Towards a new public goods payment model for remunerating farmers under the CAP Post-2020

Summary

Background
The direct payment system and the Rural Development Programmes, as the pivotal elements of the Common Agricultural Policy (CAP), have reduced some undesirable environmental and economic side effects of pre-1992 agricultural policy. However, even after 25 years of implementation and several major reforms, fundamental challenges remain (see Annex 1):
- Missing link between CAP objectives, spending and instruments (Buckwell, 2015; Stolze et al., 2016; Pe’er et al., 2017);
- Ineffective Pillar 1 Greening component (Forstner et al., 2012; Hart, 2015; Lakner and Holst, 2015; Pe’er et al., 2017);
- Indifferent effectiveness of Pillar 2 agri-environment and climate measures (Baldock and Mottershead, 2017);
- Low acceptance of the CAP by both farmers and citizens (Pacini et al., 2015; ECORYS & European Commission, 2017; Pe’er et al., 2017).
The total amount of funds dedicated to the agricultural sector is limited and a further increase of the financial support in the mid- and long-term perspective seems to be unlikely. This means farmers are expected to deliver more tangible results in a costefficient way with respect to the environmental, social and economic dimension of sustainability with taxpayer’s money allocated in the Multiannual Financial Framework (MFF), in compliance with international frameworks, in particular the Sustainable Development Goals (SDGs) and the Paris Climate Agreement.
In this report we present a concept for a more effective and cost-efficient CAP by integrating sustainability assessment in the design, targeting and monitoring of policies and in payment allocation. Basing the future CAP on clear sustainability goals and farmer payments on performance towards these goals should lead to a CAP, which is more broadly accepted by both farmers and citizens.