conservation. The following sources were used: • Natura 2000 network, Ministry of Environment, 2006; • Ministry of Agriculture (farmer portal), 2009-2010; • Local caretaker groups responsible for Special Protection Areas and Important Bird Areas; • State authorities responsible for the management of Special Protection Areas.

Two approaches were used: A. the total amount of public funding was compared across pairs of selected farms, chosen to represent good and bad practice from a biodiversity and broader environmental point of view; B. photographic documentation of bad practice was gathered from various regions of the country, and cross-referenced with information on public payments where available43.

4.2.1 Comparison of CAP support received by selected pairs of farms from the same region

The first part of the study focuses on the comparison of CAP support received by selected pairs of farms from the same region. The farms were compared partially on the basis of their nature conservation designation status. As in the rest of the EU, the Czech Republic has several Natura 2000 sites which consist of Special Protection Areas (SPA) under the Birds Directive and Special Areas of Conservation (SAC) under the Habitats Directive. This study focuses primarily on Special Protection

Areas, although SPAs and SACs often overlap. Reality Check

41. http://ec.europa.eu/budget/library/publications/fin_reports/fin_report_08_data.xls 42. SZIF, www.szif.cz 43. The pictures of this report are credited to CSO Archive. Aerial pictures to be credited to Libor Braveny BirdLife International ·

35 In this part of the study, local caretaker groups and state authorities responsible for the management of SPAs were asked to choose ‘good practice’ and ‘bad practice’ farms in terms of nature conservation. Five pairs of farms were located in SPAs and one pair was selected outside the protected area network. The amount of public payments received by these farms was compared (table 2). There are a number of indicators which highlight the difference in approach to environmental management between ‘good’ and ‘bad practice’ farms. These include the farmer’s approach to the protection of landscape elements including wetland features, scattered vegetation and the wil- lingness to adjust farming methods and practices to the needs of endangered fauna and flora.

In addition, two farms from each region were randomly selected, under the condition that one of the farms was managing land in an SPA and the other farm was located near this SPA but outside the protected area. In total, five pairs of farms were analysed and the amount of public payments received was compared (table 3).

4.2.2 Examples of environmentally damaging practices in relation to public financial support

The second part of the study presents some examples of environmentally damaging farming practices, along with figures of CAP subsidies associated with these land parcels. Photos were taken by members of the Czech Society for Ornithology, primarily in 2009 but with a number of archive images from 2006. Farms are not identifiable from the pictures as the purpose of the report is not to blame individual farmers, but to highlight how CAP funding is directed to farms that engage in unsustainable practices.

4.3 Main findings

4.3.1 Comparison of CAP support received by selected pairs of farms from the same region

A. ‘Good practice for nature’ and ‘bad practice for nature’ farm analysis Table 2 and graph 1 give the details of CAP support received by farms applying good practice (highlighted in light purple) and bad practice (highlighted in dark purple). This comparison suggests that: • ‘good practice’ farms tend to receive slightly higher payments (in €/ha) than ‘bad practice’ farms. Because SAPS payment per hectare is the same for all farms, Pillar 2 payments seem to make a real and positive difference for ‘good practice’ farms; • ‘good practice’ farms tend to receive lower total amounts (in €/beneficiary) than ‘bad practice’ farms. This can be explained by the size difference between the two farm types; • ‘good practice’ farms usually have smaller land parcels compared to ‘bad practice’ farms operating in the same region. This can result in a higher diversity of management operations in space and in time (e.g. more varied crops, different mowing dates); • organic farms also tend to be ‘good practice’ farms, although one example of ‘bad practice’ was found in an organic farm; • farms with grassland receive higher levels of support from Pillar II as a result of high uptake of agri-environment payments.

