Perhaps most importantly, the CAP was not a sticking point within Doha agricultural negotiations, as its payment system had been brought into compliance with WTO rules. In the 1992 reform, MacSharry was able to advocate for and achieve systemic CAP reform by connecting the reform to the GATT Uruguay Round negotiations. If the CAP was not reformed, he argued, the GATT would fail, the CAP would be blamed, and external actors would force drastic and unpleasant changes upon the CAP. This argument was credible because it was widely known that agriculture was the reason for the delay in concluding the round and that European agriculture, and CAP policy in particular, was the source of the impasse in agricultural negotiations. Cioloș simply did not have the same opening to call for far-reaching reform because the CAP, thanks to MacSharry, and later Fischler, was comfortably in compliance with WTO policy. Another potential disruption was EU budgetary policy. The 2013 CAP reform occurred at the same time as negotiations over the new Multi-annual Financial Framework ,plant pot with drainage known colloquially as the EU budget. While the 2013 reform was not the first time MFF negotiations coincided with CAP reform, it was the first time they occurred simultaneous to CAP reform under the rules of co-decision.
Unlike past CAP reforms, then, the EP and the European Council refused to move forward with CAP reform discussion until the budget was fixed. These negotiations could have been just the sort of disruptive event that strengthened the Commission’s hand. Indeed, the Commission had called out the CAP, saying that future reform “must stimulate a further significant reduction in the overall share of the EU budget devoted to agriculture, freeing up space for new EU priorities” . These growth priorities included: “innovation, the digital economy, employment, youth, industrial policy, poverty, and resource efficiency” . The Commission’s proposal for the MFF included a small decrease in real terms but a small increase in nominal terms for the CAP budget over the period of 2014-2020. Maintaining the CAP budget, even if only in nominal terms, was an important victory for farmers as the financial crisis meant there was a real need for budgetary austerity at all levels of government and across virtually all sectors . The Commission’s surprising support for agricultural spending stemmed from the priority given to fixing the payment imbalances. Had the Commission proposed to shrink the CAP budget while also demanding that old member states shift money to the new member states, the member states would never have gone along. The resulting MFF agreement made retrenchment more difficult, however.
Once the MFF was agreed to in February 2013, and thus the CAP budget set, reformers could not threaten to reduce the budget if their proposals were not accepted. Indeed, the status-quo-oriented actors relied on the argument that the scale of greening preferred by reformers was simply not possible without a larger CAP budget and therefore could not be adopted . Thus the concurrence of MFF negotiations and the delaying effect it brought to the CAP discussions supported the member states and other actors who favored the status quo. In the end, the Commission would not only fail to cut the CAP budget to support innovation but would redirect some €2.8 billion from growth programs to a reserve crisis fund for agriculture. In sum, almost all of the major events and issues that disrupt politics and allow for far reaching change did not operate during the 2013 reform. Economic crisis did not provide a consensus for change, instead reinforcing defenders of farmer interests. Previous reforms had brought the CAP into WTO compliance, eliminating stalled trade talks as a prod to reform. Enlargement provided the only source of disruption for Cioloș to exploit. Making the case for reform and retrenchment even harder, reformers could not threaten to cut the budget if their proposals were not accepted, as a new multi-year budget had just been set. As a result, Cioloș was forced to negotiate his reform largely under politics as usual. The importance of disruptive politics for reform is illustrated by the case of the 2013 CAP reform, when the only significant change in this reform, the adjustment to the payment system, had a clear link to the only source of disruptive politics.
The centerpiece of the proposal was a revision to the operation of the direct income payment system. It was intended to reduce the disparity in the distribution of payments both between the member states and among the farmers within each individual country . This approach, adjusting an existing policy to correct for inefficiencies and inequalities in outcome instead of trying to create an entirely new program, is a clear example of the traditional social welfare state strategy of turning “vice into virtue”. Under the new proposal, existing methods32 for calculating direct payments would be replaced by a single, common program called the Basic Payment Scheme, or BPS. All member states would move toward a uniform payment per hectare, fixed either nationally or regionally. Whether the payment was fixed at the regional or national level, the important change is that a single method of calculation would be used to determine this payment, which would aid in reducing disparities both within and across countries. The assumption was that it would take time to close the gap in payments among the member states because, as the Commission acknowledged, the degree of redistribution needed between national direct payment envelopes was such that “it is likely to make it politically unacceptable for many member states to agree to such a redistribution”. Initial redistribution would be minimal, targeting those member states that were receiving less than 90% of the EU average payment per eligible hectare and would aim to close one-third of the gap between what member states had been receiving and 90% of the EU average per hectare payment . The second major component of the plan concerned the oft proposed and always defeated effort to cap CAP payments. The Commission proposed to cap payments under the BPS at €300,000 annually. In addition, the Commission called for the progressive reduction of payments, by 20% for the part from €150,000-€200,000, by 40% for the part from €200,000- €250,000, and by 70% for the part from €250,000-€300,000 . Additional payments received for greening would not count against these reductions, however. What is more, in an effort to reward farms with many employees, farmers would be allowed to deduct salaries, taxes,pots with drainage holes and social security contributions from their CAP payments before any reductions were applied33. The third major Commission proposal concerned greening and cross compliance. Under the proposal, the new BPS would still be linked to basic requirements concerning the environment and animal welfare, known as cross compliance. For purposes of simplification, the number of rules would be reduced. The new proposal also included another greening payment, which farmers would receive on top of their base payment per hectare. This greening component would require farmers to adhere to an “enhanced” form of cross compliance . Any farmer who wished to receive even the base BPS would be required to adhere to the rules for this “bonus” greening payment. Specifically, this initiative was intended to be a way to forcibly apply stricter greening and environmental standards to farmers. Those certified as organic and small farmers would be exempt from these requirements. The payment was thus not truly a bonus payment but rather a set of mandatory greening standards that must be met to receive the BPS. For their trouble, farmers would be given an additional greening payment award for meeting these now required standard. This payment was a way for the CAP to impose more basic greening requirements into Pillar 1, which had long been a goal of the most environmentally concerned.
