Category Archives: Group 3

Controversial new payment scheme for Europe’s farming future

Banner for the CAP Reform in Brussels, far removed from the farms it will affect.

The introduction of greening payments to the Common Agricultural Policy (CAP) is a new and controversial proposal set to change farming in Europe, but only if it can survive the political process.

By Kate Elphinstone

30 euro cents a day is given by every European citizen to their farmers to ensure food is on their table each night. That money is now under debate, as the reform of the CAP (Common Agricultural Policy) begins.

A new proposal introduced in October dictates that taxpayers money will be used to fund a new ‘green’ level of payment, ambitiously aimed at making every single farmer in the EU produce in an environmentally friendly manner.

It is proving to be the most controversial addition to the large reform process, with many member states disputing the large allocation of 30% of the funds to a greening payment.

“It is under heavy attack at this stage both in the Council and, unfortunately, in the European Parliament as well,” said Mr Bas Eickhout, member of the Greens and the European Free Alliance and also a Member of the Committee on Environment, Public Health and Food Safety.

Greener Farming for a Greener Future

The payments are a completely new addition to the CAP. Its aim is to ensure that EU farmers will be supported when changing to climate focused farming practices.

According to a report by the European Commission in October, the payments are considered absolutely necessary to support farmers in adopting and maintaining environmental practices. As it stands, farmers cannot rely on market prices to support this change.

“Our whole concept is that all farmers should participate in the greening scheme, because if every farmer does a little bit more then we will have a significant effect en masse,” said spokesperson to the agricultural commissioner Roger Waite.

An incentive for reform is to meet the climate targets of the Europe 2020 agenda, aimed at increasing sustainable practices. Farmers will need to be supported in changing their practices to meet environmental standards otherwise it is expected that the climate targets will not be met.

“Our objectives for the CAP are environmental. We think we have a complete set of renewed measures and we count on the ballot and the council to keep them on board so we have enough funding,” said Myrium Driessen, policy co-ordinator on climate change for agricultural aspects of EU policies at at public conference regarding the proposal.

Myriam Driessen speaks at a public conference on the 10th November organised by the Greens/EFA to bing together experts to debate the Greening proposals of the CAP

Working together

However, achieving a greener farming future depends on agreement between agricultural ministers and MEPs. These reforms are the largest co-decision ever undertaken between the parliament and the commission.

At a public debate on the 8th November, European Parliament President Jerzy Buzek explained that MEPs and agriculture ministers “will have to find solutions that strike a balance among all farmers in 27 Member States, big and small farms, central and remote areas”.

Farming practices are not a cohesive endeavor among all the member states, who are divided by their national interests. Non-agreement among member states will prove the greatest threat to the proposal. While the 30% stipend will not be removed completely from the reforms, it could be drastically lowered.

Debate on the need to ‘Green’

Many MEPs and ministers voiced concern over the 30% figure set for greening payments at a public debate on the 8th of November, indicating a belief that it is unfeasible. Current world problems are clouding support for the greening proposal.

“Environmental measures do matter, but 30% is too much”, noted Bulgarian Minister Miroslav Naydenov at the debate.

Food security and competiveness in the global market are being used by MEPs to dispute the large allocation of funds to green farming.  Valentin Zahrnt from the European Centre for International Political Economy (ECIPE) disputes concerns of food security in the EU.

“In any case, short-term food security is not endangered in the EU. If food security should be of concern to policymakers, the focus should be on 2050 and beyond,” said Mr Zahrnt in a report from 2011.

Mr Bas Eickhout hopes that the ongoing debates will not lose sight of why the CAP needs to be reformed.

“Why we are doing this is becoming very, very important. Besides the Euro crisis, we are having a lot of crisis on climate and resource uses and I think addressing those with the public budget of the EU is very crucial,” said Mr Eckhart.

Support Essential to Success

The introduction of greening payments requires a re-organising of direct payments, causing concern that the already complicated CAP will increase in difficulty.

“Practical, easy to implement measures will work best for farmers and for European authorities. To encourage the next generation of farmers; there should not be any administrative burden linked to the greening measures or high extra costs,” President Joris Baecke from the European Council of Young Farmers (CEJA) said.

Support for the farmers to implement the changes is another important element for success.

