What is the new Common Agricultural Policy and what will it mean for Malta’s farmers?

What is the new Common Agricultural Policy and what will it mean for Malta’s farmers?

The Common Agricultural Policy was initiated by the EU with the aim of guaranteeing affordable food security, while simultaneously improving productivity of agricultural land and supporting the famers who make it all possible. The current CAP framework is built on two key pillars. The first pillar grants financial support to farmers, depending on the area of land farmed, while the second focuses on rural development and agri-environmental measures and is co-financed by the member states. 

Many of CAP’s shortcomings stem from the social and economic setting in which it was first launched. The first CAP was drawn up in 1962, soon after the Second World War, when sheer volume of produce was prioritized. This therefore resulted in measures that encouraged large, intensive farmlands.

Following years of discussion a new Common Agricultural Policy is set to be implemented as from January 2023, with the European Commission describing the new CAP as being ‘fairer, greener, more animal friendly and flexible’. How much has CAP really changed, and do Maltese farmers stand to benefit from these changes?

A greener and fairer CAP

The reform of the CAP provided an opportunity to align farming policy with the Union’s environmental sustainability agenda, allowing it to be implemented holistically with agricultural elements of the European Green Deal, namely the Farm to Fork strategy. This is encouraging as in the past, the CAP was criticized heavily by environmentalists for being biased towards large, industrialized farms, incentivizing unsustainable, intensive agriculture and creating harshly competitive international markets. In 2019 and 2020, the European Commission itself admitted that this policy had negatively impacted the EU’s biodiversity and water quality. It was clear that in its former state, the CAP would not promote sustainable practices, and would actively undermine the objectives set by the EU for biodiversity and water quality protection.

The payments made to farmers under CAP will now fall under a new measure called the ’Echoshemes’, which will incentivize farmers to implement sustainable and climate-friendly practices. These include the dedication of larger areas of agricultural land to biodiversity protection, peat, and wetland preservation, and lastly the encouragement of organic and carbon farming. The latter will establish new income sources for farmers. 25% of the Member States’ income support budget will be allocated to these schemes.

The support of young farmers will be made mandatory, with a minimum of 3% of the CAP budget of each Member State to be used as financial aid for their income support, start-ups, and investments. This, tied to additional measures that facilitate access to land and land transfers, may help breathe new life into the sector by helping the new generation of farmers. 

In addition, a minimum of 10% of the CAP budget will be distributed to smaller, family-run farms. An additional new feature of CAP is social conditionality, in which the beneficiaries of this strategy will be required to respect European level labour and social laws.

A more flexible CAP

A new aspect of the 2023 CAP will be its greater responsiveness to the individual needs of member states. Previous CAPs were often criticized for a one-size-fits-all approach, which left smaller farmers operating in countries with particular environmental issues feeling at a disadvantage. This time around, each Member State will develop its own CAP strategic plan, combining funding for income support, rural development, and market measures. In this way, the policy measures can be shaped around the particular needs and capabilities of each country. These national plans will be implemented over a span of 5 years (2023-2027).

What does all this mean for Maltese farmers?

One major issue that Maltese farmers have had with CAP in its previous forms was that it was designed to cater for the needs of farmers in larger member states whose holdings are far larger than those found locally. This criticism was linked to a perception that CAP policies were overall extremely rigid and did not sufficiently take into account Malta’s very particular characteristics.

If the 2023 CAP truly delivers on the promised reforms, then the higher degree of flexibility that it will offer will be particularly beneficial for Maltese farmers. In June 2020, it was confirmed that direct aid for Maltese farmers under CAP has been increased to 3 million. This is a welcome increase from the 650,000 that was initially on the table.

Another positive feature is that the 2023 CAP is tailoring the income support mechanism to the particular needs of small to medium sized family farms, which describes the vast majority of Maltese farms. This significantly reduces the preferential treatment that former income supports systems gave to large, more industrial farms, and is a welcome departure from the one-size-fits-all-approach which so many Maltese farmers have criticized.

The second aspect of the new CAP that is particularly relevant to Maltese farmers concerns the rural development aspect of the policy, and how this has been reformed. These reforms can provide more funding opportunities for innovation and product improvement for young farmers. This is especially helpful for young farmers who want to invest in more sustainable farming practices, or focus on new agricultural niches, such as organic farming.

It is no secret that Maltese agriculture is confronting very challenging times. The unprecedented impact of COVID together with effects of climate change have worsened an already precarious situation. The promised CAP reforms may therefore provide more benefits and opportunities for Malta’s farmers, providing more funds and flexibility to improve their efficiency and competitiveness in an environmentally sustainable manner. 

Written by Bettina Nardelli