36 Graph 1. Payments (€/ha) to good practice versus bad practice farms

1400 good practice bad practice 1200

1000

800

600

400

200

0 Pilar 1 Pilar 1 Pilar 1

Table 2. Comparison of the CAP support received by farms with good practice ( ) and bad practice ( ) 44 Farm characteristics Pair Region Farm Average Arable Grassland Permanent Management No. size field size land (%) crops type (ha) (ha) (%) (%) type SPA Podyji 1.625,2 13,0 94,9 4,8 0,3 conventional 1 SPA Podyji 1.452,2 17,3 91,3 0,0 8,7 conventional SPA Krkonose 549,7 10,0 0,0 100,0 0,0 conventional 2 SPA Krkonose 942,1 7,4 0,0 100,0 0,0 conventional SPA Jeseniky 149,8 7,5 0,0 100,0 0,0 organic 3 SPA Jeseniky 607,4 10,3 12,7 87,3 0,0 conventional SPA Labske Piskovce 467,4 8,2 0,0 100,0 0,0 organic 4 SPA Labske Piskovce 1.080,2 9,0 4,5 95,5 0,0 organic SPA Krivoklatsko 140,9 4,3 53,6 46,4 0,0 conventional 5 SPA Krivoklatsko 487,1 6,7 84,6 15,4 0,0 conventional Vysocina region 89,5 3,3 36,6 62,2 1,2 organic 6 Vysocina region 3.531 9,1 77,8 22,2 0,0 conventional Public payments PILLAR I PILLAR II Pair Region National EU EU Total National EU Total Total Total No. funds funds funds (€/ha) funds funds (€/ha) (€) (€/ha) (€) (€) (€/ha) (€) (€) SPA Podyji 400.095 512.783 316 562 36.066 144.266 111 1.093.210 673 1 SPA Podyji 277.019 589.138 406 596 50.733 232.382 195 1.149.272 791 SPA Krkonose 119.499 173.588 316 533 101.831 407.325 926 802.243 1.459 2 SPA Krkonose 150.818 287.837 306 466 162.044 648.177 860 1.248.876 1.326 SPA Jeseniky 39.052 46.220 309 569 33.952 135.809 1.133 255.033 1.702 3 SPA Jeseniky 85.188 201.004 331 471 105.716 422.862 870 814.770 1.341 SPA Labske Piskovce 79.383 151.385 324 494 86.135 344.538 921 661.441 1.415 4 SPA Labske Piskovce 152.209 322.494 299 439 197.908 785.045 910 1.457.656 1.349 SPA Krivoklatsko 30.413 45.790 325 541 13.694 54.775 486 144.672 1.027 5 SPA Krivoklatsko 76.415 153.845 316 473 13.271 53.083 136 296.614 609

Vysocina region 21.451 28.263 316 555 14.594 58.377 815 122.685 1.370 Reality Check 6 Vysocina region 986.088 1.124.587 318 598 175.303 684.482 243 2.970.460 841

44. Exchange rate was 26,563 Czech crowns/Euro (1/1/2010). All economic characteristics are cumulative figures for the period 2007-2009, data presented on www.szif.cz. BirdLife International ·

37 B. Inside and outside SPA farm analysis Table 3 and graph 2 compare CAP support received by farms with at least part of their farm inside an SPA (highlighted in light purple) versus farms outside Natura 2000 or any other protected areas (highlighted in dark purple). This comparison suggests that: • there is no major difference in CAP spending intensity between the two sets of farms; • farms inside SPAs usually have smaller land parcels compared to farms outside protected areas operating in the same region.

Graph 2. Payments (€/ha) to farms with at least part of the farm in Special Protection Areas (Natura 2000) versus farms outside protected areas

800 Natura 2000 outside Natura 2000 700

600

500

400

300

200

100

0 Pilar 1 Pilar 1 Pilar 1

Table 3. Comparison of CAP support received by farms operating inside SPAs ( ) and control farms operating near, but outside, each SPA ( )45 Farm characteristics Pair Region Farm Average Arable Grassland Permanent No. size field size land (%) crops (ha) (ha) (%) (%) SPA Komarov 164,1 9,1 40,7 59,3 0,0 1 control farm 1.526,8 17,8 89,4 10,5 0,1 SPA Poodri 2.339,9 11,3 83,4 16,6 0,0 2 control farm 1.416,8 15,9 89,0 11,0 0,0 SPA Hovoransko - 2.276,0 12,0 86,6 0,0 13,4 3 Cejkovice control farm 2.819,6 25,6 98,4 0,0 1,6 SPA Litovelske 2.105,8 10,1 93,0 7,0 0,0 4 Pomoravi control farm 2.222,1 6,6 47,8 51,8 0,4 SPA Rozdalovicke 723,4 13,4 95,2 4,8 0,0 5 rybniky control farm 3.226,5 26,7 100,0 0,0 0,0

45. Exchange rate was 26,563 Czech crowns/Euro (1/1/2010). All economic characteristics are cumulative figures for the period 2007-2009, data presented on www.szif.cz.

