Reality check by Alessia Pautasso

Reality Check

Are Common Agricultural Policy subsidies paying for environmental quality?

Reality check

Are Common Agricultural Policy subsidies paying for environmental quality? Prepared by Report compilation Luigi Boccaccio Ariel Brunner Jenna Hegarty Gareth Morgan Trees Robijns

The Royal Society for the Protection of Birds – RSPB (BirdLife in the UK) BirdLife International European Division The Royal Society for the Protection of Birds – RSPB (BirdLife in the UK) The Royal Society for the Protection of Birds – RSPB (BirdLife in the UK) BirdLife International European Division

Spanish study Juan Bécares Sociedad Española de Ornitología – SEO/BirdLife (BirdLife in Spain) Ana Carricondo Sociedad Española de Ornitología – SEO/BirdLife (BirdLife in Spain) Celsa Peiteado WWF Spain The Spanish study was carried out jointly with WWF Spain. German study Jenja Kronenbitter Tobias Lepp Dr. Rainer Oppermann

Institut für Agrarökologie und Biodiversität - IFAB Institut für Agrarökologie und Biodiversität - IFAB Institut für Agrarökologie und Biodiversität – IFAB Naturschutzbund Deutschland - NABU (BirdLife in Germany)

Czech study Vaclav Zamecnik Czech Society for Ornithology – CSO (BirdLife in the Czech Republic) The Czech report was made with the help of Mr. Libor Braveny from the Agency for Nature Conservation and Landscape Protection of the Czech Republic. Mr. Braveny gave special assistance to generate the GIS maps. Edited by Alessia Pautasso BirdLife International European Division Concept and design by: www.studiostraid.be July 2010

Reality Glossary

Executive summary

1. Introduction

8 9

1.1 The Common Agricultural Policy, an overview 1.2 Objectives, approach and limitations

2. Spanish case study

2.1 Introduction 2.2 Methodology 2.3 Main findings 2.3.1 General distribution of payments 2.3.2 Broad environmental implications A. Natural resources - Water B. Biodiversity - Natura 2000 C. High Nature Value farming systems 2.4 Conclusions

3. German case study

3.1. Introduction 3.2. Methodology 3.2.1 Nature benefits and agricultural payments at farm level A. Farms B. Analysis 3.2.2 Nature benefits and agricultural payments at area level 3.3. Main findings 3.3.1 Results: Nature benefits and agricultural payments at farm level 3.3.2 Results: Nature benefits and agricultural payments at area level 3.4. Conclusions

10 11 12 13 13 15 16 17 17 19

20 21 21 22 22 23 24 24 24 27 33

y Check

4.1 Context 4.2 Methodology 4.2.1 Comparison of CAP support received by selected pairs of farms from the same region 4.2.2 Examples of environmentally damaging practices in relation to public financial support 4.3 Main findings 4.3.1 Comparison of CAP support received by selected pairs of farms from the same region A. ‘Good practice for nature’ and ‘bad practice for nature’ farm analysis B. Inside and outside SPA farm analysis 4.3.2 Examples of bad agricultural practice A. Soil erosion B. Destruction of watercourses and wetlands C. Unsuitable field boundaries 4.4 Conclusions

34 35 35 35 36 36 36 36 38 39 39 40 42 43

5. Discussion

6. Policy recommendations

7. References

7.1 References to introduction, discussion and policy recommendations 7.2 References to Spanish Case study 7.3 References to German Case study 7.4 References to Czech Case study

51 51 51 52

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4. Czech case study

Glossary AES CAP CC CMO DP EAFRD EAGF EC EEA FEGA F&V GAEC GIS HNV INE LFA LPIS MARM NVZ N2K OP RDP SAC SAPS SMR SPA SPS SZIF TA UAA WFD

Agri-Environment Scheme Common Agricultural Policy Cross Compliance Common Market Organisation Direct Payments European Agricultural Fund for Rural Development European Agricultural Guarantee Fund European Commission European Environment Agency Fondo Español de Garantía Agraria Fruits and Vegetables Good Agricultural and Environmental Condition Geographical Information System High Nature Value Instituto Nacional de Estadística Less Favoured Areas Land Parcel Identification System Ministerio de Medio Ambiente y Medio Rural y Marino Nitrate Vulnerable Zones Natura 2000 Other Payments Rural Development Programme Special Areas of Conservation Single Area Payment Scheme Statutory Management Requirements Special Protection Areas Single Payment Scheme Státní zemědělský intervenční fond Total Area Utilised Agricultural Area Water Framework Directive

Executive summary S

ince new transparency rules entered into force in April 2009, Member States are required to disclose the beneficiaries of Common Agricultural Policy (CAP) payments.This finally allows an objective examination of the distribution of EU farm subsidies and of the value to society of such payments. This study attempts to give an insight into the potential relationships between CAP spending patterns and issues relevant to biodiversity protection and natural resources conservation. The report presents, via different research methodes, the results that can be obtained by crossing CAP subsidy data with environmental information. The analysis includes three case studies, carried out in the Czech Republic, Germany and Spain, and incorporates the main findings of similar activities undertaken in Latvia and the UK.

The study highlights how CAP spending intensity does not reflect any nature conservation priorities and does not specifically support nature-friendly farms. In particular, in the old Member States, Pillar 1 direct payments generally tend to be lower for farms inside Natura 2000 sites and in areas with a high occurrence of High Nature Value farming systems, as well as for organic farms. This is only partially compensated by rural development payments, which in general tend to have a more even distribution. Although there is no guarantee that funds spent in biodiversity-rich areas or biodiversity-friendly farming systems are actually targeted to nature conservation, the fact that spending intensity in these areas is not higher than elsewhere indicates that the CAP is not giving priority to farmland biodiversity.

BirdLife International calls on EU institutions and Member States to act on these findings and on findings of previous BirdLife studies, and to seize the opportunity to steer the ongoing debate on the post-2013 CAP towards ambitious reform. Environmentally perverse subsidies should be abolished, the Natura 2000 network should be adequately supported and land managers who engage in nature-friendly farming should be properly rewarded.

BirdLife International Âˇ Reality Check

Examples collected at farm level suggest that significant funds are directed at farms engaged in unsustainable practices, indicating that cross compliance is widely failing to avoid environmental damage and that, despite several rounds of reforms, â&#x20AC;&#x2DC;the polluter pays principleâ&#x20AC;&#x2122; is still not reflected in the CAP. In Spain, high expenditure on intensive and irrigated farming systems is spatially associated with severe environmental problems such as water depletion and pollution, thus suggesting a causal relationship between certain CAP instruments and environmental degradation.

Introduction

iodiversity in Europe has been declining for decades and a major cause of this decline is agricultural change. Agriculture is the largest land use in Europe, accounting for almost half of the total EU-27 land area. Its impacts are therefore far-reaching. Rapid changes to farming systems in the post-war decades allowed an unprecedented increase in agricultural productivity, but had severe impacts on biodiversity1. The European Union and its Member States are contracting parties to the UN Convention on Biological Diversity. In 2001, the EU Heads of State made the commitment to halt the decline of biodiversity in the EU by 2010 and to restore habitats and natural systems. In 2002, they also joined some 130 world leaders in agreeing to significantly reduce the rate of global biodiversity loss by 2010. In May 2006, the European Commission adopted a communication on “Halting Biodiversity Loss by 2010 – and Beyond: Sustaining ecosystem services for human well-being”, which underlined the importance of biodiversity protection as a pre-requisite for sustainable development, as well as setting out a detailed EU Biodiversity Action Plan to achieve this. Natura 2000 is the centrepiece of the EU nature and biodiversity policy. It is an EU-wide network of nature protection areas established under the 1992 Habitats Directive. Natura 2000 is composed of Speacial Areas of conservation, designated under the Habitats Directive, and Special Protected Areas, designated by the oldest EU nature legislation, the 1979 Birds Directive. The aim of the network is to assure the long-term survival of Europe’s most valuable and threatened species and habitats. The EU Biodiversity Action Plan addresses the challenge of integrating biodiversity concerns into other policy areas in a unified way, and identifying funding commensurate to this ambitious task. The CAP is meant to provide major financing opportunities for biodiversity conservation in the EU2. Despite these commitments, the EU has failed to meet its biodiversity protection objective3, with agricultural habitats and species showing particularly poor conservation status4, and CAP instruments not being targeted for this purpose5. This year, EU Heads of State have renewed their commitment to reversing biodiversity loss and have adopted a very ambitious target6 that cannot be met without a profound transformation of our agricultural landscapes.

The net impact of agriculture on biodiversity and the wider environment is therefore strictly dependent on the type of farming systems and practices deployed. For example, mixed farming systems tend to be more beneficial to biodiversity than specialised arable farms, and haymaking generally performs better than silage. Another risk to farmland biodiversity is associated with the abandonment of extensive farming systems. Targeting support to the right farming systems and practices is crucial if CAP funding is to benefit biodiversity. 1. Stoate C, Báldi A, Beja P, Boatman ND, Herzon I, van Doorn A, de Snoo GR, Rakosy L & Ramwell C (2009) Ecological impacts of early 21st century agricultural change in Europe – A review. Journal of Environmental Management 91: 22-46. 2. European Commission (2004) Communication from the Commission to the Council and the European Parliament on financing Natura 2000. COM(2004) 431 final. 3. European Commission (2009) Report from the Commission to the Council and the European Parliament. Composite report on the conservation status of habitat types and species as required under Article 17 of the Habitats Directive. COM(2009) 358 final. Spanish Ministry of Environment, Rural and Marine Affairs (2010) “Cibeles” piorities – halting the loss of biodiversity in Europe. 4. European Environment Agency (2009b) Progress towards the European 2010 biodiversity target. 5. BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity? BirdLife International (2009b) Could do better. How is EU rural development policy delivering for biodiversity? 6. Council of the European Union (15 March 2010) Council conclusions on biodiversity post-2010 – EU and global vision and targets and international access and burden sharing regime.

