Highlight some of the main ways in which the EU has tried to incorporate environmental objectives and concerns into the Common Agricultural Policy Environmental concerns now play a vital role in the EU and inappropriate agricultural practices have long since had an adverse impact on natural resources. However agriculture creates both a pressure on the environment and maintains cultural landscapes and semi- natural habitats and therefore creates both +ve and –ve externalities. The main concerns are: loss of biodiversity, decline in habitats and species, loss of landscape diversity and quality, water pollution, soil erosion, air pollution by GHGs and use of toxic substances. Therefore the CAP currently seeks to integrate environmental considerations into its rules so it an head off the risks of environmental degradation and develop agricultural practices that preserve the environment and safeguard the countryside..

The first signs of environmental concerns and integration into the CAP In the 70s there was a breakdown in the consensus over the role of agriculture in the countryside as its destructive impact, driven by intensification and high price supports, became increasingly evident. Land consolidation programs had resulted In the removal of hedgerows, erosion of semi-natural habitats and homogenization of habitats while pollution had become an ever increasing concern. The increasing awareness for the need for an environmentally friendlier agricultural policy was first acknowledged in the 1985 Green Book “Common Agricultural Perspective” and was taken up in Article 19 of the Agricultural Structure Regulation, however it remained optional and largely ignored. Early 90s saw an international focus on sustainability culminating in the Rio conference in 1992 and various national programs were implemented. In 1992 The Macsharry Reform introduced an accompanying measures to the CAP in the form of ‘cross compliance’ but it was not taken up by many. In 1999 agri-environment measures were incorporated into the Rural Development Regulation as part of Agenda 2000 and financed through the EAGGF Guarantee Section. In addition ‘cross compliance’ became compulsory and non compliance now results in the loss of direct payments or other penalties. Concept of ‘paid stewardship’

NOW: Environmental concerns are implemented into the reformed CAP which aims at overcoming the negative externalities associated with production and income support in Pillar 1 and to support the positive environmental goods and services in Pillar 2. Pillar 1: Set-aside and cross compliance (add-on-objective) Pillar 2: Agri-environmental schemes and LFA payments (add on instruments) Pillar 1: requirements and incentives Set aside: since the Macsharry Reform larger arable farmers are required to set-aside land in order to be eligible for payments. This was not originally intended to be for environmental benefit but a supply control measures, however it has positive effects on flora and forna. – Can lead to land being left redundant and increase the risk of soil erosion and leaching of nutrients. – Intensification may increase elsewhere due to scarcer land. – Commission now proposes its abolishment in times of rising demand. Cross Compliance under the SPS: refers to the linking of environmental conditions to agri support payments, farmers who do not comply with a set of pre-determined environmental guidelines risk forgoing payments from EU income support. E.g Animal welfare Decoupling: lower environmental stress as intensification decreases. Use of ‘national envelopes’

Pillar 2: RDR and environmental integration Agri-Environmental Schemes AIM: – To encourage farmers to protect and go beyond Good Farming Practice. – To reduced environmental risk associated with modern farming and preserve nature and cultivated landscapes. – Applied and targeted at locally appropriate farm management and address a large no. of environmental concerns. Farmers are paid for their losses incurred due to implementing such commitments and the reduced production they lead to. They are co-financed by the EU and MS with a contribution from the Community budget of 85% for Objective 1 areas and 60% in others. In 2002 approx. 25% of the total utilized agricultural area in the 15 MS was covered by agri- environmental contracts. From 2000 they became a compulsory component of the Rural Development Policy of MS, what measures used by MS and farmers remain optional. Only two members have chosen to significantly expand expenditure on agri-environment through use of modulation and take up is generally highly variable.

Measures include: Input reduction Organic farming Extensification of livestock Conversation of arable land to grassland and rotation measures Actions in areas of special biodiversity/ nature interest Farmed landscapes Water use reduction measures Upkeep of abandoned farmland and woodland Public access Problems with agri -environmental measures : – are farmers willing to take on the role of environmental stewards? – CEEC need to modernize and intensify production before they can show concern for the environment. – Vast increase in admin costs expected – Certain policy makers may use environmental payments as income support and will therefore need to be under greater surveillance. – WTO ‘proofing’

Further integration into agricultural policy Agriculture and biodiversity Biodiversity Action Plan for agriculture Agriculture and GMO’s-2002 plan for approval for release into environment, risk assessment and market replacement. Agriculture and Climate-2000 European Climate Change Programme to meet Kyoto protocol. Soil protection, pesticides, nitrates. The Future It has been suggested that environmental payments will be one of the few politically sustainable forms of government support to agriculture in the years ahead Agri-environment policy will become a more dominant part of the rural policy scene.