38 PictureMoravia 1.An 81.2hamaizeSouthern fieldin environmental threats. important most the of one remains erosion soil situation, unsustainable this address to vements chemical inputs, such as fertilizers and pesticides. Although there have recently been small impro of levels increased and regimes management in pressure changes significant through increased resources water on features), landscape important many of loss the by (accompanied size field increased and consolidation included changes management and farms. structural Typical private small over took farms collective or cooperatives like holdings large when 1970´s, the until 1950´s agriculturefromthe of collectivization the during place took structure farmland of changes Major in theSPA Podyji. to biodiversity. The largest cropping unit recorded in this survey, with a size of 239.6 ha, was found opportunities few very give and erosion heavy to soil the expose units cropping large-scale and Republic has among the largest field sizes in Europe) and unsustainable farming practices. Uniform again with almost half under a higher risk category. The main reason for this is field size (the Czech almost half of which is under a higher risk category risk higher a under is which of water,half by almost caused erosion soil of risk at is Republic Czech the in land agricultural of 75% Around erosionA. Soil 4.3.2 Examplesofbadagricultural practice ČR2009 zemědělství Ministerstvo 46. Pair No. 1 5 4 3 2 SPA Hovoransko - SPA Rozdalovicke SPA Litovelske SPA Komarov control farm control farm control farm control farm control farm SPA Poodri Cejkovice Pomoravi Region rybniky National 793.190 138.387 490.805 539.491 368.275 558.310 329.114 593.203 487.100 19.878 funds (€) 1.184.843 1.024.937 231.630 705.039 584.109 717.558 478.017 766.724 605.570 51.573 PILLAR I funds EU (€) Public payments (€/ha) funds 367 320 317 487 207 315 337 328 397 314 EU (€/ha) Total 613 511 538 743 338 561 570 581 716 435 46 . About 19% is threatened by wind erosion, wind by threatened is 19% About . National 161.898 24.121 19.677 29.947 66.100 12.005 30.486 14.913 funds 6.960 2.681 (€) PILLAR II 647.289 164.068 731.757 121.945 305.502 96.483 27.842 78.706 47.720 10.762 funds EU (€) (€/ha) Total 364 351 210 37 48 47 69 42 82 65 2.098.637 2.005.030 1.662.811 1.146.398 2.073.725 1.512.358 1.413.085 404.819 866.856 84.858 Total (€) (€/ha) Total 650 560 902 790 407 911 612 517 646 926 -

39 BirdLife International · Reality Check Picture 2. Grassland converted into arable land. Although classified within the Land Parcel Identification System (LPIS) as arable, this parcel was in reality grassland and was ploughed up in 2006. This conversion has caused intense soil erosion. In 2009, this farmer received a €509 payment, including SAPS and “Top-Up”47.

B. Destruction of watercourses and wetlands Watercourses and wetlands located in intensively managed pastures can be damaged by livestock if not protected by fencing. These sites are important for endangered fauna and flora and their destruction can lead to the loss of water purification functionality, thus resulting in water pollution. Wetland features are usually extremely important for biodiversity in agro-ecosystems. These sites are very attractive for waders, especially Lapwing (Vanellus vanellus), a species which has suffered a sharp decline in numbers in recent decades. But also other wildlife concentrates around these landscape features. Unfortunately there is no protection of these sites, neither through cross- compliance nor through agri-environment measures. In some cases, these wetlands are just the temporary result of inefficient drainage systems, heavy rainfalls or snow thaw. As these areas are difficult to cultivate and usually excluded from the official farm area which is eligible for CAP payments, they are either drained or left to overgrow.