“If farmers simply go through a pro formo take up of measures the outcomes are worse for biodiversity and climate. We welcome a farm advisory system,” said David Baldock Executive Director Institute for the European Environmental Policy (IEEP).

A Farmer's Market in Nice, France. The aim is for every farmer in the EU to farm sustainably.

The Need for Knowledge

“People still need to learn more. There is still a lot of mis-understanding. The benefits will only occur if this is well implemented,” said Faustine Defozzez, policy officer of agriculture and bioenergy at the European Environmental Bureau (EEB).

The three main areas of environmental focus for farmers to be eligible for payments are crop diversification, permanent grasslands and ‘ecological focus’ areas.

Mrs Myriam Driessen, policy co-ordinator for agricultural aspects of EU policies, can see areas where the policy could fall short, unless enough support is given.

“We have to feed more and more people and all our studies are showing that prices of cereals will increase. That’s good for crop producers. (So) Keeping grasslands and not producing arable crops when the prices of arable crops are growing, farmers have an interest to plough up (fields) for their income.”

Effective Implementation

In order for it to be effective all of the member states have to agree on the measures and implement them accordingly. Environmental groups fear that unless it is strictly implemented, the money will be wasted.

“We have to have incentives which are balanced by suitable safeguards. It will be important for the commission to scrutinize member states. We can’t deliver climate sensitive agriculture without some finely tuned implements,” said David Baldock.

With 47% of the EUs budget dedicated to the CAP, the use of taxpayers money is under enormous scrutiny.

“If there is not serious greening, there is no justification for the money to be given,” said Faustine Defozzez.

“There are clear benefits for the climate but they have to be seen in a package mandatory for all the farmers in the EU.”

The voice of the farmers and stakeholders will be heard at debates scheduled for December.

Cautious optimism for EU energy future; controversial shale gas could play a role

EPP hearing stresses importance of natural gas in solving European energy problems

By Robert Cote


(Wikimedia Commons) A shale gas operation in Wyoming, America. The spokesperson for the Commissioner for Environment says the controversial energy source is subject, in Europe, to the same protections as oil drilling.

Thursday’s European People’s Party hearing on the future of Europe’s energy supply ended on a fairly positive note, with Vice-President of the European Parliament Alejo Vidal-Quadras noting he was left feeling “optimistic” about Europe’s future. He did, however, offer suggestions on where Europe needed to put in some work.

“Energy can be an instrument of co-operation with other partners and friends,” Vidal-Quadras said, adding “Diversification of routes and sources is a priority.”

Echoing that idea was Poland’s Marcin Korolec, there in his capacity as Secretary of State for the Ministry of Economy.

“I hope we will soon stop discussing theory and start discussing expedience,” said Korolec. Korolec did not, however, share the same happy sentiments regarding the future of European Union energy policy.

The hearing delved into the various projects –primarily natural gas- that were being planned to meet Europes’s growing energy needs. A lack of a cohesive, Europe-wide policy was blamed by many speakers, including Korolec, for getting Europe a raw deal in trade, and for slowing down the progress of the European Union.

“It is almost embarrassing that a body like the EU struggles with energy policy,” Korolec said. “We could find ourselves fighting energy poverty, our proud industry forgotten,” he added, to applause.

The loudest ovation of the day, however, went to Professor Alan Riley, of City University in London. Pointing out huge increases in shale gas production in both America and China –both of which, Riley says, are projected to take over the one and two spots on the list of natural gas exporters-, Riley said the increasing fluidity in the market presented Europe with a huge bargaining advantage over Russia, now the leading global supplier.

“There is an enormous amount of shale gas around the planet. China is talking about 100 trillion cubic meters of gas. We will have to ask Russia, do you want to be a marginal supplier, or a major partner in Europe’s gas market?” said Riley.

The hearing concluded with an emphasis on the completed Nordstream pipeline from Russia to Germany, and discussions of the planned “Southstream” pipeline into Italy, and how it was important to put up a unified front on the supra-national level in order to get the best deal for Europe.

Quadras concluded his portion of the hearing by saying “We import 60% of gas, 80% of oil. We cannot ignore this. We must ensure there is coherence in external energy policy.”

Shale Gas

Despite a heavy Polish representation and a lengthy segment by Professor Riley devoted entirely to the subject at the hearing, the issue of shale gas and hydraulic fracturing was only barely glossed over, discussed only in terms of economic feasibility and environmental benefit.