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Although, agricultural expansion into natural habitats and intensive agricultural systems can have severe negative impacts on biodiversity, properly managed agricultural habitats in Europe can be of critical importance to biodiversity conservation. The European Environment Agency estimates that 50% of all species in Europe depend on agricultural habitats, including a number of endemic and threatened species. This is both because of the territorial dominance of agricultural land use and because of the way in which historic, low intensity land management has resulted in rich species assemblages.

1.1 The Common Agricultural Policy, an overview The CAP represents roughly 37% of the EU budget, corresponding to €51.5 billion in 2009. In order to understand the magnitude of this EU budget stream, it should be noted that only €0.32 billion was spent in 2009 on the EU financial instrument for the environment (LIFE+), which is the only EU budget line specifically dedicated to environmental protection. Of the CAP budget, €37.8 billion was spent on direct payments. This represents the largest part of the CAP’s Pillar 1, entirely financed by the European Agricultural Guarantee Fund (EAGF). These payments are given to land managers without any clear objective and with no provision for monitoring impacts. In the ‘new’ EU-12 Member States, direct payments are implemented through the Single Area Payment Scheme (SAPS), which takes the form of a flat-rate payment per hectare (i.e. the payment level depends only on how much land a farmer has and each unit of land receives the same amount), corresponding to an amount decided by Member States. In 2009, the total expenditure for the SAPS was €3.8 billion. In the ‘old’ EU-15 Member States, direct payments are implemented through the Single Payment Scheme (SPS) and each beneficiary is entitled to a payment that is linked to the average amount received during a 3-year reference period (2000-2002). This rigid “historic model”, used by most of the ‘old’ Member States, means that beneficiaries who received high payments in the past are entitled to a high Single Farm Payment, while farmers who received low payments are given a low entitlement. This means that the SPS de facto replicates past production subsidies spending patterns. Some countries are using a ‘hybrid model’ (Denmark, Finland, Northern Ireland and Sweden) or a ‘transitional hybrid model’ (England and Germany) for the SPS, which means, respectively, that entitlements are either partly based on a regional flat rate, or are progressively moving towards a regional flat rate. In 2009, the total spending for the SPS was €27.2 billion. In most cases, SPS entitlements can be traded and detached from the land to which they were originally allocated. In 2009, approximately €6.7 billion was used for other direct payments, including coupled payments for arable crops, suckler cows, sheep and goats, tobacco and other specific sectors. Besides direct payments, Pillar 1 of the CAP includes market interventions (including export subsidies and intervention purchasing), on which the EU spent €3.4 billion in 2009. Although the amount spent on these payments is much lower than SPS/SAPS, it is enormous if compared to other EU budget spending lines. For example, in 2009 the EU spent €305 million on tobacco and over €1.32 billion on alcohol and wine7, while spending only €317 million on LIFE+, the only EU financing instrument exclusively dedicated to environmental protection. EU spending on alcohol and wine is almost three times higher than spending on “Title 07 - Environment” of the EU budget (€494 million)8. Unlike Pillar 1, Pillar 2 is partly co-financed by Member States and is based on the European Agricultural Fund for Rural Development (EAFRD), which finances EU rural development policy. This includes a set of axes and measures that correspond to three broad objectives: competitiveness and job creation (axis 1), environment and countryside (axis 2) and quality of life in rural areas (axis 3). Rural development policy is implemented via national or regional Rural Development Programmes (RDPs) that are approved by the European Commission and managed by national and regional authorities. Although many RDPs include measures that can harm biodiversity or that are not properly designed to support less productive but environmentally valuable agro-systems, and although several axis 2 measures are poorly implemented and hence unlikely to benefit the environment, rural development policy is based on solid principles (e.g. well-defined objectives,

7. For some of these schemes, agreements have been reached to phase out or heavily reduce them. 8. http://eur-lex.europa.eu/budget/data/D2009_VOL4/EN/index.html

contractual base, monitoring and evaluation, Commission approval, consultation of stakeholders) that create considerable potential to support biodiversity9. Another element of the CAP is cross compliance, a set of rules that should be respected by recipients of direct payments and certain rural development (axis 2) payments. Cross compliance provisions include some aspects of EU legislation (Statutory Management Requirements relating to environmental protection, plant and animal health, animal welfare and food safety). It also includes some basic good practice standards which aim to keep land in ‘Good Agricultural and Environmental Condition’. Despite the breadth of environmental issues covered by cross compliance, its effectiveness is extremely low due to a number of inherent problems, such as the vagueness with which most requirements are defined, the ineffective control and penalty system and the lack of any monitoring and evaluation of the results10.

1.2 Objectives, approach and limitations Council Regulation 1290/2005 requires Member States, via their agriculture Ministries, to publish details of CAP payment beneficiaries. This provision entered into force in 2009, making an incredibly large source of data available for analyses related to CAP spending patterns. By 30 April each year, Member States have to publish information for the preceding financial year, including: • the full or legal name of the beneficiary; • the municipality where the beneficiary resides or where the company is registered, including the postcode of the municipality; • the amount of direct payments received; • the amount of other Pillar 1 payments (market interventions); • the amount of rural development payments, including both EU and national financing; • the total amount of CAP payments distributed. BirdLife International and its national partner organisations are committed to ensuring that the CAP delivers its full potential for biodiversity. The amount of information released as a result of EU transparency rules, has created a valuable opportunity to scrutinise the progress in using CAP funding to benefit biodiversity, as well as in implementing other areas of EU environmental policy, such as climate change, water, etc.

The study builds on three national reports produced by BirdLife Partner organisations in the Czech Republic, Germany and Spain (here jointly produced with WWF Spain), and incorporates the main findings of similar activities run by BirdLife Partners in Latvia and the UK. The full studies are available online11. Each national case study used its own methodology, depending on the quality of CAP payment data released by national authorities, on the issues relevant to biodiversity protection at a national level and on the specific expertise of each BirdLife Partner. Details about the methodologies used are provided in each case study chapter.

9. BirdLife International (2009b) Could do better. How is EU rural development policy delivering for biodiversity? 10. BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity? 11. http://www.birdlife.org/eu/EU_policy/Agriculture/eu_agriculture_transparency.html

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The report explores potential relationships between CAP spending patterns and issues relevant to biodiversity protection. This should not be considered an exhaustive study on the topic, but rather a demonstration of the types of analysis that can be performed and the results that can be obtained by using CAP payment data.

Spanish Case Study

2.1 Introduction This study, carried out by SEO/BirdLife and WWF Spain, analysed the possible relationships between CAP payments (both Pillar 1 and 2) and environmental protection in Spain. The analysis, based on the full dataset of subsidy beneficiaries disclosed by the Spanish government, focused on two fundamental questions: • Are CAP subsidies supporting Spain’s most environmentally valuable farming systems (High Nature Value farming) and do they co-fund the management of the Natura 2000 network? • How are CAP payments correlated to the conservation and management of natural resources (the title of the budget heading under which the CAP is classified), in particular of water, according to the Water Framework Directive (WFD), EC Directive 2000/60? This work is part of a broader project that includes two more local case studies, assessing more detailed data that is not available at the national level. These local case studies are not presented in this report, but will be available online starting June 201012. The study indicates that the method of calculating the payments (based on higher yields for a reference period or the loss of income) continues to benefit more intensive crops, with consequent impacts on the environment. Table 1 gives an overview of the pillar 1 payments in Spain in 2008. Spain, with more than 25 millions of hectares of Utilised Agricultural Area (UAA) -nearly 15% of the UAA in the EU27, received approximately €5.6 billion from Pillar 1. Direct Payments (SPS: 56% and Non-decoupled aids: 24%) accounted for nearly 80%, while other payments (namely, Wine and Fruit & Vegetables CMO) received the remaining 20% of Pillar 1 funding. After the ‘Health Check’ revision of the CAP, the EAFRD (Pillar 2) budget for Spain amounts to €8.05 billion for the period 2007 - 2013. The total public budget for rural development policy in the period 2007-2013, including national co-financing, corresponds to approximately €15 billion, with an estimated annual average spend of almost €2 billion13.

Sector aids

PILLAR 1 - EAGF DIRECT PAYMENTS SPS Non-decoupled aids Coupled payments Additional payments (art.69)

2008 80% 56% 24% 15.4% 6.5%

Specific payments OTHER PAYMENTS Wine CMO F&V CMO Outermost regions Export restitutions Others Promotion actions Most Needed Persons TOTAL

2.1% 20% 6.8% 5.0% 4.4% 0.4% 2.3% 0.2% 0.9% 100%

12. www.seo.org and www.wwf.es 13. FEGA-MARM, 2009 14. FEGA-MARM, 2009

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Table 1. EAGF distribution by payment scheme in Spain14

The RDPs of Spanish autonomous communities have allocated an average of 55% of the total public budget to Axis 1, 32% to Axis 2 and 13% to Axes 3 and 4. Table 2 gives a more comprehensive overview of the total CAP payments spent in Spain in 2008. It must be noted that due to delays in programming and approval, much of the budget allocated to rural development, and particularly to its environmental component, remains unspent. That means that the figures above give a very optimistic overestimate of funding that is actually available for environmentally targeted support. Table 2. Overview of CAP payments in Spain in 200815 Direct payments

