Introduction of new European Union Agricultural Policy delayed for two years.

The EU Council has announced that the introduction of the new Common Agricultural Policy (CAP 2) for Europe will be delayed until the end of 2022.  The announcement was made after the Council reached an understanding with the European Parliament (‘Parliament’) on 30 June 2020.  It has been agreed that support for European farmers will continue under the current legal framework (CAP 1) until the introduction of the new policy.

CAP 2 was originally meant to come into effect 1 January 2021.  Member States were to draw up CAP 2 Strategic Plans and to implement them after their approval by the European Commission (the ‘Commission’). The intention of the Commission, in introducing a new policy, was to ensure that agricultural support remained a common policy for the EU with a level playing field, whilst also giving Member States greater responsibility in how they met the objectives and achieved the targets set.   However, in the later part of 2019 it became apparent that the relevant legislative procedures would not be completed in time to implement CAP 2 as planned and discussions began between the Commission and Parliament to plan for a transition period. Those discussions have now been concluded and the final adoption of the transitional regulation, which is closely linked to the multinational financial framework currently under negotiation, is expected by the end of 2020.

The announcement will be welcomed by the farming sector since it will allow for the continuation of uninterrupted payments; providing at least one welcome dose of predictability during the Covid 19 crisis.  In the past year alone, Cyprus has received more than EURO 102m from CAP 1.  The funds received since 2014 have been instrumental in transforming Cyprus agriculture into a more modern, efficient sector which is focused on production quality rather than simply on quantity.  The result of this has been a steady growth in the value of the sector since 2014.  Agriculture now accounts for approximately 2.1% of GDP.

It is presumed that the announcement will be welcomed by the Cyprus Minister for Agriculture, Rural Development and the Environment, Costas Kadis.  Mr. Kadis has been a vocal supporter of the more ambitious environmental and climate goals linked to CAP2; however, he has also strongly advocated the need for a smooth transition to the new policy and, the provision of transitional support.

The Progress Report on CAP2 and the understanding reached between the Commission and Parliament may be viewed here.

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