Picture 3. A wetland damaged by an inappropriate livestock grazing regime. This small wetland is an ideal breeding site for the Corncrake (Crex crex) and Common snipe (Gallinago gallinago). The size of this plot is 56.9 ha and the farmer received €27 377 (480 €/ha) in 2009. This payment includes support for agri-environment measures (organic farming and pasture management), Less Favoured Area payment, direct support and top-up.

47. Source: SZIF/payment agency, rate: 26,563 CZK/Euro on 1.1.2010. This reference applies also to all the CAP payment data in this chapter, unless otherwise specified.

40 Picture 4. Drainage of wetlands on arable land

Picture 5. Drainage of wetlands on grassland Reality Check

BirdLife International ·

41 Picture 6. Vegetation on ditch banks being heavily damaged by inappropriate livestock management. Ditch banks can be important sites for wildlife if vegetation is not destroyed. Da- maged vegetation can also lose its functionality as a water filter, resulting in water pollution. In 2009, public subsidies for this 14.5 ha grassland parcel amounted to €10 935 (753 €/ha), and the payment included agri-environment payments for organic conversion and grassland reversion, Less Favoured Area payment, SAPS and top-up payment.

C. Unsuitable field boundaries One of the problems related to farm subsidies is the way in which the eligible area is determined. Rental fees paid by tenant farmers are based on estate maps, while areas eligible for CAP subsidies are based on LPIS (Land Parcel Identification System). This means that many farmers pay rental fees for an area larger than that eligible for CAP payments, and represents an incentive to increase the field size at the expense of important landscape features such as field margins and ditches.

Picture 7. Ploughing too close to the field boundary, thus damaging the root system of old apple trees and reducing the ecological functionality of vegetation along the ditch. Although the protection of these landscape features is theoretically built into cross compliance, these very basic requirements are often not fulfilled. In this case, the size of the field is 8.6 ha and the farmer received € 1588 from SAPS and top-up in 2009 (184 €/ha).

42 4.4 Conclusions

Whilst it is not possible to draw definitive conclusions from such a restricted sample study, this analysis seems to indicate that: 1. Farmers in areas that are important for biodiversity conservation (e.g. Natura 2000 sites) do not receive more support than farmers outside these areas. 2. Farms representing positive models for biodiversity conservation tend to be managed according to EU organic farming standards. ‘Good practice’ farms also tend to receive more CAP payments than ‘bad practice’ farms through participation in agri-environment schemes. 3. Although important landscape features on farmland are protected by law and GAEC (Good Agricultural and Environmental Condition) standards, a number of cases of damage were documented. The protection of these landscape features should be properly enforced, and ap- propriately considered during cross compliance inspections. 4. Soil erosion is one of the main environmental problems associated with land management in the Czech Republic. New GAEC rules define clear conditions for farming on land at risk of erosion and represent an important step forward. However, other practices which mitigate soil erosion, such as crop diversification, field-size reduction and creation of landscape features should be further encouraged. 5. The preservation of wetland features should become a priority for the conservation of biodiversity in agricultural landscapes and to increase the water retention potential of farmland as a way to adapt to climate change.

Although the size and geographical spread of this sample is relatively limited, the analysis provides a first insight into the links between CAP payments and the environmental performance of farms in the Czech Republic, and this methodology could be extended to larger samples and exported to other countries. Reality Check

BirdLife International ·

43 Discussion

44 CAP spending intensity does not reflect nature conservation priorities. For example, farms in Na- tura 2000 sites tend to receive lower (Latvia, Spain, Scotland) or comparable (Czech Republic, En- gland) total payments to those received by farms outside Natura 2000. The analyses carried out in Spain and Scotland show that the Single Payment Scheme tends to be unfavourable to farms in Natura 2000 sites. This is probably due to the fact that, as a consequence of natural or legal restric- tions, low-intensity farming can be particularly common in these areas, and therefore SPS historical entitlements are lower than outside Natura 2000. This is partly compensated by rural development payments, which tend to have a more even distribution.

Although there is no guarantee that funds spent in Natura 2000 are actually targeted to nature conservation, the fact that spending intensity in Natura 2000 is not higher than elsewhere indicates that the CAP is not giving priority to funding Natura 2000 on farmland and, even if CAP instruments were properly designed, only a low level of support would be directed to nature conservation.