Other pillar I payments Rural development Total spending Spending per hectare

70% 13% 17%

€ 6.87 billion € 294

2.2 Methodology In the study 2008 payment data released by the national paying agency (FEGA) were used. These data were classified into three categories of payments: Direct payments and other payments (both from EAGF) and payments from EAFRD (as a total figure)16. Spatially explicit environmental data for GIS analysis were limited and difficult to access17. The following data sources were used: • Utilised Agricultural Area (to calculate per hectare payments): National Statistical Institute (INE), data for 1999 (the most recent agricultural census); • Surface area corresponding to each agricultural land use (irrigated, dry, pasture, herbaceous/ arable, permanent crops): Land use map (1995-2006; from official sources: CORINE, forest map, etc.); • Over-exploited groundwater bodies and Nitrate Vulnerable Zones: Ministry of Environment, 2007 and 2009 respectively; • Natura 2000 network: Ministry of Environment, 2009. The study is based on overlaying different elements of environmental information with maps of CAP payment data18, in order to investigate the relationship between CAP spending intensity (showing payment rates by hectare of UAA, according to the different categories of payments) and environmental problems or biodiversity value. • Natura 2000 network: Natura 2000 sites account for more than 14 million hectares in Spain (Map 1), out of which, nearly 6 million have an agricultural use (rising to 10 million if the over 4 million hectares of temporarily grazed pastures are included). These figures equate to around 28% of total national surface and 25% of total UAA, respectively. Presented differently, almost 75% of Natura 2000 area in Spain is used to some degree for agricultural purposes, highlighting the relevance of the CAP for these sites. Map 1. Natura 2000 network in Spain19 15. http://ec.europa.eu/budget/library/publications/fin_reports/fin_report_08_data.xls 16. The lack of detailed payment information per measure, has limited the quality and scope of this study. 17. The lack of up to date environmental information or information available in formats suitable for GIS analysis, especially regarding the location of High Nature Value farming systems, forest conservation status and landscape values, has limited the scope of the study. 18. Because of technical constraints, the Canary Islands are not covered. 19. MARM, 2009 (information of 2009, latest version), consulted on December 2009: http://www.mma.es/ portal/secciones/biodiversidad/rednatura2000/rednatura_espana/index.htm.

• Over-exploited underground waters: According to Spanish government sources, a high proportion of underground water bodies in Spain are overexploited, in some cases to extreme levels (Map 2). This is leading to the loss of many aquatic habitats and could have far reaching negative impacts on both ecosystems and human society, including the long-term viability of farming. It should also be noted that the state of many water bodies is still unknown. Map 2. Over-exploited underground water bodies20 • Nitrate Vulnerable Zones (NVZ): Mainly due to chemical fertiliser use in agriculture and intensive livestock farm wastes, fresh waters in large areas of Spain are at risk of pollution by nitrates (in turn becoming unsuitable for human consumption). As can be seen in Map 3, nearly 12% of total national surface is classified as NVZ, an area that has increased in recent years. Map 3. Nitrate Vulnerable Zones21

2.3 Main findings 2.3.1 General distribution of payments If all types of payments are combined, the subsequent map (Map 4) shows a slight concentration of aid within the main river basins, Mediterranean coast, Galicia, and the northwest regions.

This map also shows that the highest payments are located within cities, mostly the provincial capitals. This reflects the residence of the beneficiary rather than the farm location. In turn, there is a significant amount of municipalities, distributed over the entire national territory, that receive less than 100 €/ha (this is relevant as the Health Check introduced the principle that the smallest beneficiaries are excluded from direct payments). Payments are also clearly concentrated along some of the major river valleys and coastal plains where irrigated arable farming and specialised crops such as vineyards, olives, rice, cotton, fruits and vegetables are prevalent. Similarly, the higher payments of the northwestern regions could be explained by the dairy and beef sector in Galicia. 20. MARM, 2009 (information of 2007, latest version), consulted on December 2009: http://servicios3.mma.es/siagua/visualizacion/descargas/ mapas.jsp 21. MARM, 2009 (information of 2009, latest version), consulted on December 2009: http://servicios3.mma.es/siagua/visualizacion/descargas/ mapas.jsp 22. SEO/BirdLife

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Map 4. Distribution of total payments22

Specific maps by type of payment highlight bigger differences between areas and some relevant analysis can be made. In the case of Direct Payments (Map 5), which accounted for more than 65% of total CAP funds for Spain in 2008, there is a clear relationship between these payments and the areas with highly intensive crops mainly under irrigation, in particular the Guadalquivir River Valley (i.e. olive, cereals, cotton and rice production) but also in the Ebro River Valley (cereals, fruits, etc.). This reflects the fact that Direct Payments are calculated following an historical model, which benefits more intensive crop production. The relevance of the dairy and beef sector in the northwest, tobacco in Extremadura (central-west) and nuts in Catalonia is captured in this map as well. Direct Payments include specific aid for these sectors and they are often managed under highly intensive systems. Map 5. Direct payments from EAGF23 Map 6. Other payments from EAGF24 Other Payments (Map 6) mainly consists of aids under the two last Common Market Organisation schemes still running in 2008: Wine and Fruits & Vegetables (F&V), which jointly account for more than 60% of these payments. Even if the total amount of export refunds (included in Other Payments) is much lower than CMOs, they can still be very significant at local level, in particular in sectors for which exports are a great part of their business (like F&V or pig meat). Therefore, regions where these sectors have undergone significant expansion, for instance Castilla-La Mancha (for wine), and Murcia and Valencia (for F&V), now have the highest payment rates. Other areas, again the valleys of Guadalquivir, Ebro and low Guadiana rivers, as well as the south-eastern corner of Andalucia, mainly occupied with irrigated crops, come out with significantly higher levels of aid. For payments made under EAFRD programmes (Map 7), the results reflect the type of measures implemented during the first years of the programming period. Therefore, the prevalence of early retirement subsidies in regions like Galicia and Asturias can explain the higher payment rates. Another example is Castilla-La Mancha and Aragon where grants for the improvement of irrigation infrastructures may explain the higher payments. In general, rural development spending intensity is much more evenly spread than Pillar 1 spending, with mountain versus lowland differences being much less apparent. A very inclusive (and questionable) classification of Less Favoured Areas (with nearly 80% of land under one of the three 23. SEO/BirdLife 24. SEO/BirdLife

categories) and the relatively high budget allocated to LFA measures may also account for this spending pattern. Map 7. Payments from EAFRD25 It is worth noting that large cities and capitals still receive the highest payments, which to some extent seems incompatible with the “rural development” and “territorial” approach of CAP Pillar 2. Most of the measures currently deployed are related to farming or the agro industry (axes 1 and 2), while funding of initiatives aimed at rural communities (axis 3 and LEADER) had been barely implemented by 2008 (in any case, total funding for axes 3 and 4 accounts for just 10% of total RDP budget). While national authorities tried to include the place of residence as an eligibility criterion for some rural development measures (e.g. LFA payments), the European Commission rejected this under the argument of freedom of residence within the territory of the EU. Although not the objective of this study, it is interesting to show how just a few cities (59 out of 8,046) receive payments above 10,000€/ha (all payments counted together), while the average payment for the rest of municipalities is slightly higher than €300 per hectare and the mean is below that (table 3). The average rate of total payments for these 59 cities is nearly 150,000 €/ha and whilst these figures are not real (i.e. the payments do not relate to the city but to land owned and managed elsewhere by city residents) they give a good indication of the concentration of payments. Table 3. Average payment rates (€/ha) according to several criteria26

Municipalities UAA>50%TA Municipalities < 10,000€/ha Municipalities > 10,000€/ha Total Municipalities - average mean (1) Total Municipalities - total mean (2)

EAFRD

4,436 7.987 59 8.046 8.046

60.33 55.09 11.827,31 141.41 36.46

Direct Other Payments- PaymentsEAGF EAGF

45.02 45.84 10.487,26 122.40 40.50

203.30 215.89 127.238,93 1.147.33 183.48

Total Payments

308.65 316.81 149.553,50 1.411,14 260.44

TA: Total Area of Municipality I UAA: Utilized Agricultural Area I N: num. of municipalities included in the category (1) Payment rates calculated as average of all municipalities’ rates (2) Payment rates calculated as mean of total absolute amounts for every type of payment divided by total UAA

Unfortunately, the lack of more detailed information on specific measures and payments prevents thorough analysis of the links between the environment and CAP funding at national level. However, despite this limitation, and others gaps arising from the lack of spatially explicit data suitable for GIS analysis, some striking evidence has been found. Table 4 presents different payment rates ordered by type of payment, according to farmland location or farming system. The figures can be compared with each other and with the national average payment (Graph 1) (calculated with data from municipalities where UAA accounts for 50% or more of its total surface and where payment rates remain below 10,000 €/ha to avoid distortion effects).

25. SEO/BirdLife 26. SEO/BirdLife on the basis of FEGA 2008

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2.3.2 Broad environmental implications

Table 4. Average payment rates (€/ha) by type of system or location27 Type of system / area

Inside Natura 2000 Network (>50% TA) Inside Natura 2000 Network (>90% TA) Outside Natura 2000 Network (>50% TA) Outside Natura 2000 Network (>90% TA) Rain-fed crops Irrigated crops Pastures “Dehesas”* Permanent crops Herbaceous crops Over-exploited underground water bodies Nitrate Vulnerable Zones (NVZ) Irrigated crops in NVZ Total Municipalities (UAA>50%TA) – N 4436

EAFRD

51.63 47.06 57.93 57.45 39.45 87.13 57.90 22.10 54.53 49.50 26.80 52.70 74.03 60.33

Direct Other Payments- PaymentsEAGF EAGF

27.22 8.34 45.57 44.59 29.58 209.31 6.68 3.64 170.62 36.68 96.69 92.21 206.56 45.02

140.78 124.80 202.72 196.16 211.47 321.50 159.27 103.89 191.80 277.57 174.87 232.58 297.28 203.30

Total Payments

219.63 180.21 306.22 298.21 280.51 617.94 223.85 129.63 417.32 363.75 302.26 377.49 577.86 308.65

TA: Total Area of Municipality I UAA: Utilized Agricultural Area I N: num. of municipalities included in the category * A Dehesa is a complex concept which usually entails several uses, mainly extensive livestock rearing and forestry exploitation (for cork, charcoal and wood), with possible low degrees of cropping (for forage), and even hunting purposes. However, for the purpose of this study only Dehesas which have their surface designated as Utilized Agricultural Area (UAA) have been included in the analysis and so exclusively hunting systems (only a minor part) are not considered.

