LFA Review - Proposals Becoming Clearer?

The Commission is expected to present its plans for the future of the Less Favoured Area (LFA) measure in a Communication due to be published in April 2009. An oral statement provided by a senior Commission official to the UK House of Lords Select Committee on the European Union provides further information on the likely content of the proposal.

Since the launch of a public consultation on the future of the 'Intermediate LFAs' (i.e. non-mountain LFAs) in May 2008, there has been a lot of behind the scenes activity within the Commission and in consultation with the Member States to develop a proposal that responds to the tweaked objectives for the measure, as presented in the most recent rural development Regulation (Regulation 1698/2005). According to this Regulation, areas other than mountain areas must be ‘affected by significant natural handicaps, notably a low soil productivity or poor climate conditions and where maintaining extensive farming activity is important for the management of the land’. This suggested that classification criteria relating to soil productivity and climate conditions would replace socio-economic criteria, such as a low population, clearly setting a new direction for the LFA scheme. The consultation document presented four options: a variation on the status quo; a delimitation based on common biophysical criteria (and again as a third option with a bolt on of refined eligibility criteria); and an approach that also takes into account of areas of HNV farmland.

According to the oral evidence (available here), provided by the Commission official as part of the House of Lord's own inquiry into the revision of the less favoured areas scheme, 'the result of the consultation process [involving bilateral meetings with Member States] is in favour of maintaining the existing system, but I think this is not really an option which we think we can seriously follow up.'

The option to be put forward by the Commission would seem to rest on the delimitation of common biophysical criteria. According to the Commission official, the Commission's research arm, the Joint Research Centre, has, at the request of the Commission, attempted to define a common framework for soil and climate criteria. This has led to the identification of two climatic and four soil criteria. The climate criteria include low temperature and heat stress, and the soil indicators include stoniness (no others were specified by the Commission official). Each criteria has a threshold attached to it which indicates that a significant natural handicap is present.

An assessment of the impact these criteria would have on the area of LFA has been carried out by the Commission 'on quite a rough level' at the EU level. Therefore it is likely that the April Communication will include a request for Member States to use their own data to perform a more detailed impact analysis in order to produce 'concrete mapping results'. Understanding the likely changes in area is key to reaching political agreement among the Member States. The Commission official recognises this, stating that 'this technical exercise of delimitation carries a lot of policy difficulties. If an area is in or out, that is an important question for an area and we are aware of that.'

The Commission also appears to be developing proposals to tighten up the principles behind scheme eligibility criteria, which are used to determine which farmers within an area delimited as LFA qualify for support provided by the LFA measure. The Commission official stated that there are currently over 150 different eligibility criteria in place, and that 'a number are not WTO compatible because they simply exclude certain production sectors or certain precisely defined agricultural activities from support'. This would mean for example, not unfairly excluding part-time farmers. The Commission official underlined that the classification criteria and the eligibility criteria combined should be used to meet the objectives of the measure - to 'support extensive farming where it is necessary and where it contributes to maintaining the countryside'.

It is possible that the Member States will have up to six months to input into the impact assessment. Member States are therefore unlikely to be in a position to reach political agreement until the end of the year. New schemes are therefore not likely to be operable within the Member States until some time after the original January 2010 deadline. This delay will mean that the Member States will need to revise their rural development programmes not long after the broader revision that is required in order to direct the additional funds raised through increased compulsory modulation to measures suitable for addressing the ‘new challenges’.

  • It should be noted that the information presented above is based on a transcript that is not yet an approved formal record of the proceedings. Neither Members of the House of Lords nor the officials of the European Commission that were present have had the opportunity to correct the record.

PUBLICATION DATE

18 Feb 2009

AUTHOR

IEEP

FURTHER INFORMATION

The Institute for European Environmental Policy coordinates CAP2020. It is an independent not for profit institute which undertakes research in a number of policy areas including agriculture and rural development.


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