“If you increase the load-bearing factor of gas power plants… to 70%…You’re talking about a 25-30% reduction of CO2 emissions,” said Riley, explaining that would allow the equivalent number of coal-powered stations to go offline. In tonnes, that amount would translate to over 250 million tonnes of CO2 annually, helping the EU on its course to reduce greenhouse gas emissions by 20% by 2020.

While the emissions of natural gas are known to be far less than those of fossil fuels, opponents of the shale gas industry nonetheless believe it to be far too dangerous to be used as a source of energy. Groups like American Rivers and Greenpeace, as well as the 2009 documentary “Gasland,” have been highly critical of the shale gas industry, pointing to possible chemical spills and contaminations of the water table as being evidence that pursuing shale gas as a resource is unsafe for those people who live in close proximity to hydraulic fracturing –the technique used to get at the gas locked in the shale

rock- operations.

Though Greenpeace was unable to respond by deadline, an information page on the American branch’s website stated “At least 260 chemicals are known to be present in around 197 products and some of these are known to be toxic, carcinogenic and mutagenic. These chemicals can contaminate groundwater due to failure of the integrity of the well bore and migration of contaminants through subsurface pathways.” This, combined with concerns with air and noise pollution, water waste, and the destruction of habitats of wildlife, has put Greenpeace squarely in opposition to the pursuit of shale gas.


Joseph Hennon, spokesperson for European Comissioner for the Environment Janez Potocnik, says the discussion is a very emotional one; however, environmental standards apply to hydraulic fracturing just as much as they do to drilling for oil.

“It may be a new source of energy, but… it’s covered by the health and safety regulations, by the environment regulations and by the liability regulations. From our point of view, we’re looking at how it’s going,” said Hennon. He added, “We have no business stopping member states from exploring new sources of energy, and we’re a long way off from having [European] shale gas on the market.”

Hennon points to the REACH legislation and the protections it affords as reasons hydraulic fracturing would be better controlled in Europe than in America. As to reports from the American government and from Cuadrilla, which is involved in the hydraulic fracturing operations in the UK, Hennon was unable to comment.

“It’s so new. Is it worth it? We’ll see, I guess,” Hennon said.

EU disagreement blurs future for Danish associations

In Denmark, non-profit organisations such as sports associations and NGOs are exempt from paying VAT (Value-Added Tax). The European Commission is disputing this right and has initiated proceedings against the Danish state for breaking the laws of competition. Meanwhile the European Parliament wants the Danish model formalised in the whole of the EU
By Daniel Ortved

“Every time we use one kroner on administration we lose one kroner for sports-related activities,” says Anni Jensen, head chairwoman of the sports association Galten FS (GFS), west of Aarhus. She is worried about a possible future where her association would have to pay Value-Added Tax (VAT) on the same terms as a company.

GFS covers an area with around 10.000 inhabitants, of which 2000 are members. It is a typical nuclear family area with a lot of children, so the sports association plays an important part in the local society. The existence of GFS is based on membership fees.

GFS has saved money through arranging different events, such as the annual city town fair. That extra money would be heavily reduced, if the Commission gets its will and Denmark adjusts to the common European rules on VAT.

“But we still want to do an effort to raise further money, because there has to be something to use for fun things. For instance, we opened a fitness centre one year ago, which we had saved up for during some years to be able to establish. Opportunities like that would be heavily reduced,” says Anni Jensen.

Wants exemption to be common
A long way from her association west of Aarhus, the Commission in the EU is preparing a thorough reform of the VAT-directive. Meanwhile, back in 2008, the Commission started proceedings against Denmark and other EU member states for exempting non-profit organisations such as NGOs, charitable organisations and sports organisations from paying VAT.

Those proceedings have not yet developed into a court case, but the public debates on the matter in Denmark have made Danish members of the European Parliament (MEPs) work to implement the Danish model, which has existed since 2002, into the current VAT-legislation in the EU.

Recently, an initiative report “on the future of VAT” was carried through with a huge majority in the European Parliament. Danish MEP Dan Jørgensen (Social Democrat) wants the exemption of non-profit organisations from paying VAT to be extended to the whole of the EU.