An analysis done by the European Environment Agency48 shows that Pillar 1 spending intensity across the EU is generally lower in regions with a high proportion of High Nature Value (HNV) farmland, while there is no consistent relationship between rural development expenditure and the share of HNV farmland. Similar patterns were found by a previous study commissioned by the RSPB/BirdLife UK49. The analysis undertaken in Spain indicates that funding tends to be consistently lower in areas where extensive production systems occur, while higher levels of support are directed to input-intensive sectors. The sample of farms examined in Germany shows that organi- Discussion cally managed farms receive significantly lower direct payments per hectare than conventionally managed farms. The lower amount of subsidies directed to Natura 2000 sites, High Nature Value and organic farming systems demonstrates that direct payments are not specifically rewarding farmers who engage in environmentally-friendly production systems or financing areas where nature conservation is a priority. As the direct payment system generally reflects production levels from a historic reference period, this set of results is perhaps not surprising. However, such spending patterns are clearly incompatible with EU conservation priorities and legal obligations toward the environment as well as representing an outdated payment approach and misuse of public money. Per hectare expenditure varies hugely across different Member States, as does the distribution between CAP pillars. EU-15 Member States tend to have higher CAP budget allocations than EU-12 Member States, and this results in lower levels of funding for the latter. Direct payments absorb the large majority of CAP spent in the old Member States, and rural development funds are generally insufficient to compensate for the inequalities created by the historical allocation of entitlements. Furthermore, support coupled to production, whilst limited to a few sectors, appears to concen- trate the support on farming systems that are unlikely to benefit biodiversity50.

Between-pillar distribution is much more balanced in the new Member States, and spending intensity seems to be relatively even51. However, as shown in the Czech Republic, while the perverse subsidies pattern of the old Member States is absent under the SAPS system, there is still no sys- tematic link between level of payments and environmental performance. Furthermore, eligibility problems and mis-implementation of cross compliance rules may exclude significant areas of valuable habitat from support and therefore incentivise their conversion to less wildlife-friendly agricultural land uses.

48. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report

No12/2009. · Reality Check 49. Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Insti- tute for European Environment Policy. 50. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. 51. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. BirdLife International

45 Examples collected at farm level suggest that a large proportion of funds is directed to farms engaged in unsustainable practices, supporting evidence that cross compliance is failing to prevent environmental damage and that, despite several rounds of reform, the polluter-pays principle is still not reflected within the CAP52. In Spain, it became clear that high levels of expenditure on intensive and irrigated farming systems is spatially associated with severe environmental problems such as water depletion and pollution, thus suggesting a causal relationship between certain CAP instruments and environmental degradation.

From a nature conservation perspective, CAP spending is extremely inefficient and even counter- productive. Market instruments, coupled payments and the Single Payment Scheme operating in the EU-15 Member States often tend to give more incentives to environmentally damaging farming systems, while rural development payments are still untargeted and generally insufficient to compensate for the perverse distribution of Pillar 1 payments.

The level of detail of CAP subsidy data released by Member States is, however, too low to draw definitive conclusions on the performance of individual CAP budget lines. For example, individual beneficiaries’ data on direct payments do not differentiate between SPS/SAPS and coupled payments, while the figure given for rural development payments incorporates measures as different as farm modernisation, training, marketing campaigns, agri-environment, afforestation and village renewal. Another misleading categorisation is the reference to the municipality where the beneficiary resides, rather than to where the supported land is actually located or the project developed. Transparency levels need to be improved in order to allow a thorough analysis of the CAP and its impacts. Better data quality would enable testing of individual policy instruments and more accu- rate spatial analyses, thus overcoming the limitations experienced in this exercise.

This study is a demonstration of different approaches that can be followed to investigate the relationships between CAP spending and biodiversity, in order to use the large amount of new data for the purpose of understanding where the policy is failing and what problems need to be ad- dressed. As shown in the Spanish case study, the analysis can be extended to other environmental problems such as water pollution and depletion, as well as soil erosion and desertification.

52. BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity?

46 · Reality Check

BirdLife International

47 Policy recommendations

48 This analysis shows that the CAP is still far from supporting biodiversity conservation in a consistent way. However, due to its large financial resources and significantly large coverage of European land, it has a considerable potential to steer vast sections of the countryside towards more sustainable land management.

