What are Catalan farmers gambling on in the new European budget?

BrusselsNegotiations have begun to define what the new Common Agricultural Policy (CAP) of the European Union should be like, a vital policy for the agricultural and livestock sector in the country. The Agriculture Ministers of the Twenty-seven debated this Monday the first lines of work outlined by the European Commission for the new CAP. The reform, however, proposes fewer resources and more margin for the states to decide how to distribute them. In Catalonia, the sector views the proposal with concern because it fears that this flexibility will end up cutting aid and generating inequalities between territories.

The impact of the reform could be especially relevant in our country, since eight out of every ten farmers and ranchers in Catalonia benefit from these subsidies, according to the latest data from the Agri-food, Rural and Environmental Observatory. The most dependent sectors are cereal crops, stone fruit, nuts, and extensive livestock farming, in addition to dryland sectors such as olive trees and vineyards. These agricultural and livestock areas base a significant part of their economic viability on direct aid and EU rural development funds, unlike other more intensive sectors (such as industrial pork), which are not as dependent on subsidies.

The discussion, which is still in an initial stage, will depend above all on the money that ends up being allocated to the CAP in the next community budget. This will be determined in the so-called Multiannual Financial Framework, which sets the EU spending limits for a seven-year period (2028–2034). And it is here that a good part of the agricultural budget is at stake. With the current geopolitical context, some European capitals –starting with Berlin– are calling for more resources to be allocated to items such as defense and industry, to the detriment of the CAP item. This means that, from the outset, the amount allocated to agricultural policy is expected to be lower.

To compensate for the reduction in the CAP item and satisfy the partners in favor of a more generous agricultural policy (such as France, Spain, Italy, or Poland), Brussels proposes to shield at least 300 billion euros for direct aid to farmers and reserve a minimum of 10% of the funds from national plans for rural areas. It maintains that, with this system, the volume of resources available to the sector will be equivalent.

"This financial framework makes us suffer a lot because 20-22% of the funds going to the Common Agricultural Policy will depend on it," asserts Jaume Bernis to l'ARA, member of the JARC-COAC executive and advisor to the European Economic and Social Committee. At Unió de Pagesos, they share the same concern. "Faced with the increase in environmental requirements, international treaties with third countries that put pressure on livestock companies, and climatic adversities such as drought, we need a strong agricultural policy," argues its national coordinator, Raquel Serrat.

Unió de Pagesos, in fact, criticizes that cuts are being planned precisely now, when producers are "against the ropes" due to rising fuel prices. Serrat maintains that the increase in production costs, the historic drought, the abuses by intermediaries, and inflation have pushed the sector to the limit. "If we depend on imports, food can become a weapon of war," she concludes.

A more national CAP

The major change proposed by the new proposal is to integrate all funds allocated to the sector into a single pot. Until now, the CAP had two pillars of aid: direct payments to farmers (funded 100% by the EU) and a fund for rural development (co-financed between the EU and the regions or states). The proposal currently under discussion suggests grouping everything into a single fund that each member state receives, and that each national government decides how to distribute the funds.

This measure, which aims to streamline procedures and reduce bureaucracy, also arouses suspicion. JARC fears that this new system will lead to "more inequalities" and competition between the territories of the European Union itself, as it would allow each member state to exhaust the maximum margin allowed for national contributions, and favor countries with greater fiscal capacity. Bernis is "totally against" a process of renationalization of aid and warns that the management of the CAP will no longer have the clear framework offered by the direct control of the European Commission and will instead depend on the priorities of the Spanish government. "We will depend on Madrid when it comes to deciding where and how the money is prioritized," he warns.

The Spanish government itself shares the fear that the new system could lead to a renationalization of the CAP. Spain advocates for a more flexible agricultural policy, but that this should not turn into 27 different agricultural policies. The Minister of Agriculture, Luis Planas, has warned that there is still time to negotiate: "Nothing is closed in the CAP regulation," he assured at the entrance to the Council.

Another point of discussion is who the aid is intended for. In this area, agricultural unions argue that the beneficiaries of the CAP must be active farmers, that is, those whose income comes directly from agricultural production. Thus, JARC argues that subsidies cannot be "a supplement for a bad retirement."

Finally, the Brussels initiative proposes establishing a maximum cap of 100,000 euros per year in aid that each producer can receive. In this case, the measure would affect Catalonia less than other European territories, according to Bernis, because the Catalan model is made up mostly of small and medium-sized farms.