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The Green Deal and the CAP: Policy Implications to Adapt Farming Practices and to Preserve the EU’S Natural Resources

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The Green Deal and the CAP: Policy Implications to Adapt Farming Practices and to Preserve the EU’S Natural Resources STUDY Requested by the AGRI committee The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources Policy Department for Structural and Cohesion Policies Directorate-General for Internal Policies PE 629.214 - November 2020 EN RESEARCH FOR AGRI COMMITTEE The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources Abstract The June 2018 CAP proposals are only marginally consistent with the ambitions of the Green Deal. This is also the case of the regulation revisions being adopted by either the Council or the European Parliament in October 2020. Making EU agriculture consistent with the Green Deal but would require a whole food chain policy that encompasses more stringent instruments on the supply side and extensive changes in eating patterns. This document was requested by the European Parliament's Committee on Agriculture and Rural Development. AUTHORS INRAE and AgroParisTech; Hervé GUYOMARD, Jean-Christophe BUREAU, Vincent CHATELLIER, Cécile DETANG-DESSENDRE, Pierre DUPRAZ, Florence JACQUET, Xavier REBOUD, Vincent REQUILLART, Louis- Georges SOLER, Margot TYSEBAERT Research manager: Albert MASSOT Project, publication and communication assistance: Catherine MORVAN, Kinga OSTAŃSKA Policy Department for Structural and Cohesion Policies, European Parliament LINGUISTIC VERSIONS Original: EN ABOUT THE PUBLISHER To contact the Policy Department or to subscribe to updates on our work for the AGRI Committee please write to: [email protected] Manuscript completed in November 2020 © European Union, 2020 This document is available on the internet in summary with option to download the full text at: https://bit.ly/35HmZJg This document is available on the internet at: http://www.europarl.europa.eu/RegData/etudes/STUD/2020/629214/IPOL_STU(2020)629214_EN.pdf Further information on research for AGRI by the Policy Department is available at: https://research4committees.blog/AGRI/ Follow us on Twitter: @PolicyAGRI Please use the following reference to cite this study: Guyomard, H., Bureau J.-C. et al. (2020), Research for AGRI Committee – The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources. European Parliament, Policy Department for Structural and Cohesion Policies, Brussels. Please use the following reference for in-text citations: Guyomard, Bureau et al. (2020) DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy. © Cover image used under the licence from Adobe Stock. The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources CONTENTS LIST OF ABBREVIATIONS 7 LIST OF BOXES 11 LIST OF FIGURES 11 LIST OF TABLES 12 EXECUTIVE SUMMARY 13 1. INTRODUCTION 17 2. AGRICULTURE AND FOOD IN THE GREEN DEAL 19 2.1. The Green Deal in a nutshell 19 2.1.1. Climate policy in the Green Deal 20 2.1.2. The EU Biodiversity Strategy for 2030 21 2.1.3. The Farm to Fork Strategy 21 2.1.4. Other items of the Green Deal of particular interest for agriculture and food 22 2.2. Main elements of the Green Deal related to agriculture and food 23 2.2.1. A review of Green Deal initiatives with potential impacts on agriculture and food 23 2.2.2. Climate initiatives 27 2.2.3. Biodiversity initiatives 29 2.2.4. Farm to Fork Strategy 30 2.2.5. Circular bio-economy 32 2.2.6. External policy 32 2.2.7. Just transition 32 2.3. Budgetary issues 33 2.3.1. The original Green Deal budget 33 2.3.2. The NGEU recovery plan budget 34 2.3.3. The MFF budget 35 2.3.4. The CAP budget 36 2.4. Institutions’ and stakeholders’ reactions 36 3. ASSESSING THE GREEN DEAL CHALLENGES FOR EUROPEAN AGRICULTURE AND FOOD 41 3.1. Agriculture and climate 41 3.2. Agriculture and the environment 45 3.2.1. Pesticides 45 3.2.2. Fertilizers 47 3 IPOL | Policy Department for Structural and Cohesion Policies 3.2.3. Antimicrobials 48 3.2.4. Organic farming 49 3.2.5. Protected areas and restoring agro-ecosystems 51 3.3. Promoting a circular bio-economy 52 3.3.1. The EU bio-economy 52 3.3.2. Food losses and waste, packaging and recycling 54 3.4. Towards healthier and more environmentally friendly food industries and diets 55 3.4.1. Sustainability trends in the food sector 55 3.4.2. Climatic and land-use impacts of food diets 58 3.4.3. Food expenditure and food insecurity 59 4. CHANGES IN AGRO-FOOD SYSTEMS REQUIRED TO ACHIEVE THE GREEN DEAL TARGETS 61 4.1. Impacts of technical solutions