A. Natural resources - Water • Irrigated crops. For all types of payments, irrigated systems receive the highest levels of support (Graph 1), with the biggest difference in comparison to non-irrigated crops for ‘Other Payments’. Irrigation systems usually entail higher costs, (through water pricing for example) and this is supposed to be the rationale for higher support. However, they also are more productive, thus more profitable, and produce a wide set of negative environmental impacts (in addition to high levels of water consumption). The highest EAFRD payments received by irrigated crops reflect the importance placed on measures related to modernisation of irrigation systems and the calculation system for agri-environment payments (based on additional cost and income forgone). • Over-exploited aquifers. Total payments related to these areas are not above average, however, there seems to be a strong link between “Other Payments” (the only type for which the payment rate is higher) and incidences of over-abstraction (Map 8). As highlighted above, this type of payment is mainly related to intensive fruit and vegetable production (most of which is produced in greenhouses). This can be linked to overexploited water bodies located in southwestern and south-eastern Andalucia, and areas in the eastern regions (Murcia and Valencia). Wine production in Castilla-La Mancha also seems to play a role. • Nitrate Vulnerable Zones (NVZ). General payment levels in these areas are quite similar to those for over-exploited underground water bodies, although they are slightly higher for the categories of “Direct Payments” and EAFRD aids (Graph 1). The clearest link, as shown in Map 9, appears again in the case of “Other Payments” diverted to the NVZ located in central Spain (Mancha Oriental and Mancha Occidental NVZ in Castilla La Mancha) and in the West (Guadiana plain areas in Extremadura), Southwest (Guadalquivir plain), the Southeast (Campo de Dalías and Campo de Níjar) areas in Andalucia; Levante area (Campo de Cartagena and Segura plain in Murcia and Valencia) and several areas along the Ebro River. • Irrigated land on NVZ and over-exploited underground water bodies. Analysis shows, (see maps 10 and 11) how irrigated areas located within a NVZ or farmland using water from overexploited water bodies, broadly reside within regions receiving the highest support under “Other Payments” from EAGF. This analysis also shows how current CAP payments are suppor-

27. SEO/BirdLife on the basis of FEGA 2008

ting the expansion and maintenance of environmentally harmful farming systems at the expense of wetlands and other aquatic ecosystems. For example, some of the most representative RAMSAR sites, currently under significant pressure due to water pollution and abstraction for irrigation, are located in areas with high rates of EAGF Other payments (i.e. Doñana National Park, Tablas de Daimiel National Park, Alcazar de San Juan wetland, or L’Albufera in Valencia). B. Biodiversity - Natura 2000 To obtain data which are strongly related to Natura 2000, only municipalities with 50% or more of their total surface area included in Natura 2000 sites have been considered. The results identify that farming systems inside Natura 2000 receive lower payments (Graph 1 and 2), with the highest difference for EAGF payments, while EAFRD expenditure is relatively more even (probably due to agri-environment and LFA payments). C. High Nature Value farming systems High Nature Value farming systems are broadly identified with non-irrigated extensively managed crops, “dehesas” and other extensive pastures. These systems also receive consistently lower amounts, especially when compared to irrigated land, with the biggest differential for EAGF-Other payments (Graph 1).

28. Generated by SEO/BirdLife

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In particular, the “dehesas”, one of the most valuable Spanish systems providing important environmental public goods, represent the lowest levels of support for all type of payments, even for rural development expenditure, despite the fact that some RDPs include measures targeted at these systems. The different definition of the “dehesas” between regions, as forest or farming areas, is likely to contribute to this situation. Graph 1. Payment rates by system or area and type of payment28

Graph 2. Payment rates inside/outside Natura 2000 Network by type of payment29

Map 8. Overlaying of Other Payments - EAGF and overexploited or salinized underground water areas30 The red lines indicate the perimeter of overexploited or salinized underground water areas. Map 9. Overlaying of Other Payments - EAGF and Nitrate Vulnerable Zones31 The orange lines indicate the perimeter of Nitrate Vulnerable Zones.

29. Generated by SEO/BirdLife - At least 50% of total area of the municipality is inside Natura 2000 (but payment related to hectares of UAA) 30. SEO/BirdLife 31. SEO/BirdLife

Map 10. Overlaying of Other Payments - EAGF and irrigated crops in Nitrate Vulnerable Zones32 The yellow lines indicate the perimeter of main irrigated areas on NVZ. Map 11. Overlaying of Other Payments - EAGF and irrigation with water from over-exploited underground bodies33 The black lines indicate the broad perimeter of areas irrigated mainly from over-exploited underground waters.

2.4 Conclusions 1. The level of available information is still poor and access to it complex. Transparency levels still need to be improved in order to allow proper analysis of the CAP and its impact. 2. There is a need for further research, distinguishing by type of payment, both for EAGF (decoupled and specific aids, specified by sector) and EAFRD (by measure). 3. In addition, other factors like endangered species distribution, erosion and desertification risk, salinised waters, natural flooding areas, irrigated area or likely relationships with conservation status of forest areas, should be analysed. The environmental consequences of abandonment should also be assessed. 4. The current CAP distributes most funds as income support to a very small number of large or resource intensive farms and often to those engaging in unsustainable practices. 5. In turn, there seems to be a consistently lower level of support for the most environmentally valuable farming systems, such as extensive grazing systems or extensive arable crops and farmland within Natura 2000 sites. The loss of these systems, either via intensification or via abandonment, is a primary cause of the decline of biodiversity associated with open habitats. Hence, the CAP is failing in its contribution to Europe’s biodiversity objectives, where it should play a key role.

7. A redistribution of payments to areas of environmental value and the focusing of axis 2 measures to address environmental problems (water over-abstraction, soil erosion etc) are clearly needed. At the same time, payments that contribute to the intensification of production in sensitive areas should be stopped. 8. The current CAP is clearly not rewarding the delivery of public goods in Spain. If biodiversity and resource protection are objectives of this policy, those land managers that take care of the environment must be properly rewarded. 32. SEO/BirdLife 33. SEO/BirdLife

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6. Furthermore, there seems to be a close correlation between CAP payments (mainly from Pillar 1) and over-exploitation of underground waters. This shows the failure of the CAP to contribute to the objectives of the WFD.

German Case Study

3.1. Introduction This study attempts to use the newly published data on CAP beneficiaries in Germany to explore whether, and to what extent, these payments are justified. Specifically, it asks to what extent farmers provide nature benefits and what relation there is between such benefits and the level of CAP payments received. The study combines two approaches: • The first compares CAP payments among a small but representative set of real farms, whose levels of environmental performance are well understood. • The second is a photo-documentary of agricultural land in various German regions, attempting to “put a face” to the subsidies paid out of the CAP budget. Germany is one of the largest producers of agricultural products in the European Union. Almost 19 million hectares, more than half of the German territory, is used as farmland34. As can be seen in table 1, German farmers and land managers received €6.58 billion in CAP payments in 2008. More than three quarters went to direct payments while less than 15% went to Rural Development. After the 2003 reform, Germany opted for a so-called dynamic hybrid model. This means that payments are based partially on historical reference data (2000–2002) and partially on the basis of a uniform per acreage payment for a specific region. The ‘historical’ part of the payments is gradually phased out in favour of the ‘regional’ part of the payments. It will evolve to a purely regional model by 201335. Therefore the current strong reflection of past production subsidies will fade over time, although the disparity in payment level will remain between regions reflecting their production level. The implementation of the RDPs in Germany is done at Länder (regional) level. The consequence is a large difference between various regions, notably in the attention given to agri-environment schemes. If the data of all the regions is aggregated, the RDPs allocate spending between the different axes in the following way: Axis 1 < 30%, Axis 2 > 40%, Axis 3 > 20%, Axis 4 < 10%. Total amount spent on AE measures is less than 30%36. These average figures hide huge disparities and several Länder (Hamburg, Mecklenburg-Western Pomerania, Lower Saxony-Bremen, Sachsen-Anhalt, Schleswig-Holstein) allocate to axis 2 less than the (national) legal requirement of 25%. Table 1: Overview of CAP payments in Germany in 200837 Direct payments

Other pillar I payments Rural development Total spending Spending per hectare

84% 3% 13%

€ 6.55 million € 388

This case study is divided into two parts. Both substudies analyse the nature benefits provided by farms that received CAP payments. The first focuses on benefits at the farm level, the second on benefits at the area level38.

