On 10.11.20, the European Parliament, Commission and member states reached an agreement on the long-term EU budget (2021-2027) and the #NextGenerationEU initiative, aimed at stimulating recovery from the socio-economic crisis triggered by Covid-19. Measures being adopted represent the largest funding complex ever adopted in European history. Focus on rural development and grant making under the CAP.
EU Budget 2021-2027 and #NextGenerationEU
On 5/27/20, after the first wave of Covid-19 contagions, the European Commission proposed to the Parliament and Council to revise the draft budget 2021-2027. With a view to introducing an emergency instrument to deal with the immediate economic and social damage caused by the pandemic. In particular, the Commission introduced a proposal to add a Recovery Fund to the long-term budget forecast (1,074 billion euros for 2021-2027).
#Next Generation EU, this is the new name of the Recovery Fund, consists of €750 billion (including €390 billion in grants and €360 billion in loans)-to be raised on financial markets, without direct contributions from member states-allotted exclusively for crisis response and recovery measures. A total budget of 1.8 trillion euros is thus expected to help rebuild Europe.
Public investment, rural development
Green and digital transition as well as resilience are the key words on the agenda of a Europe trying to converge on greening and innovation goals, as also most recently seen in theEU Consumer Agenda 2020-2025. The bulk of #NextGenerationEU funding (>80%) is allocated to support public investment and structural reforms.
Rural development receives an additional allocation of 7.5 billion from the 78 billion already budgeted. From the perspective of greater support of farmers and rural communities, as well as the fishing sector. In line with the objectives defined in the European Green Deal and in particular the EU Farm to Fork (f2f) and Biodiversity Strategies. Member states will therefore have to specify how they intend to achieve the various objectives, in their Common Agricultural Policy (CAP) strategic plans, and ensure that their farmers meet all environmental and climate requirements.
European agricultural fund for rural development
The European Agricultural Fund for Rural Development, the second pillar of the Common Agricultural Policy (CAP), is one of the financial instruments that will benefit most from the new economic support instruments. With the additional cash, the Agricultural Fund will be able to count on an additional 10 billion euros to support investments to meet ecological transition goals.
Investments aimed at sustainable and digital economic recovery-executed by agricultural and food processing enterprises-can be financed through the Fund up to 75 percent of the costs incurred. The ceiling for start-up aid for young farmers is also increased, from 70 to 100 thousand euros.
Disbursement of contributions under the CAP
On 1.12.20 , the AGRI (Agriculture and Rural Development) Committee of the European Parliament gave the green light to cover the CAP, until the end of 2022, with funds from the 2021-27 EU budget and the #NextGenerationEU. Rapporteur Paolo De Castro, in response to lively criticism of the smoke-gray CAP reform, stresses that these funds are designed to stimulate recovery and ‘should not be used financial measures that represent business as usual.’ (1)
The use of these funds should therefore add value in terms of ‘sustainability,’ resilience and digitization. From words to deeds, the share of funding set aside for ‘sustainability and resilience’ (37 percent) is not reserved for organic farming alone, as would be logical to achieve the goals outlined in the EU Farm to fork (f2f) Strategy. Instead, this share is dispersed into unidentified ‘environmental and climate and animal welfare-related actions‘ with a high risk of greenwashing.
Dario Dongo and Silvia Giordanengo
Notes
(1) Ansa, 1.12.20. The text approved in the AGRI Committee goes to the plenary vote in Strasbourg on 14-17.12.20. However, the disbursement of funds is linked to the Council’s unanimous approval of the 2021-2027 EU budget. It therefore expects to overcome the blackmail of the Hungarian and Polish governments. Whose representatives opposed the provision of a human rights constraint
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Civil lawyer, master in Food, Law and Finance.
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