ZEW Economist Friedrich Heinemann on the EU Agricultural Policy Reform

EU Member States have agreed on a reform of the Common Agricultural Policy (CAP). After almost two days of negotiations, the Member States have approved a compromise proposal made by the German presidency of the Council of the EU. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter.

“The compromise on a new CAP for the next seven years is a bitter disappointment. 240 billion euros will be paid over the next seven years to farmers and agricultural enterprises who are often already financially well-off, without the need for them to make significantly greater contributions to the climate, environment and animal welfare. The vaguely formulated eco-schemes play far too small a role in the allocation of funds. On top of that, the details have been left to the Member States themselves. This will lead to a race to the bottom in ecological standards. As a result, EU agricultural policy and its climate and environmental alignment have become a casualty of the COVID-19 pandemic. As the EU’s budget is now seemingly awash with money because of this pandemic, there appears to be no reason in the eyes of the parties involved to prioritise and adhere to European added value.”