on Green Deal targets and goals 66 4.1.1. Precision farming and fast broadband internet access in rural areas 66 4.1.2. Agro-ecology: integrated pest management, nutrient management, organic farming 67 4.1.3. Veterinary products 69 4.1.4. Carbon balance: feed additives, carbon sequestration, afforestation and agroforestry, restauration of wetlands and peatlands 70 4.1.5. Circular bio-economy, losses and waste 72 4.1.6. Food diets 73 4.2. Policies 74 4.2.1. Efficiency gains 75 4.2.2. The re-design of production systems 75 4.2.3. Changes in diets and consumption behaviours 80 4.2.4. Synthesis 83 5. HOW THE FUTURE CAP COULD SUPPORT THE GREEN DEAL AMBITIONS, OBJECTIVES AND TARGETS: RECOMMENDATIONS 85 5.1. The proposals for the future CAP 88 5.1.1. The EC June 2018 proposals for the future CAP 88 5.1.2. More than two years of discussions on the future CAP 92 5.1.3. Is the future CAP on track to achieve greater climatic and environmental objectives? 96 5.2. Strengthening CAP proposals to achieve the Green Deal objectives related to agriculture 98 5.2.1. General framework 98 5.2.2. The need to adapt the CAP draft regulation instruments 101 5.2.3. More effective instruments for climate change mitigation 102 4 The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources 5.2.4. More effective instruments for biodiversity 104 5.2.5. More effective instruments for a toxic-free environment 106 5.2.6. Animal welfare 107 5.2.7. Climate- and environment-related interventions in Pillar 2 108 5.2.8. Three ring-fenced budgets within the CAP for the climate and the environment 120 5.3. Governance issues 122 5.3.1. The New Delivery Model for the CAP 122 5.3.2. Turning Green Deal objectives and targets into CAP commitments 123 5.3.3. Performance indicators 126 5.4. Economic considerations 128 5.4.1. Assessing the possible impacts of our recommendations for the future CAP on farm incomes 128 5.4.2. Feedback effects linked to land-use and price changes 130 5.4.3. Feedback effects linked to trade and trade regulations 131 6. CONCLUSION 135 REFERENCES 139 5 IPOL | Policy Department for Structural and Cohesion Policies 6 The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources LIST OF ABBREVIATIONS AECM Agri-environmental and climatic measures AKIS Agricultural Knowledge and Information System AWU Average Work Unit CAP Common Agricultural Policy COP Cereals, Oilseeds and Protein crops DASH Dietary Approaches to Stop Hypertension EAFRD European Agricultural Fund for Rural Development. EAGF European Agricultural Guarantee Fund EC European Commission ECA European Court of Auditors EEA European Environment Agency EFA Ecological Focus Area EIP European Innovation Partnership ELO European Landowners Organization EMA European Medicines Agency EP European Parliament ETS Emissions Trading Scheme EU European Union FADN Farm Accounting Data Network FAO Food and Agriculture Organization (of the United Nations) F2FS Farm to Fork Strategy GAEC Good Agricultural and Environmental Condition(s) GDP Gross Domestic Product 7 IPOL | Policy Department for Structural and Cohesion Policies GHG GreenHouse Gas HRI Harmonized Risk Indicator IEEP Institute for European Environmental Policy IPCC Intergovernmental Panel on Climate Change IUCN International Union for Conservation of Nature IPM Integrated Pest Management LU Livestock Unit LULUCF Land Use, Land-Use Change and Forestry MEP Member of the European Parliament MFF Multiannual Financial Framework MFN Most Favoured Nation MS Member State MT Million tonnes NDM New Delivery Model NGEU Next Generation EU (recovery plan) NGO Non-Governmental Organization NSP National Strategic Plan OECD Organization for Economic Co-operation and Development PCU Population Correction Unit PES Payment for Environmental Services PGP Provider-Gets Principle PPP Polluter-Pays Principle SDG Sustainable Development Goal 8 The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources SMR Statutory Management Requirement SWOT Strenghts, Weaknesses, Opportunities and Threats TFEU Treaty on the Functioning of the European Union UAA Utilized Agricultural Area VAT Value Added Tax WTO World Trade Organization WTP Willingness To Pay 9 IPOL | Policy Department for Structural and Cohesion Policies 10 The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources LIST OF BOXES Box 4.1: Impacts of an increase in organic farming area up to 25% on overall expenditures (uses) of pesticides and fertilizers in the EU-28 69 Box 4.2: Incomes of organic versus conventional farms in the EU-28 77 Box 5.1: Animal welfare as a global
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