Two other smaller components of the reform covered rural development and definitions of who counted as a farmer. The rural development component sought to provide greater flexibility to the member states for providing resources to farmers, particularly in the area of risk management by giving member states more autonomy in deciding where to allocate resources and emphasis among the three broad objectives of fostering competitiveness, protecting the environment, and improving the diversity and quality of life in rural areas. The rural development proposal also addressed the broader concerns about internal and external convergence by proposing that member states be allowed to move 10% of their Pillar I funds to Pillar II while member states whose direct payments were below 90% of the EU average would be allowed to move 5% of funds from Pillar II to Pillar I. The farmer definition proposal aimed to exclude payments to those individuals who no longer engaged in real, tangible, agricultural activities. For example, it is not uncommon for some farmers to turn their land into resorts, golf courses, sports clubs, or even airports. Under the Commission’s proposal, those individuals who failed to meet minimum activity standards or those farmers for whom CAP payments amounted to less than 5% of their total receipts for non-agricultural activities would no longer be defined as active farmers, thus losing benefit eligibility.The initial reaction from French officials to the proposal was lukewarm at best, and patently negative at worst. Among France’s most important preferences and priorities for the CAP were: preserving as large of a CAP budget as possible, retaining a large first pillar , maintaining the current allocation of subsidies among member states, and increasing the amount of support for ailing sectors and for risk and crisis management more broadly . On the issue of working to re-allocate income support funds among the member states, French Minister of Agriculture Bruno Le Maire suggested that this reallocation must be sustainable and fair. For Le Maire, reallocation could be, at most, only marginal, as more substantial redistribution would affect some farmers and member states disproportionately, which, for Le Maire, was unfair. On the matter of greening, while Le Maire confirmed France’s support for the principle in general, he argued that greening initiatives must be both simplified and developed and adopted with the economic realities of the farmer in mind . In other words, the initiatives could not impose financial costs on farmers. Such restrictions would severely limit the range of possible greening initiatives that could be adopted. Germany’s position on CAP reform was conservative, even more so than France’s. Like France, Germany favored maintaining a strong first pillar continuing the current allocation of icome payments among the member states, supporting safety net subsidies, and simplifying the CAP . As a major net contributor to the overall EU budget, the German government opposed reforms that would increase CAP spending. Denmark, the Netherlands, Sweden, and the UK formed a block of member states that supported CAP reform, particularly in a market-liberalizing direction. They preferred reforms that would cut prices and offer limited, if any compensation. The UK and the Netherlands also supported budgetary discipline. The Eastern European member states, led by Poland, wanted as large a CAP budget as possible. Like most of the other member states, they preferred a strong first pillar. However, they supported the redistribution of these funds among the member states to correct existing imbalances. They were opposed to measures and programs that relied on co-financing or that included nationally funded top-ups since they lacked the money for such initiatives. . In addition, given that Eastern Europe was already lagging behind the West in terms of distribution of direct payments and that several of these new member states, most prominently Slovakia and the Czech Republic, were home to exceptionally large farms, these countries opposed any efforts to place a cap on direct payments. The Eastern European bloc wanted to protect the second pillar since they received a larger share than the older, Western member states. Finally, like the rest of the member states, the Eastern European countries expressed a preference for the simplification of CAP programs. This preference was particularly important for the Eastern member states as they had less efficient bureaucracies and more generally struggled to find the administrative capacity necessary to implement the CAP. The Eastern Europe bloc therefore focused most of its political capital on pushing for a system that would redistribute direct payments while opposing a hard upper limit on those payments .