34. Bundesanstalt für Landwirtschaft und Ernährung (BLE) (2010) Farming in Germany - Facts and Figures http://www.bmelv.de/cln_182/sid_ DCE87804F823EA2477B22D48E631B982/SharedDocs/Standardartikel/ EN/Agriculture/FarminginGermany.html#doc381588bodyText1 35. Tiessen J, van Stolk C (2007) The Introduction of Single Farm Payments in Finland and Germany. RAND Europe 36. Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Institute for European Environment Policy. 37. http://ec.europa.eu/budget/library/publications/fin_reports/fin_report_08_data.xls 38. The pictures in this report are credited to IFAB (2009). The two aerial pictures are credited to Google Earth

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3.2. Methodology

3.2.1 Nature benefits and agricultural payments at farm level The objective of this study was to compare farm-level biodiversity and benefits in landscape structure with CAP payments. Natural inventory data for farms was compared with actual CAP payments. A. Farms Data from 27 farms in five federal states were used (Map 1). Map 1: Location of the farms in Germany The data used in this study is derived from the project ‘Naturindikatoren für die landwirtschaftliche Praxis’ (Nature indicators for agricultural practice) in which the evironmental benefits of several farms were examined in 2002/2003. The objective of this study was to create and test indicators enabling a stronger integration of biodiversity and landscape structural benefits in agricultural practices39. The data for CAP payments are from 2008, therefore only data from farms that have not undergone restructuring, expansion etc. between 2002 and 2008 have been used. However, it should be noted that operational changes cannot be ruled out. A new natural inventory on farms in 2008 was not carried out. The farms include a mix of small and large farms, conventional and organically managed farms, cash crop, forage growing and mixed farms (See Table 2). Table 2: Summary of the analysed farms and their characteristics No.

farm type

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

mixed mixed forage cash crop cash crop mixed cash crop cash crop forage forage mixed cash crop cash crop mixed mixed forage mixed forage mixed

size arable grass livestock cultivation type soil direct direct 2nd pillar (ha) land land units/ha capability payments payments payments (%) (%) (Lu/ha) class (€) (€/ha) (€) 248 21 77 60 433 114 310 98 70 98 471 66 315 188 1.267 310 114 532 1.232

83 30 17 99 100 46 100 97 40 0 75 99 100 66 87 53 87 0 96

17 70 83 1 0 54 0 3 60 100 25 1 0 34 10 47 13 100 4

0,3 0,5 0,5 0 0 0,7 0 0 1,4 1,7 0,6 0,5 0 0,7 0,5 0,5 2,7 0,9 0,4

organic organic organic conventional conventional organic conventional organic organic conventional organic conventional conventional organic organic conventional organic organic organic

70 ? 40 50 62 45 70 59 50 60 49 32 28 ? 33 33 24 32 33

93.700 2.700 14.400 17.200 150.600 30.800 99.400 22.300 22.00 31.300 160.000 17.100 98.700 37.800 277.700 93.400 27.200 125.100 349.900

39. Oppermann R, Braband D & Haack S (2005) Landwirtschaft. - Berichte über Landwirtschaft Band 83, 76-102.

380 130 190 290 350 270 320 230 310 320 340 260 310 200 220 300 240 240 280

54.700 4.000 6.900 0 0 29.600 3.000 15.800 12.100 0 0 0 0 20.500 144.100 6.300 14.500 0 227.400

20 21 22 23 24 25 26 27

forage mixed mixed mixed mixed mixed grafting cash crop

32 116 38 68 57 26 150 217

0 44 42 34 100 58 98 100

100 56 58 62 0 42 2 0

1,3 1,6 0,8 0,7 0,1 0,5 0,9 0

organic conventional conventional conventional organic organic conventional conventional

22 72 45 63 60 35 60 38

6.100 40.500 8.000 18.000 16.000 4.600 43.900 66.300

190 350 210 260 280 180 290 310

9.800 6.900 2.500 15.100 11.800 5.300 1.000 43.000

Information relating to area is rounded to the nearest ha and percentage point, information relating to overall payments is rounded to the nearest €100 and for payments per ha to the nearest 10 €/ha. B. Analysis The following three nature indicators were identified as a proportion of the total area of each farm (examples see Picture 1): • species rich farmland • extensively managed farmland • landscape features Picture 1: (from left to right): species rich farmland, extensively managed farmland, hedges as landscape features

Species rich areas provide an essential contribution to biodiversity preservation in agricultural landscapes. The biodiversity of agricultural landscapes depends on the agricultural management of individual farms. It can be positively influenced e.g. by a reduction of herbicides, reduced use of fertilizers, reduced stand densities and an extensive use of grasslands. In order to detect the biodiversity of farmland, a transect method and a list of indicator species for species rich grassland and arable land were used within the framework of the nature indicator project. Following this practice, a method for the valuation of farmland was developed40. The intensity of use is a critical factor for the biological quality of living space in agriculturally used areas. Therefore, extensively managed farmland such as extensive grassland, traditional orchards and field margins; do have a strong impact. Due to their natural biodiversity, they become valuable

40. Oppermann R, Braband D & Haack S (2005) Landwirtschaft. - Berichte über Landwirtschaft Band 83, 76-102.

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Farmland, which is rich in species like the arable land on the left in picture 1 or the extensively managed flower rich hay meadow in the middle of picture 1, forms the basis of a lively and diverse cultural landscape. Farmers who cultivate these areas, and thus conserve biodiversity, provide real and valuable nature benefits. The conservation of hedges, on the right in picture 1, as well as the cultivation of traditional orchards also brings benefits for nature.

refuges within an intensively managed agricultural landscape. However, it often takes several years until a visible increase in biodiversity can be noted on newly created extensively managed farmland. In addition, extensively managed land helps preserve soils and groundwater. A further indicator is the extent to which landscape features, such as groves, hedges, boundary ridges, scrubland etc. are present. Landscape features are cultural assets worth preserving and providing important functions such as breeding and over-wintering habitats. The extent of landscape features in a certain region depends both on the natural classification of the area (for instance geology, soil type, climate) and the type of agricultural practices deployed.

3.2.2 Nature benefits and agricultural payments at area level With this second exercise, photographs were taken in several regions of Germany to provide examples of typical land management and its influence on the natural environment. Examples were selected from a variety of farming systems and from regions with varying soil quality. The photographs were taken in August 2009 in the following regions: • Mecklenburg (Mecklenburg Lake District) • Sachsen-Anhalt (Northern Harz region) • Baden-Württemberg (Kraichgau) Actual payment levels of the documented farms have been extracted from the officially released data.

3.3. Main findings 3.3.1 Results: Nature benefits and agricultural payments at farm level Table 3 shows a compilation of nature benefits provided and direct payments received by each farm. The extent of species rich farmland was selected as the main indicator for each farm’s naturefriendliness. Table 3: Summary of the analysed farms and their nature characteristics

No.

farm type

1 2 3 4 5 6 7 8 9 10 11 12 13 14

mixed mixed forage cash crop cash crop mixed cash crop cash crop forage forage mixed cash crop cash crop mixed

species rich farmland (%) 0 5 24 0 0 14 0 1 0 0 11 10 0 18

extensively used farmland (%) 24 1 56 50 70 18 0 36 0 1 0 15 10 45

lanscape features (%) 3 5 8 7 10 19 16 2 2 5 2 6 4 8

direct payments (€/ha) 380 130 190 290 350 270 320 230 310 320 340 260 310 200

15 mixed 16 forage 17 mixed 18 forage 19 mixed 20 forage 21 mixed 22 mixed 23 mixed 24 mixed 25 mixed 26 grafting 27 cash crop average (n=27) -

9 6 78 0 21 51 0 43 14 1 17 1 1 -

22 47 36 97 57 70 43 64 57 3 46 2 4 -

5 10 18 6 5 13 8 4 11 6 8 8 5 -

220 300 240 240 280 190 350 210 260 280 180 290 310 280

By cross-referencing the percentage of species rich farmland with direct payments it becomes evident that farms providing the best nature benefits receive significantly less than farms providing low nature benefits (Graph 1). The negative correlation between the level of direct payments and the area of species rich farmland is statistically significant (Spearman-rank-correlation: N=27, S=5526, p<0.000, φ=-0.69).

300 200 100 0

direct payment (€/ha)

400

Graph 1: Direct payments (€ / ha) in relation to the percentage of species rich farmland (% of UAA)

The data sets for the different farm types are very small (grafting: 1 farm, forage growing: 6 farms, cash crops: 7 farms, mixed: 13 farms), therefore, a separate analysis can only reveal limited trends. For forage growing and mixed farms, the ‘nature friendly’ farms again receive below average direct payments per ha whereas farms providing low nature benefits get significantly above average payments (Graph 2a and 2b). None of the studied cash crop farms had a high proportion of species rich farmland, therefore a comparison of the amount of direct payments distributed to ‘nature friendly’ farms and ‘less nature friendly’ farms of this type was not possible.

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species rich farmland (%)

Graph 2: Direct payments (€ / ha) in relation to the percentage of species rich farmland (% of UAA) a) Forage farms b) Mixed farms

Graph 2 shows how for forage growing farms (a) and mixed farms (b), those providing high nature benefits generally receive below average payments (the average of €280 per ha is indicated by the dotted line) and significantly lower direct payments than farms providing few or no nature benefits. Extensively managed farmland can also be an important indicator for a farm’s nature friendliness. In contrast to the species rich farmland indicator, no negative correlation could be found between the proportion of extensively managed farmland and direct payments per ha (Graph 3). However, payments to farms with a very low proportion of extensively managed farmland are higher than the average of €280 per ha in almost all cases while direct payments to ‘nature friendly’ farms are lower than the average in more than half of the cases. Graph 3: Direct payments (€ / ha) in relation to the percentage of extensively managed farmland (% of UAA)

In addition to species rich farmland and extensively managed farmland, a possible indicator for the nature friendliness of a farm is the extent of landscape features. However, no significant correlation between the proportion of landscape features and direct payments could be found.

A comparison of direct payments to organically and conventionally managed farms showed a significantly higher average payment to conventionally managed farms (Graph 4). The difference in the amount of payment is statistically significant (Wilcoxon rank test: Norganic=15, Nconventional=12, W = 42, p = 0.02). Graph 4: Direct payments to organically and conventionally managed farms

The results identify that less nature friendly farms profit more by the payment system than nature friendly farms.

3.3.2 Results: Nature benefits and agricultural payments at area level Analysis of the photographs shows that in many cases farmers get high payments without providing any nature benefits and even when causing environmental harm, for example: • remaining natural habitats are directly and negatively affected by land management • buffer zones and transition areas are missing in the majority of landscapes and farms • isolation of remaining natural habitats takes place The photos below provide examples of inappropriate land management in areas of Germany.

Hillside cultivation of maize extended to the reed bed

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Picture 2. This photograph from Mecklenburg shows a maize field on a slope, which directly borders the reed bed of a nature reserve. The consequences are soil erosion and nitrate leaching, which run off into the reed bed and water of the nature reserve.

