Farmer incomes to be prioritised by EU in current term, expert predicts

Matthews sees no support for pulling EU agriculture into an emissions trading scheme. Farmers' worries are also eased by his view Ursula von der Leyen’s explicit reference to food sovereignty signals less openness to trade, and therefore, less likelihood of a damaging Mercosur deal for farmers.

Matthews, formerly professor of European agricultural policy at Trinity College, Dublin, is a writer and moderator of the long-running CAP Reform blog of news, views and analysis relating to the EU’s Common Agricultural Policy.

His views on the next five years are somewhat in line with Von der Leyen's recent presentation to the European Parliament before a majority of 401 MEPs re-elected her as president of the European Commission for a second consecutive term. 

In the speech, she pledged to guarantee a fair income for European farmers, thus dealing with one of the main demands from the farmer protests across the EU earlier this year. She said farmers “should not be forced” to sell their “good food” below production costs.

However, she was more vague on her plans for sustainable agriculture, despite her 2019 Green Deal plan shaping the 2023-2027 CAP Strategic Plans and bringing years of green transition legislation affecting farmers, such as pesticide restrictions, the Biodiversity Strategy and Nature Restoration Law, sustainable food laws, industrial emission regulations, and deforestation-free rules. 

Legally binding emission reduction targets are, of course, also part of the Green Deal, including the 25% emission cut for Irish agriculture.

However, Green MEPs are not expecting Von der Leyen to go easy on farmers. Instead, they say she has committed to them she would make agriculture a part of the Green Deal, albeit while ensuring farmers can make a living. 

In an interview on the Euractiv news site, the EU Greens’ co-ordinator for agriculture, Thomas Waitz, said he was “optimistic” about von der Leyen’s agri-food plans.

The Austrian MEP said Von der Leyen had acknowledged the agricultural sector had been “untouched” by the Green Deal, and expressed willingness to “make it a part of the sustainable transition”.

That is why most of the Green MEPs voted for her, and helped re-elect Von der Leyen, despite accusing her previously of backtracking on making the agri-food sector more sustainable, and of relaxing CAP environmental rules.

Von der Leyen has publicly recommitted herself to a 90% net emissions reduction target by 2040, on the pathway to net zero emissions by 2050, without spelling out implications for agriculture.

Who do EU farmers believe?

So, who do EU farmers believe? They will learn more within the next few months, from a report of the Strategic Dialogue on Agriculture which Von der Leyen put in place to appease protesting farmers.

Will the EU's agriculture ministers be listened to? At their recent meeting, they called for agriculture to be exempted from net-zero climate plans, and for simpler rules for national administrations. They also emphasised agriculture’s limitations in reducing emissions, and the need for fair distribution of EU subsidies.

Meanwhile, Alan Matthews set out the challenges for leaders in the new EU political cycle.

He said the June 2024 election saw conservative and right-wing political groups gain seats at the expense of liberal and green political groups. This trend is also reflected in the changing composition of member states, so it will inevitably affect decisions of the EU co-legislature of member states and the parliament.

Alan Matthews predicted the rightward political shift will favour farm income over environmental objectives. He said there was both right and left support for small-scale farming and local production, for a more voluntary approach to tackling environmental challenges, and less openness to free trade.

But conservative and far-right groups are likely to oppose further increases in the EU budget, even if they simultaneously demand more support for farmers. Matthews warned the CAP budget could only be maintained (let alone increased), if there was agreement to significantly increase the EU's overall budget ceiling. Budgets are under pressure because the EU must repay its next-generation borrowing, while financially helping countries with decarbonisation, and spending more on defence and security.

Farmers may see more redistribution of direct payments. But that depends on whether income support is directed towards supporting small-scale, marginal, and less intensive farms, or to support productive farming and contribute to food security.

As for paying for environmental improvements, will the polluter pays principle dominate, or will society pay farmers who volunteer to make improvements?

Since 1992, the EU lowered prices for farm produce to safety net levels, and instead subsidised farm incomes. Now, however, prices based on actual costs of production rather than market forces alone are already enshrined in French legislation, and France has proposed this approach be extended to the EU. That debate will have implications, said Alan Matthews, who also noted climate change damage to farms would make increased public resources necessary.

He said EU openness versus protection in agrifood trade policy remained another burning issue for the next political cycle, alongside pending accession of new members, especially Ukraine.

And how much will governments intervene in the diet choices of consumers, on health and environment grounds? So far, there has been reluctance to move much beyond providing consumer information.

These are among the many questions making the next five years of EU agriculture hard to predict. And it will all be happening against an unpredictable background, as Russia’s brutal invasion of Ukraine continues to drive EU decisions, along with the geo-political need to address China’s growing power, while conflicts in the Middle East and Africa contribute to migration pressures, and adapting to climate change remains a priority.