The debate on the future of the CAP after 2013 has started in earnest, and EU institutions and Member States must seize this opportunity to undertake an ambitious reform of this policy. This would substantially improve its delivery against societal objectives and its legitimacy in the discus- sions on the EU budget allocations for the post-2013 financial perspective.

Ill-designed subsidies, such as coupled payments and certain market interventions, need to be urgently removed, while more robust environmental conditions need to be attached to all rural development measures financing infrastructure and modernisation. Such change is necessary in order to avoid additional pressure on natural resources such as water and soil.

This study supports the findings of existing pieces of work53 showing that the historical model for the Single Payment Scheme discriminates against low-input and nature-friendly farms, while unsustainable farming systems receive higher subsidies. Although a move away from the historical basis is compelling, this alone would not improve the efficiency and effectiveness of CAP spending in relation to biodiversity conservation.

Policy All CAP funding should deliver clear objectives and all payments should take the form of a contract between land managers and society, clearly identifying the objectives and undertakings for which the beneficiary is being rewarded. The polluter pays principle needs to be fully reflected in this recommendations policy. All area-based payments should support sustainable land management significantly above and beyond mandatory legal requirements, with additional spending for particularly beneficial systems such as High Nature Value and organic farming. Targeted agri-environment payments should address specific environmental needs and deliver additional benefits. Sufficient funding should be directed to the implementation and management of the Natura 2000 network, supporting land managers who are subject to particularly demanding management prescriptions.

In addition, environment protection and sustainable agriculture should be promoted through tools such as awareness-raising campaigns, advisory services, training, support to investments and cooperation, specific local planning etc, as long as these instruments are functional to the delivery of environmental objectives54.

The achievement of the ambitious 2020 biodiversity targets requires European institutions and Member States to enact an equally ambitious reform of the Common Agricultural Policy. EU leaders must seize the opportunity to reshape EU policy making and have a lasting positive impact on our common European environment. · Reality Check

53. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Institute for European Environment Policy. 54. For more details on this vision for the future of the CAP see: BirdLife, EEB, EFNCP, IFOAM & WWF (2009) Proposal for a new EU Common Agricul- tural Policy. http://www.birdlife.org/eu/pdfs/Proposal_for_a_new_common_agricultural_policy_FINAL_100302.pdf BirdLife International

49 References

50 7.1 References to introduction, discussion and policy recommendations

• BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity? • BirdLife International (2009b) Could do better. How is EU rural development policy delivering for biodiversity? • BirdLife, EEB, EFNCP, IFOAM & WWF (2009) Proposal for a new EU Common Agricultural Policy. • Council of the European Union (15 March 2010) Council conclusions on biodiversity post-2010 – EU and global vision and targets and international access and burden sharing regime. • European Commission (2004) Communication from the Commission to the Council and the European Parliament on financing Natura 2000. COM(2004) 431 final. • European Commission (2009) Report from the Commission to the Council and the European Parliament. Composite report on the conservation status of habitat types and species as required under Article 17 of the Habitats Directive. COM(2009) 358 final. • European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. • European Environment Agency (2009b) Progress towards the European 2010 biodiversity target. • Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: References gaining evidence for the EU budget review. Institute for European Environment Policy. • Spanish Ministry of Environment, Rural and Marine Affairs (2010) “Cibeles” piorities – halting the loss of biodiversity in Europe. • Stoate C, Báldi A, Beja P, Boatman ND, Herzon I, van Doorn A, de Snoo GR, Rakosy L & Ramwell C (2009) Ecological impacts of early 21st century agricultural change in Europe – A review. Journal of Environmental Management 91: 22-46.