Picture 3. This photograph, taken in Mecklenburg, shows a field which directly borders a wetland habitat (kettle/sedge fen). With the loss of the field margin, nitrates and pesticides can enter the wetland habitat easily. In the background, there are several other wetland habitats, which could be easily linked and the ecological value of the landscape increased.

Missing field margin/ â&#x20AC;&#x2DC;isolationâ&#x20AC;&#x2122; of habitats

Picture 4. This picture from Mecklenburg shows a field which directly borders a hedge. Field margins by hedges are of particularly high ecological value as an important habitat, cover and breeding site for several plants and animals in intensively managed agricultural landscapes. The value could be much higher and a change of the ecological value could be achieved by leaving a field margin of 5-10m.

Missing field margin

Picture 5. This photograph has been taken in the Kraichgau. It shows a species rich wet meadow at the edge of a nature reserve, which has been ploughed for growing maize. In the middle of the maize field runs a perennial water ditch. The borders of the maize field are directly on the top edge of the ditch, whereby nitrate and pesticide loads get into the water, which ends up in the nature reserve. A sufficiently sized margin along the ditch is highly necessary.

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Wet meadow replaced by maize field

Picture 6. This photograph has been taken in the northern Harz region. It shows large scale arable farming, without any trees or other landscape elements. Such areas host very little biodiversity and fail to provide even basic ecosystem services.

Large scale farming without trees or shrubs

Picture 7. This is a satellite photo of the previous picture. The farmer gets about 15000 â&#x201A;Ź of direct payments annually for this large scale farming without any margins, erosion protection strips or landscape elements.

Area of arable land 50 ha: Direct payments about 15.000â&#x201A;Ź / year; Environmental benefits = 0

Picture 8. This photograph shows a cherry tree avenue near the Northern Harz, which is worth preserving. The trees suffer visibly from road traffic and agricultural cultivation, which occurs immediately next to the tree trunks. With an adequate border between the avenue and the cropland, or extensively managed meadows along the cherry tree avenue and flower strips across the field, the situation for the trees and wider biodiversity could be significantly improved, however these are not standard practices.

Cultivation to the base of trunks of a cherry tree avenue

Cherry trees

Area of arable land 43 ha: Direct payments about 13.000€ / year; Environmental benefits = 0

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Picture 9. This is the satellite picture of the previous photo. The farmer gets annually about 13.000€ of direct payments for this arable land. Adequate field margins or extensive meadows along the cherry tree alley and across the plot for connecting the biotopes are not in practice up to now. But in fact for such high payments those arrangements could be expected.

Picture 10. This photograph from Mecklenburg shows cultivation directly next to the top edge of a mulched drain water ditch. The consequences are water pollution due to nitrate and pesticide leaching. The habitat was also destroyed through vegetation mulching.

Land cultivation to the border of a mulched drainage ditch

Picture 11. On this section of arable land, covering 30 ha, the farmer provides few nature benefits but receives about â&#x201A;Ź 8000 in annual direct payments.

Previously set-aside land, now under arable cultivation Ditch and wetland withoutany field margin

Area of arable land 30 ha: payments: about 8.000â&#x201A;Ź / year; Environmental benefits almost 0

3.4. Conclusions The following conclusions can be drawn from the farm sample analysis and from the photo examples: 1. The current system of CAP payments directs more support to: - farms providing few nature benefits instead of farms providing high nature benefits - conventional farms instead of organic farms 2. It is often in a farmer’s financial interests to farm more intensively to produce higher quantities of marketable commodities. 3. Farms providing high nature benefits are disadvantaged by both the current market failure to reward such benefits and the system of CAP payments which rewards high levels of production in a historic reference period. When land management is extensified in order to produce additional environmental benefits, revenue losses often occur. Therefore, remuneration is urgently needed. 4. A significant amount of utilised agricultural land receives high payments without providing nature benefits and even while causing environmental harm.

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5. To support farmers, the taxpayer pays firstly to support intensive land management (through Pillar I direct payments) and secondly - but only a relatively small amount - for additional payments to farmers to provide nature benefits (through Pillar II agri-environment schemes). The outcome is conflicting land management.

Czech Case Study

4.1 Context In 2008, direct payments (primarily the Single Area Payment Scheme) represented 58% of CAP expenditure in the Czech Republic. SAPS payments are gradually increasing by approximately 10% each year. EU12 Member States can increase direct payments by using national financing (‘top ups’), to a maximum of +30% but not beyond the SAPS limit for a specific country. Along with SAPS, other payments in Pillar I include: payments for sugar beets, energy crops and tomatoes, in place since 2006, 2007 and 2008 respectively. In 2008, Pillar II (European Agricultural Fund for Rural Development) represented 38% of the EU-funded CAP budget spent in the Czech Republic. Almost 30% of the total Pillar II budget is currently being spent on agri-environment payments. Table 1. Overview of payments in the Czech Republic in 200841 Direct payments

Other pillar I payments Rural development Total spending Spending per hectare

59% 3% 38%

€ 648 million € 153

4.2 Methodology The relationship between CAP payments and environmental benefits in Czech Republic was analysed using national payment agency data42. The data on financial support to land parcels selected as examples of good and bad practice farms, refer to 2009. Unfortunately, environmental data at farm level are extremely limited, especially for nature conservation. The following sources were used: • Natura 2000 network, Ministry of Environment, 2006; • Ministry of Agriculture (farmer portal), 2009-2010; • Local caretaker groups responsible for Special Protection Areas and Important Bird Areas; • State authorities responsible for the management of Special Protection Areas. Two approaches were used: A. the total amount of public funding was compared across pairs of selected farms, chosen to represent good and bad practice from a biodiversity and broader environmental point of view; B. photographic documentation of bad practice was gathered from various regions of the country, and cross-referenced with information on public payments where available43.

The first part of the study focuses on the comparison of CAP support received by selected pairs of farms from the same region. The farms were compared partially on the basis of their nature conservation designation status. As in the rest of the EU, the Czech Republic has several Natura 2000 sites which consist of Special Protection Areas (SPA) under the Birds Directive and Special Areas of Conservation (SAC) under the Habitats Directive. This study focuses primarily on Special Protection Areas, although SPAs and SACs often overlap.

41. http://ec.europa.eu/budget/library/publications/fin_reports/fin_report_08_data.xls 42. SZIF, www.szif.cz 43. The pictures of this report are credited to CSO Archive. Aerial pictures to be credited to Libor Braveny

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4.2.1 Comparison of CAP support received by selected pairs of farms from the same region

In this part of the study, local caretaker groups and state authorities responsible for the management of SPAs were asked to choose ‘good practice’ and ‘bad practice’ farms in terms of nature conservation. Five pairs of farms were located in SPAs and one pair was selected outside the protected area network. The amount of public payments received by these farms was compared (table 2). There are a number of indicators which highlight the difference in approach to environmental management between ‘good’ and ‘bad practice’ farms. These include the farmer’s approach to the protection of landscape elements including wetland features, scattered vegetation and the willingness to adjust farming methods and practices to the needs of endangered fauna and flora. In addition, two farms from each region were randomly selected, under the condition that one of the farms was managing land in an SPA and the other farm was located near this SPA but outside the protected area. In total, five pairs of farms were analysed and the amount of public payments received was compared (table 3).

4.2.2 Examples of environmentally damaging practices in relation to public financial support The second part of the study presents some examples of environmentally damaging farming practices, along with figures of CAP subsidies associated with these land parcels. Photos were taken by members of the Czech Society for Ornithology, primarily in 2009 but with a number of archive images from 2006. Farms are not identifiable from the pictures as the purpose of the report is not to blame individual farmers, but to highlight how CAP funding is directed to farms that engage in unsustainable practices.

4.3 Main findings 4.3.1 Comparison of CAP support received by selected pairs of farms from the same region A. ‘Good practice for nature’ and ‘bad practice for nature’ farm analysis Table 2 and graph 1 give the details of CAP support received by farms applying good practice (highlighted in light purple) and bad practice (highlighted in dark purple). This comparison suggests that: • ‘good practice’ farms tend to receive slightly higher payments (in €/ha) than ‘bad practice’ farms. Because SAPS payment per hectare is the same for all farms, Pillar 2 payments seem to make a real and positive difference for ‘good practice’ farms; • ‘good practice’ farms tend to receive lower total amounts (in €/beneficiary) than ‘bad practice’ farms. This can be explained by the size difference between the two farm types; • ‘good practice’ farms usually have smaller land parcels compared to ‘bad practice’ farms operating in the same region. This can result in a higher diversity of management operations in space and in time (e.g. more varied crops, different mowing dates); • organic farms also tend to be ‘good practice’ farms, although one example of ‘bad practice’ was found in an organic farm; • farms with grassland receive higher levels of support from Pillar II as a result of high uptake of agri-environment payments.