“What we do [in Denmark] is the right thing, and it should be legal in all of Europe. I am not entirely sure what goes on in other countries, but I am sure that it will be a positive thing for them also,” says the Danish MEP. The initiative report is only a recommendation for the Commission. They will use it later this year when they look to reform the current VAT-legislation. Dan Jørgensen feels sure that it will go through.

“I cannot be sure, as the initiative report does not have a legal status. We had a majority in the parliament and usually the Commission chooses to listen to this. Only if the Council turns against it I think we could have a situation where we would not win,” he explains.

The European Parliament, located in Brussels, Belgium, consists of 736 members from 27 member states. Dan Jørgensen (Social Democrats) where among the majority who voted in favour of the initiative report.

A day to pay might still come
Robert Hinnerskov is the general secretary of ISOBRO, a Danish organisation that works for the conditions of Danish NGOs and other non-profit organisations. He does not agree with Dan Jørgensen’s optimism.

“It is my point of view that, unfortunately, there is no background for this way of putting it. We are dealing with a recommendation, which is put forward on a very early stage in a legislation process on a complicated question where there are a lot of contradictive points of views,” he says, referring to that the Commission and the Parliament seems to disagree on this matter.

“It will make the political process difficult. I fear that other considerations, than those in favour of the non-profit organisations, might call upon attention because of this,” he says.

Making and changing EU legislation can take a long time, and Robert Hinnerskov thinks a verdict in an eventual court case between Denmark and the Commission could come even before a reform of the VAT-directive is reality. If that is so, the Commission would be able to force Denmark to change its rules.

“The associations and organisations that are today exempt from paying VAT, should therefore still consider that a day might come where the exemption is gone and the economical realities therefore will change radically,” says Robert Hinnerskov.

Commissioner for "Customs and Tax", Algirdas Semeta, wants to streamline the VAT-policy in EU, so companies as well as non-profit organisations pay their share

Commission and Parliament far from agree
On the 13th of October, the European Parliament handed over their initiative report “on the future of VAT” to the Lithuanian Commissioner Algirdas Semeta. The Parliament and the Commissioner disagreed when it came to the question about VAT exemption.

“There is a lot of different ways of using the VAT system in the EU, and that hinders maximum potential of the inner market. If we should proceed, we have to leave the comfort zone of business as usual, and some member states might have to jump over their own shadow,” said Algirdas Semeta.

One of the many MEPs who took the chance to comment on the VAT exempt problem in the plenary was Finnish Carl Haglund (Swedish minority party, Svenska Folkpartiet).

“I think there is a clear majority in this house that would be against that, so I hope the Commission will not pursue it,” he said, referring to the Commissioners wish to get Denmark, Finland, Sweden and other EU member states back on the European VAT-track. He also pointed out that 2011 is the European Year of Volunteering and it would be contradictive to enforce non-profit associations to pay VAT.

MEP Carl Haglund from Finland is a member of the Liberal and Democrat's Group in the Parliament. In June 2008 Finland was asked to account for the fact that their VAT exemptions assumingly were not consistent with the directive from the EU

Expert wants level-headedness
But not everyone agrees with the level of severeness, some media and politicians have foreseen as the consequences of the Commissioner getting his will.

Bjarne Ibsen, professor at the Institute for Movement, Sports and Society, Southern Danish University, does not look on the dark side regarding the consequences of an eventual removal of the VAT exempt in Denmark. He says the non-profit organisations plays an important role both in terms of strengthening democratic values as well as filling out concrete and important functions in society. He thinks, however, that they would survive being obliged to pay VAT.

“Membership fees in the types of associations are usually very low. I will not reject that it could have an influence on the numbers of members. My point is that it would have an effect but not as drastic as it has formerly been said,” he says. He does admit, though, that it would have an effect for those associations looking for a turnout.

“The associations, acting on a market, hosting town fairs and fun runs, will lose their advantage, and the average user will not be able to see a difference in the price. But then again you can ask the question: is it fair to act as a “for profit”-association without paying VAT?”

The administration would become the burden
Anni Jensen, chairwoman at GFS, does not agree. Forcing the non-profit organisations to pay VAT would be a heavy burden, she says.

“In principle, we are economically ready for it. I do not think, though, that we would be able to find a volunteer treasurer that would be able to take charge of a VAT account as well. VAT gives an extra administrative burden. I fear we would have to employ a corporate treasurer. Professional help on this matter would be extremely expensive,” she says.