7.2 References to Spanish Case Study

• European Commission - Directorate General for Agriculture and Rural Development Novem- ber (2008) Direct payments distribution in the EU-25 after implementation of the 2003 CAP reform based on FADN data. • European Commission - Directorate General for Agriculture and Rural Development Decem- ber (2009) Agricultural Policy Perspectives. Brief nº1. • JRC - Paracchini M L, Petersen J-E, Hoogeveen Y, Bamps C, Burfield I, van Swaay C (2008) High Nature Value Farmland in Europe. • MARM (2008) Fondos Europeos Agrícolas. FEAGA Y FEADER. Informe mensual de Pagos, oc- tubre 2008. Ejercicio 2007-2008. • MARM (2009) Reforma PAC 2003: efectos sobre las ayudas sectoriales. Análisis y Prospectiva - Serie AgrInfo nº 17. Subdirección General de Análisis, Prospectiva y Coordinación, Subsecre- taría. Ministerio de Medio Ambiente y Medio Rural y Marino.” • MARM (2009) National Framework for Rural Development (Updated).

7.3 References to German Case Study

• Bundesanstalt für Landwirtschaft und Ernährung (BLE) (2009) Datenbank zum Abruf von In-

formationen zu den Empfängern der EU-Agrarfonds. Internetabruf unter http://www.agrar- · Reality Check fischerei-zahlungen.de/Suche im August 2009. • Bundesanstalt für Landwirtschaft und Ernährung (BLE) (2010) Farming in Germany – Facts and Figures http://www.bmelv.de/cln_182/sid_DCE87804F823EA 2477B22D48E631B982/SharedDocs/ Standardartikel/EN/Agriculture/FarminginGermany.html#doc381588bodyText1 BirdLife International

51 • IFAB (2009) Photos from different regions in Germany. • Oppermann R, Braband D & Haack S (2005) Landwirtschaft. - Berichte über Landwirtschaft Band 83, 76-102. • Tiessen J, van Stolk C (2007) The Introduction of Single Farm Payments in Finland and Ger- many. RAND Europe

7.4 References to Czech Case Study

• BirdLife International (2004) Birds in Europe: population estimates, trends, and conservation status Cambridge, UK: (BirdLife Conservation Series No.12). • Keenleyside C, et al (2006) Farmland birds and agri-environment schemes in the New Member States. A report for the Royal Society for the Protection of Birds. RSPB, Sandy, UK. • Konvička M, Beneš J & Čížek L (2005) Ohrožený hmyz nelesních stanovišť: ochrana a management. – Sagittaria, 127. • Ministerstvo zemědělství ČR (2009) Zpráva o stavu zemědělství ČR za rok 2008 - “zelená zpráva”. • Prazan J, (2002) Agriculture and Environment in the Czech Republic. National report. IEEP, London http://www.ieep.org.uk. • Voříšek P, Klvaňová A, Brinke T, Cepák J, Flousek J, Hora J, Reif J, Šťastný K & Vermouzek Z, (2009) Stav ptactva České republiky 2009. Sylvia 45, Praha, Česká společnost ornitologická. • Zámečník V (2008) The Common Agricultural Policy (CAP) and the environment: a reform agenda for the New Member States. Praha, Česká společnost ornitologická.

52 Austria Belgium Bulgaria Cyprus

Czech Republic Denmark Estonia Finland

France Germany Greece Hungary

Ireland Italy Latvia Lithuania

Luxembourg Malta The Netherlands Poland design by:design www.studiostraid.be

Portugal Romania Slovakia Slovenia

Spain Sweden United Kingdom Printed on Cyclus Print - 100% recycled paper - 100% recycled Print on Cyclus Printed

The German Marshall Fund of the United States is an American Institution that stimulates the exchange of ideas and promotes cooperation between the United States and Europe in the spirit of the postwar Marshall Plan. Working in partnership with the William and Flora Hewlett Foundation, GMF’s work on trade and development This report has been produced with the financial support aims to promote greater cooperation between the United States Licence DK/11/1 certified on EU Ecolabel paper - Printed and graphic paper Copying of the German Marshall Fund of the United States of and Europe on trade and agricultural policies as vital instruments of America. global prosperity. cover picture: © Trees Robijns This publication is part-financed by the European Union. Sole chapter pictures: 1-©rspb-images.com responsibility lies with the author and the European Commission 2-©Trees Robijns is not responsible for any use that may be made of the information 3-©Andy Hay (rspb-images.com) contained therein. 4-©CSO Archive 5-©Ariel Brunner 6-©Ariel Brunner 7-©Ariel Brunner picture page 47: ©Ariel Brunner