Graph 1. Payments (€/ha) to good practice versus bad practice farms good practice

1400

bad practice 1200 1000 800 600 400 200

Pilar 1

Table 2. Comparison of the CAP support received by farms with good practice ( practice ( ) 44 Pair No. 1 2 3 4 5 6

Pair No. 1 2 3 4 5 6

Region

Farm size (ha)

SPA Podyji

1.625,2 1.452,2 549,7 942,1 149,8 607,4 467,4 1.080,2 140,9 487,1 89,5 3.531

SPA Podyji SPA Krkonose SPA Krkonose SPA Jeseniky SPA Jeseniky SPA Labske Piskovce SPA Labske Piskovce SPA Krivoklatsko SPA Krivoklatsko Vysocina region Vysocina region

Region

SPA Podyji SPA Podyji SPA Krkonose SPA Krkonose SPA Jeseniky SPA Jeseniky SPA Labske Piskovce SPA Labske Piskovce SPA Krivoklatsko SPA Krivoklatsko Vysocina region Vysocina region

National funds (€)

Farm characteristics Average Arable field size land (ha) (%) 13,0 17,3 10,0 7,4 7,5 10,3 8,2 9,0 4,3 6,7 3,3 9,1

Grassland (%)

Permanent crops (%)

Management type type

4,8 0,0 100,0 100,0 100,0 87,3 100,0 95,5 46,4 15,4 62,2 22,2

0,3 8,7 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,2 0,0

conventional conventional conventional conventional organic conventional organic organic conventional conventional organic conventional

94,9 91,3 0,0 0,0 0,0 12,7 0,0 4,5 53,6 84,6 36,6 77,8

Public payments PILLAR I PILLAR II EU EU Total National EU Total funds funds (€/ha) funds funds (€/ha) (€) (€/ha) (€) (€)

400.095 512.783 277.019 589.138 119.499 173.588 150.818 287.837 39.052 46.220 85.188 201.004 79.383 151.385 152.209 322.494 30.413 45.790 76.415 153.845 21.451 28.263 986.088 1.124.587

316 406 316 306 309 331 324 299 325 316 316 318

562 596 533 466 569 471 494 439 541 473 555 598

) and bad

36.066 50.733 101.831 162.044 33.952 105.716 86.135 197.908 13.694 13.271 14.594 175.303

144.266 232.382 407.325 648.177 135.809 422.862 344.538 785.045 54.775 53.083 58.377 684.482

111 195 926 860 1.133 870 921 910 486 136 815 243

Total (€)

Total (€/ha)

1.093.210 1.149.272 802.243 1.248.876 255.033 814.770 661.441 1.457.656 144.672 296.614 122.685 2.970.460

673 791 1.459 1.326 1.702 1.341 1.415 1.349 1.027 609 1.370 841

44. Exchange rate was 26,563 Czech crowns/Euro (1/1/2010). All economic characteristics are cumulative figures for the period 2007-2009, data presented on www.szif.cz.

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B. Inside and outside SPA farm analysis Table 3 and graph 2 compare CAP support received by farms with at least part of their farm inside an SPA (highlighted in light purple) versus farms outside Natura 2000 or any other protected areas (highlighted in dark purple). This comparison suggests that: • there is no major difference in CAP spending intensity between the two sets of farms; • farms inside SPAs usually have smaller land parcels compared to farms outside protected areas operating in the same region. Graph 2. Payments (€/ha) to farms with at least part of the farm in Special Protection Areas (Natura 2000) versus farms outside protected areas

Natura 2000

800

outside Natura 2000

700 600 500 400 300 200 100 0

Pilar 1

Table 3. Comparison of CAP support received by farms operating inside SPAs ( farms operating near, but outside, each SPA ( )45 Pair No. 1 2

Region

Farm size (ha)

SPA Komarov

164,1 1.526,8 2.339,9 1.416,8 2.276,0

control farm SPA Poodri control farm

SPA Hovoransko Cejkovice

SPA Litovelske Pomoravi

SPA Rozdalovicke rybniky

control farm

Farm characteristics Average field size (ha)

) and control

Arable land (%)

Grassland (%)

Permanent crops (%)

9,1 17,8 11,3 15,9 12,0

40,7 89,4 83,4 89,0 86,6

59,3 10,5 16,6 11,0 0,0

0,0 0,1 0,0 0,0 13,4

2.819,6 2.105,8

25,6 10,1

98,4 93,0

0,0 7,0

1,6 0,0

2.222,1 723,4

6,6 13,4

47,8 95,2

51,8 4,8

0,4 0,0

3.226,5

26,7

100,0

0,0

45. Exchange rate was 26,563 Czech crowns/Euro (1/1/2010). All economic characteristics are cumulative figures for the period 2007-2009, data presented on www.szif.cz.

Pair No. 1 2

Region

National funds (€)

SPA Komarov

19.878 487.100 593.203 329.114 558.310

control farm SPA Poodri control farm

SPA Hovoransko Cejkovice

SPA Litovelske Pomoravi

SPA Rozdalovicke rybniky

control farm

Public payments PILLAR I PILLAR II EU EU Total National EU Total funds funds (€/ha) funds funds (€/ha) (€) (€/ha) (€) (€)

Total (€)

Total (€/ha)

51.573 605.570 766.724 478.017 717.558

314 397 328 337 315

435 716 581 570 561

2.681 14.913 30.486 12.005 66.100

10.762 305.502 121.945 47.720 731.757

82 210 65 42 351

84.858 1.413.085 1.512.358 866.856 2.073.725

517 926 646 612 911

368.275 584.109 539.491 1.024.937

207 487

338 743

29.947 19.677

164.068 78.706

69 47

1.146.398 1.662.811

407 790

490.805 138.387

705.039 231.630

317 320

538 511

161.898 6.960

647.289 27.842

364 48

2.005.030 404.819

902 560

793.190 1.184.843

367

613

24.121

96.483

2.098.637

650

4.3.2 Examples of bad agricultural practice A. Soil erosion Around 75% of agricultural land in the Czech Republic is at risk of soil erosion caused by water, almost half of which is under a higher risk category46. About 19% is threatened by wind erosion, again with almost half under a higher risk category. The main reason for this is field size (the Czech Republic has among the largest field sizes in Europe) and unsustainable farming practices. Uniform and large-scale cropping units expose the soil to heavy erosion and give very few opportunities to biodiversity. The largest cropping unit recorded in this survey, with a size of 239.6 ha, was found in the SPA Podyji. Major changes of farmland structure took place during the collectivization of agriculture from the 1950´s until the 1970´s, when large holdings like cooperatives or collective farms took over small private farms. Typical structural and management changes included consolidation and increased field size (accompanied by the loss of many important landscape features), increased pressure on water resources through significant changes in management regimes and increased levels of chemical inputs, such as fertilizers and pesticides. Although there have recently been small improvements to address this unsustainable situation, soil erosion remains one of the most important environmental threats.

46. Ministerstvo zemědělství ČR 2009

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Picture 1. An 81.2 ha maize field in Southern Moravia

Picture 2. Grassland converted into arable land. Although classified within the Land Parcel Identification System (LPIS) as arable, this parcel was in reality grassland and was ploughed up in 2006. This conversion has caused intense soil erosion. In 2009, this farmer received a €509 payment, including SAPS and “Top-Up”47.

B. Destruction of watercourses and wetlands Watercourses and wetlands located in intensively managed pastures can be damaged by livestock if not protected by fencing. These sites are important for endangered fauna and flora and their destruction can lead to the loss of water purification functionality, thus resulting in water pollution. Wetland features are usually extremely important for biodiversity in agro-ecosystems. These sites are very attractive for waders, especially Lapwing (Vanellus vanellus), a species which has suffered a sharp decline in numbers in recent decades. But also other wildlife concentrates around these landscape features. Unfortunately there is no protection of these sites, neither through crosscompliance nor through agri-environment measures. In some cases, these wetlands are just the temporary result of inefficient drainage systems, heavy rainfalls or snow thaw. As these areas are difficult to cultivate and usually excluded from the official farm area which is eligible for CAP payments, they are either drained or left to overgrow. Picture 3. A wetland damaged by an inappropriate livestock grazing regime. This small wetland is an ideal breeding site for the Corncrake (Crex crex) and Common snipe (Gallinago gallinago). The size of this plot is 56.9 ha and the farmer received €27 377 (480 €/ha) in 2009. This payment includes support for agri-environment measures (organic farming and pasture management), Less Favoured Area payment, direct support and top-up.

47. Source: SZIF/payment agency, rate: 26,563 CZK/Euro on 1.1.2010. This reference applies also to all the CAP payment data in this chapter, unless otherwise specified.

Picture 4. Drainage of wetlands on arable land

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Picture 5. Drainage of wetlands on grassland

Picture 6. Vegetation on ditch banks being heavily damaged by inappropriate livestock management. Ditch banks can be important sites for wildlife if vegetation is not destroyed. Damaged vegetation can also lose its functionality as a water filter, resulting in water pollution. In 2009, public subsidies for this 14.5 ha grassland parcel amounted to €10 935 (753 €/ha), and the payment included agri-environment payments for organic conversion and grassland reversion, Less Favoured Area payment, SAPS and top-up payment.

C. Unsuitable field boundaries One of the problems related to farm subsidies is the way in which the eligible area is determined. Rental fees paid by tenant farmers are based on estate maps, while areas eligible for CAP subsidies are based on LPIS (Land Parcel Identification System). This means that many farmers pay rental fees for an area larger than that eligible for CAP payments, and represents an incentive to increase the field size at the expense of important landscape features such as field margins and ditches. Picture 7. Ploughing too close to the field boundary, thus damaging the root system of old apple trees and reducing the ecological functionality of vegetation along the ditch. Although the protection of these landscape features is theoretically built into cross compliance, these very basic requirements are often not fulfilled. In this case, the size of the field is 8.6 ha and the farmer received € 1588 from SAPS and top-up in 2009 (184 €/ha).

4.4 Conclusions Whilst it is not possible to draw definitive conclusions from such a restricted sample study, this analysis seems to indicate that: 1. Farmers in areas that are important for biodiversity conservation (e.g. Natura 2000 sites) do not receive more support than farmers outside these areas. 2. Farms representing positive models for biodiversity conservation tend to be managed according to EU organic farming standards. ‘Good practice’ farms also tend to receive more CAP payments than ‘bad practice’ farms through participation in agri-environment schemes. 3. Although important landscape features on farmland are protected by law and GAEC (Good Agricultural and Environmental Condition) standards, a number of cases of damage were documented. The protection of these landscape features should be properly enforced, and appropriately considered during cross compliance inspections. 4. Soil erosion is one of the main environmental problems associated with land management in the Czech Republic. New GAEC rules define clear conditions for farming on land at risk of erosion and represent an important step forward. However, other practices which mitigate soil erosion, such as crop diversification, field-size reduction and creation of landscape features should be further encouraged. 5. The preservation of wetland features should become a priority for the conservation of biodiversity in agricultural landscapes and to increase the water retention potential of farmland as a way to adapt to climate change.

