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TOP FIVE: DAFC’s political priorities for the European Parliament, spring 2019

The DAFC calls on the Danish government to seek the Commissioner position for the following five fields: agriculture, trade, health, climate and internal market. The DAFC calls on all candidates for the European Parliament election on 26th May to include European issues from these five topics in their election campaign.

A sufficient EU budget…

The Commission’s proposal for the EU’s next MFF reflects years of debate about eurozone expenses, migration and a defence union, education and research. At the same time, Brexit leaves the EU with an annual 12 billion euro budget gap. The Commission proposes “new money for new initiatives” and a partial compensation of the Brexit deficit by increasing national contributions from 1% to 1,1%. Germany, France and 21 other EU Member States support this, whilst Denmark, Sweden, Austria and the Netherlands still oppose.

The DAFC and the European agricultural organisation Copa & Cogeca support the Commission and the majority of EU Member States on the budget. We advise Denmark to seek real influence on the budget instead of using its negotiating capital opposing an inevitable increase in the national contribution.

Unfortunately, the Commission’s budget proposal foresees a reduction of 5% on current prices and 17% on fixed prices of the EU agriculture budget. At the same time, the proposed redistribution of direct payments in favour of countries with lower costs and lower climate requirements (external convergence) challenges the competitiveness of Danish farmers, who are currently set to experience direct payment cuts of 6% on fixed prices and 18% on current prices. Thus, farmers are asked to deliver more for less and the agriculture sector is set to pay twice for Brexit– first by possibly losing market access, and secondly by being subject to cuts to the Common Agricultural Policy (CAP). The DAFC believes this to be an unfair distribution of the Brexit burden.

…for a simplified CAP
Agriculture Commissioner Hogan’s proposal for a modernized and simplified CAP post 2020 envisages a higher degree of domestic policy implementation. Member States must draw up a domestic strategic plan that implements nine CAP policy objectives. It must happen within both CAP pillars: pillar 1, which consists of direct payments and the new eco-schemes, and pillar 2, which is the rural development policy. According to the DAFC, the objective must be for the EU agricultural
policy to support farmers' ability to produce sustainable agricultural commodities and food at competitive prices.

Globally, the DAFC supports Hogan’s proposal, as it aims at an increased simplification and flexibility for Member States. We see great potential in the new eco-schemes in pillar 1, which e.g. might be used in support of climate initiatives, and which can give the farmers an incentive payment – and thus ensure that farmers and society's interests are met. However, the proposal also contains a number of hurdles. It constitutes a threat and a distortion to competitiveness, were Member States to get the opportunity to move up to a third of their allocated direct payments from pillar 1 to pillar 2, whilst governments in other countries retain the right to move money in the opposite direction, which has happened in Poland. The DAFC therefore calls for this flexibility to be removed or limited. If this possibility remains, the funds transferred to the second pillar should at least be accompanied by mandatory national co-financing.

Hogan also proposes to introduce a farm payment ceiling of 100,000 euro. The DAFC is fundamentally opposed to capping, since we believe CAP payments not to be an income support, but a compensation for increased societal demands on food safety, environment and climate objectives. For the same reason, the DAFC opposes external convergence; it does not make sense to redistribute direct payments at the benefit of countries with lower costs and lower climate reduction targets and requirements.

A future agreement with the UK and an ambitious rules-based trade

The DAFC’s main priority in the Brexit negotiations is to ensure that the UK remains within the EU Customs Union and a part of the single market. This will ensure smooth trade and continued UK compliancy with EU standards. We share with our British and European counterparts in Copa & Cogeca the desire for common standards for food after Brexit, an ambitious future trade regime and avoiding a hard Brexit on 29th March.

In the case of a hard Brexit, a number of measures will have to be adopted immediately. The DAFC is actively involved in the implementation of the needed capacity in Danish ports, especially in the port of Esbjerg. A hard Brexit would be a significant challenge for the European market and could require a political intervention.

On the trade front, the DAFC wishes to maintain its focus on opening new markets, through the completion of the negotiations of an updated trade agreement with Mexico, the ratification of a free trade agreement with Vietnam and negotiations with countries in Southeast Asia and Oceania. In the event of a hard Brexit, an increased market access in other countries will be crucial for the Danish and European agriculture and food sectors.

In 2018, the international trade regime has been volatile. The introduction of tariffs on steel and aluminium by the US president has led to some tariff escalations. Such developments combined to the general political speech constitute a threat to an open and rules-based international trade policy. The Danish agriculture and food cluster has very significant export interests, including good trade relations with the US. The DAFC urges therefore to find concrete solutions that will enhance the
current state of affairs, e.g. possibly a new trade agreement between the EU and the US, as discussed by Presidents Trump and Juncker.

Necessary revision of the Water Framework Directive (WFD)

Following the election in 2019, the next Commission is expected to take a stance on the WFD. Climate change was not on the agenda when the WFD was adopted. Now, unfortunately, it needs to be adapted to a new reality. The DAFC is therefore working on a thorough revision of the WFD.

There is a need for more realistic, nuanced and contemporary objectives for the ecological state of EU waters that allow for sustainable activities, including sustainable intensive food production. And there is a need to be able to report in more detail on the evolution of the state of the EU water bodies than the current status classes allow, so that progress can be better recorded and recognized so that MS can witness the value for investment, abandoning the so-called “one-out-all-out” rule, which
results in progress not being recognized as long as one parameter in a series of measurements is not satisfactory.

A European research program, Horizon Europe, with a focus on food and agriculture
The Commission suggests in its MFF proposal to earmark 10 billion euro for research in food, agriculture, rural development and bioeconomy within Horizon Europe. This is a significant increase welcomed by the DAFC. A particular DAFC priority has been to make Horizon Europe support the UN’s SDGs on food and to promote enhanced interaction between the EU’s research and agriculture policies, and agriculture advisory services by means of the so called European Innovation Partnerships.

The DAFC calls on the European Parliament’s negotiators to maintain these advances in the forthcoming trialogues with the Council. Furthermore, the DAFC calls for Horizon Europe to support actions that help reduce greenhouse gas emissions from agriculture as well as climate change adaptation, support the development of alternative protein sources as replacements for soya, increase the degree of recirculation and improve general resource efficiency and sustainability. In this respect, research policy might underpin initiatives within the new eco-schemes in CAP pillar 1. Research policy can thus also support initiatives in the new eco-schemes in pillar 1 of the agricultural policy. Here too, L&F is positive towards the Parliament's current position, which supports these goals.

The DAFC holds answers to your questions

In addition to the five priorities presented above, the DAFC office in Brussels and our colleagues at Axelborg (our headquarters in Copenhagen) follow a number of ongoing cases. We keep, among other things, an eye on the important trialogues on the General Food Legislation and sustainable finance.
If you have questions concerning the above or other issues – technical or political – we are happy to help you obtain answers from expert colleagues at Axelborg, at SEGES in Aarhus or from our cooperative members.