The resulting draft laws were voted on by the cabinet last Tuesday and still have to pass the Bundestag and the Bundesrat in May and June. In the following, NABU assesses the package from a nature conservation perspective.
The draft laws decisively determine how the six billion euros in annual agricultural subsidies will be spent between 2023 and 2027. From an environmental point of view, the so-called "green architecture" is crucial, i.e. the interplay of environmental requirements for all recipients of state funds (conditionality) and various forms of support for voluntary measures (eco-schemes of the First Pillar and the agri-environmental measures of the Second Pillar, AUCM).
In view of the dramatic damage to nature caused by intensive agriculture, much hope is being placed in the current reform. This hope is disappointed by the present legislation, despite some progress achieved by the Federal Environment Ministry and some federal states. In 2027, 60 percent of agricultural subsidies are still to be used for flat-rate area payments, although experts attest to their inefficiency, injustice and environmental damage. At the same time, the basic requirements and the money available for incentives are not sufficient to sustainably protect or restore biodiversity, water, soil, air and climate, as unanimously demanded by the EU Green Deal and the scientific community.
Conditionality is mandatory for all farms and a prerequisite for receiving agricultural subsidies from the state. It was decided that from 2023 onwards, farms must set aside three percent of their arable land as fallow land or landscape elements such as hedgerows, tree lines or marshes for nature conservation. In order for biodiversity to recover, a variety of habitats, feeding areas and refuges are needed, as well as a network between these elements - these structures must make up at least 10 percent of the farmland, including grassland and special crops. What is not regulated by conditionality must be done by voluntary incentives. However, it is unlikely that the missing 7 percent will be achieved through the latter, especially in regions with very productive agriculture.
In addition, grassland protection is regulated in the conditionality. Moorland and wetlands as well as grassland in Natura 2000 areas are to be preserved and may no longer be converted in future. This regulation is a step in the right direction, because the preservation of species-rich grassland is essential for biodiversity and climate protection reasons. Peatlands are among the largest emitters of greenhouse gases and should only be managed extensively and with high water levels. However, the draft law does not go far enough in this respect, as it does not contain any requirements regarding the type of management.
According to the draft legislation, the share of organic schemes is to account for 25 percent of the first pillar of the CAP, i.e. about 1 billion euros per year. Organic schemes are voluntary measures for farmers, but their design in the draft legislation will only be worked out in future regulations. And here the devil is in the detail - there is a risk of considerable watering down of the requirements. However, the eco-regulations can certainly be successful if they are elaborated in a sensible and ambitious manner from a nature conservation point of view. A regulation that requires the agreement of the Federal Environment Ministry on the ordinances is therefore to be welcomed.
However, it is not only the content that is important. The amount of subsidies also plays a central role in whether the programmes are accepted by farmers. In order to make the organic schemes effective and attractive, NABU believes that at least 30 percent should be set here from 2023, as the European Parliament is also calling for in the ongoing negotiations in Brussels. It is therefore quite possible that Germany will have to make improvements here.
The third environmental instrument of the CAP is the agri-environment-climate measures (AECM) in the second pillar. The financial resources for these measures are far from sufficient, as the Second Pillar accounts for only 18% of the total CAP budget. However, there is the possibility of reallocating funds from the First Pillar. According to the new draft legislation, reallocation is to amount to ten percent from 2023 and increase to 15 percent over the course of the funding period. NABU welcomes the fact that, in contrast to recent years, a start has finally been made on increasing reallocation.
In view of the great need for funds to reward nature conservation measures in agriculture (according to NABU calculations, the Second Pillar would have to provide around one billion euros per year for this, which alone would correspond to a reallocation of 18.5%), the government's plans are far from sufficient. It is not clear whether the reallocated funds would actually benefit biodiversity: Organic farming, animal welfare and many rural development measures are also to be paid for from the Second Pillar. NABU therefore calls for a reallocation of 20 percent to begin as early as 2023 and to be increased to 25 percent by the end of the funding period.
No planning certainty for necessary phase-out
Another major shortcoming in the draft legislation is that no planning certainty is specified for the necessary phase-out of flat-rate area payments (direct payments). It can be assumed that these will be abolished quickly after 2027, in view of smaller public budgets and dwindling acceptance for these unfair and ineffective watering-can payments. The shift to the Second Pillar (15% in 2026) and the conversion of 25% of the remaining First Pillar to organic schemes means that at the end of the support period more than 60% of CAP money will still be in the form of area payments. For many farms, therefore, major problems are looming after 2027 if there are not sufficient signals and support for the changeover in the period before then.
In the ongoing negotiations in Brussels, there is even a threat that the member states will be required to continue paying a minimum share of 60 percent of the first pillar as area payments. This requirement would not allow future more ambitious governments to take the steps necessary to achieve the goals of the Green Deal and to initiate an ecological and socially acceptable transformation of agriculture. In order to anchor a support system that makes agriculture sustainable within ecological limits, it is necessary to phase out area payments.
In summary, it can be said that although the direction of the draft legislation is right, and progress has certainly been made thanks to NABU's pressure, the steps taken are far too small to counteract the major challenges such as species extinction and climate change. It is clear that the forces of inertia are still stronger than the will to courageously initiate the necessary change. Further pressure from civil society and clear messages to the parties in the election year could still influence the decisions of the Bundestag and Bundesrat on the draft laws that are due in May and June.