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Common agricultural policy

Launched in 1962, the EU’s common agricultural policy (CAP) was originally intended to improve agricultural productivity, so that consumers had a stable supply of affordable food and to ensure that EU farmers could make a reasonable living.  The EU now uses CAP to try to address more challenges in respect of food security, climate change and the sustainable management of natural resources. 

The CAP is a common policy for all the Member States of the European Union. It is managed and funded at European level from the resources of the EU annual budget.

In 2010 the EU Commission presented "The CAP towards 2020", which outlined options for the future of the CAP and sought the views of stakeholders.  In June 2013, a political agreement on the reform of the CAP was reached between the EU Commission, the European Parliament and the Council.

This led to the Council of EU Agriculture Ministers formally adopting the four Basic Regulations for the reformed CAP, which had been approved by the European Parliament, as well as Transition Rules for 2014.
 
The four Basic Regulations and the Transition Rules were published in the Official Journal on 20 December 2013. The four Basic Regulations and the Transition Rules comprise of:

  • Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005;
  • Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC)  No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008;
  • Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulations (EC) No 637/2008 and Council Regulation (EC) No 73/2009;
  • Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007;
  • Regulation (EU) No 1310/2013 of the European Parliament and of the Council of 17 December 2013 laying down certain transitional provisions on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), amending Regulation (EU) No 1305/2013 of the European Parliament and of the Council as regards resources and their distribution in respect of the year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations (EU) No 1307/2013, (EU) No 1306/2013 and (EU) No 1308/2013 of the European Parliament and of the Council as regards their application in the year 2014.

The stated aim of the reforms of the CAP set out in the four Basic Regulations is to strengthen the competitiveness of the agriculture sector, promote sustainable farming and innovation and support jobs and growth in rural areas.

In order to fully implement the political agreement on the reform of the Common Agricultural Policy reached in June and September 2013 by the European Parliament, the Council and the European Commission, the European Commission has exercised the powers given to it by the Basic Regulations and made delegated acts.

Implementation of the CAP in Wales

The CAP is implemented in Wales by the Welsh Ministers. 

Where the Welsh Ministers, or a Secretary of State of the UK Government propose to take action to give effect to EU law in Wales, they must first have been ‘designated’ by an Order in Council made under section 2(2) of the European Communities Act 1972 as having the power to take action in relation to a particular aspect of EU law.  Therefore, before the Welsh Ministers can take any action that is needed in order to give effect in Wales to the CAP Basic Regulations and the Transitional Rules for 2014, the Welsh Ministers must be designated by Order in Council to do so.

A number of Orders in Council have been made which designate the Welsh Ministers as having the power to take action in Wales in relation to the CAP (see the European Communities (Designation) (No.3) Order 1999 (SI 1999/2788), the European Communities (Designation) (No. 5) Order 2010 (SI 2010/2690).

What the CAP enables the Welsh Ministers to do

The CAP for Wales enables the Welsh Ministers to fund activities which support farmers, the countryside and rural communities. These activities encourage the sustainable management of agriculture and the environment.

There are four key areas:

  • agriculture;
  • forestry, environment and countryside;
  • supply chain for agriculture and forestry;
  • quality of life in rural areas.

From 2015, the two main planks of the implementation of the CAP in Wales comprise the Basic Payment Scheme and the Rural Development Programmes.

The Basic Payment Scheme (BPS)

The BPS pays eligible farmers and payments are linked to the area farmed.  To claim BPS each year, applicants must be a ‘farmer’ and an ‘active farmer’. Farmers can only claim BPS on land that is eligible for the scheme and is ‘at their disposal’ on 15 May of each year. They have to declare all the agricultural land that is part of their holding when they apply for BPS.

Under BPS, farmers have to meet the ‘greening’ rules to receive a greening payment as part of their total BPS payment. All farmers who claim BPS (and/or rural development programme payments) must follow ‘Cross compliance’ rules which tells applicants what they must (and must not) do to receive BPS or rural development programme payments. 

Cross compliance is made up of ‘Statutory Management Requirements’ (SMRs) and ‘Good Agricultural and Environmental Conditions’ (GAECs). They are concerned with:

  • public, animal and plant health
  • environment, climate change and good agricultural condition of land, and
  • animal welfare.

Although many of the framework provisions of the BPS are set out in Regulation (EU) 1307/2013 and are directly applicable and have direct effect in the law of England and Wales, the Welsh Ministers, by subordinate legislation, have legislated to give effect to certain aspects of the arrangements for the payment of BPS and the requirements of Cross Compliance that will apply in Wales.  The Welsh Ministers have made the following statutory instruments to give effect to the reformed CAP in Wales:

  • The Rural Development Programmes
  • The Basic Regulations provide that assistance may be granted from the European Agricultural Fund for Rural Development towards operations which promote rural development in Wales.

The Welsh Ministers have made the Rural Development Programmes (Wales) Regulations 2014 (SI 2014/3222 (W. 327) (‘the Regulations’) which apply to the Rural Development Programmes (“RDP”) established under Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 and Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013. In Wales, these Regulations will regulate new programmes which are administered by the Welsh Ministers under the European Agricultural Fund for Rural Development.

The Regulations supplement the European Union legislation listed in the Schedule to the Regulations (“the EU legislation”). The provisions in the EU legislation are directly applicable and have direct effect in the law of England and Wales. The Regulations provide a domestic legal framework for the operation of the EU legislation in Wales.

 

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