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Although the size and geographical spread of this sample is relatively limited, the analysis provides a first insight into the links between CAP payments and the environmental performance of farms in the Czech Republic, and this methodology could be extended to larger samples and exported to other countries.

Discussion

CAP spending intensity does not reflect nature conservation priorities. For example, farms in Natura 2000 sites tend to receive lower (Latvia, Spain, Scotland) or comparable (Czech Republic, England) total payments to those received by farms outside Natura 2000. The analyses carried out in Spain and Scotland show that the Single Payment Scheme tends to be unfavourable to farms in Natura 2000 sites. This is probably due to the fact that, as a consequence of natural or legal restrictions, low-intensity farming can be particularly common in these areas, and therefore SPS historical entitlements are lower than outside Natura 2000. This is partly compensated by rural development payments, which tend to have a more even distribution. Although there is no guarantee that funds spent in Natura 2000 are actually targeted to nature conservation, the fact that spending intensity in Natura 2000 is not higher than elsewhere indicates that the CAP is not giving priority to funding Natura 2000 on farmland and, even if CAP instruments were properly designed, only a low level of support would be directed to nature conservation.

Between-pillar distribution is much more balanced in the new Member States, and spending intensity seems to be relatively even51. However, as shown in the Czech Republic, while the perverse subsidies pattern of the old Member States is absent under the SAPS system, there is still no systematic link between level of payments and environmental performance. Furthermore, eligibility problems and mis-implementation of cross compliance rules may exclude significant areas of valuable habitat from support and therefore incentivise their conversion to less wildlife-friendly agricultural land uses.

48. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. 49. Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Institute for European Environment Policy. 50. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. 51. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009.

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An analysis done by the European Environment Agency48 shows that Pillar 1 spending intensity across the EU is generally lower in regions with a high proportion of High Nature Value (HNV) farmland, while there is no consistent relationship between rural development expenditure and the share of HNV farmland. Similar patterns were found by a previous study commissioned by the RSPB/BirdLife UK49. The analysis undertaken in Spain indicates that funding tends to be consistently lower in areas where extensive production systems occur, while higher levels of support are directed to input-intensive sectors. The sample of farms examined in Germany shows that organically managed farms receive significantly lower direct payments per hectare than conventionally managed farms. The lower amount of subsidies directed to Natura 2000 sites, High Nature Value and organic farming systems demonstrates that direct payments are not specifically rewarding farmers who engage in environmentally-friendly production systems or financing areas where nature conservation is a priority. As the direct payment system generally reflects production levels from a historic reference period, this set of results is perhaps not surprising. However, such spending patterns are clearly incompatible with EU conservation priorities and legal obligations toward the environment as well as representing an outdated payment approach and misuse of public money. Per hectare expenditure varies hugely across different Member States, as does the distribution between CAP pillars. EU-15 Member States tend to have higher CAP budget allocations than EU-12 Member States, and this results in lower levels of funding for the latter. Direct payments absorb the large majority of CAP spent in the old Member States, and rural development funds are generally insufficient to compensate for the inequalities created by the historical allocation of entitlements. Furthermore, support coupled to production, whilst limited to a few sectors, appears to concentrate the support on farming systems that are unlikely to benefit biodiversity50.

Examples collected at farm level suggest that a large proportion of funds is directed to farms engaged in unsustainable practices, supporting evidence that cross compliance is failing to prevent environmental damage and that, despite several rounds of reform, the polluter-pays principle is still not reflected within the CAP52. In Spain, it became clear that high levels of expenditure on intensive and irrigated farming systems is spatially associated with severe environmental problems such as water depletion and pollution, thus suggesting a causal relationship between certain CAP instruments and environmental degradation. From a nature conservation perspective, CAP spending is extremely inefficient and even counterproductive. Market instruments, coupled payments and the Single Payment Scheme operating in the EU-15 Member States often tend to give more incentives to environmentally damaging farming systems, while rural development payments are still untargeted and generally insufficient to compensate for the perverse distribution of Pillar 1 payments. The level of detail of CAP subsidy data released by Member States is, however, too low to draw definitive conclusions on the performance of individual CAP budget lines. For example, individual beneficiariesâ&#x20AC;&#x2122; data on direct payments do not differentiate between SPS/SAPS and coupled payments, while the figure given for rural development payments incorporates measures as different as farm modernisation, training, marketing campaigns, agri-environment, afforestation and village renewal. Another misleading categorisation is the reference to the municipality where the beneficiary resides, rather than to where the supported land is actually located or the project developed. Transparency levels need to be improved in order to allow a thorough analysis of the CAP and its impacts. Better data quality would enable testing of individual policy instruments and more accurate spatial analyses, thus overcoming the limitations experienced in this exercise. This study is a demonstration of different approaches that can be followed to investigate the relationships between CAP spending and biodiversity, in order to use the large amount of new data for the purpose of understanding where the policy is failing and what problems need to be addressed. As shown in the Spanish case study, the analysis can be extended to other environmental problems such as water pollution and depletion, as well as soil erosion and desertification.

52. BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity?

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Policy recommendations

This analysis shows that the CAP is still far from supporting biodiversity conservation in a consistent way. However, due to its large financial resources and significantly large coverage of European land, it has a considerable potential to steer vast sections of the countryside towards more sustainable land management. The debate on the future of the CAP after 2013 has started in earnest, and EU institutions and Member States must seize this opportunity to undertake an ambitious reform of this policy. This would substantially improve its delivery against societal objectives and its legitimacy in the discussions on the EU budget allocations for the post-2013 financial perspective. Ill-designed subsidies, such as coupled payments and certain market interventions, need to be urgently removed, while more robust environmental conditions need to be attached to all rural development measures financing infrastructure and modernisation. Such change is necessary in order to avoid additional pressure on natural resources such as water and soil. This study supports the findings of existing pieces of work53 showing that the historical model for the Single Payment Scheme discriminates against low-input and nature-friendly farms, while unsustainable farming systems receive higher subsidies. Although a move away from the historical basis is compelling, this alone would not improve the efficiency and effectiveness of CAP spending in relation to biodiversity conservation. All CAP funding should deliver clear objectives and all payments should take the form of a contract between land managers and society, clearly identifying the objectives and undertakings for which the beneficiary is being rewarded. The polluter pays principle needs to be fully reflected in this policy. All area-based payments should support sustainable land management significantly above and beyond mandatory legal requirements, with additional spending for particularly beneficial systems such as High Nature Value and organic farming. Targeted agri-environment payments should address specific environmental needs and deliver additional benefits. Sufficient funding should be directed to the implementation and management of the Natura 2000 network, supporting land managers who are subject to particularly demanding management prescriptions. In addition, environment protection and sustainable agriculture should be promoted through tools such as awareness-raising campaigns, advisory services, training, support to investments and cooperation, specific local planning etc, as long as these instruments are functional to the delivery of environmental objectives54.

53. European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Institute for European Environment Policy. 54. For more details on this vision for the future of the CAP see: BirdLife, EEB, EFNCP, IFOAM & WWF (2009) Proposal for a new EU Common Agricultural Policy. http://www.birdlife.org/eu/pdfs/Proposal_for_a_new_common_agricultural_policy_FINAL_100302.pdf

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The achievement of the ambitious 2020 biodiversity targets requires European institutions and Member States to enact an equally ambitious reform of the Common Agricultural Policy. EU leaders must seize the opportunity to reshape EU policy making and have a lasting positive impact on our common European environment.

References

7.1 References to introduction, discussion and policy recommendations • BirdLife International (2009a) Through the green smokescreen. How is CAP cross compliance delivering for biodiversity? • BirdLife International (2009b) Could do better. How is EU rural development policy delivering for biodiversity? • BirdLife, EEB, EFNCP, IFOAM & WWF (2009) Proposal for a new EU Common Agricultural Policy. • Council of the European Union (15 March 2010) Council conclusions on biodiversity post-2010 – EU and global vision and targets and international access and burden sharing regime. • European Commission (2004) Communication from the Commission to the Council and the European Parliament on financing Natura 2000. COM(2004) 431 final. • European Commission (2009) Report from the Commission to the Council and the European Parliament. Composite report on the conservation status of habitat types and species as required under Article 17 of the Habitats Directive. COM(2009) 358 final. • European Environment Agency (2009a) Distribution and targeting of the CAP budget from a biodiversity perspective. Technical report No12/2009. • European Environment Agency (2009b) Progress towards the European 2010 biodiversity target. • Farmer M, Cooper T, Swales V & Silcock P (2008) Funding for farmland biodiversity in the EU: gaining evidence for the EU budget review. Institute for European Environment Policy. • Spanish Ministry of Environment, Rural and Marine Affairs (2010) “Cibeles” piorities – halting the loss of biodiversity in Europe. • Stoate C, Báldi A, Beja P, Boatman ND, Herzon I, van Doorn A, de Snoo GR, Rakosy L & Ramwell C (2009) Ecological impacts of early 21st century agricultural change in Europe – A review. Journal of Environmental Management 91: 22-46.

• European Commission - Directorate General for Agriculture and Rural Development November (2008) Direct payments distribution in the EU-25 after implementation of the 2003 CAP reform based on FADN data. • European Commission - Directorate General for Agriculture and Rural Development December (2009) Agricultural Policy Perspectives. Brief nº1. • JRC - Paracchini M L, Petersen J-E, Hoogeveen Y, Bamps C, Burfield I, van Swaay C (2008) High Nature Value Farmland in Europe. • MARM (2008) Fondos Europeos Agrícolas. FEAGA Y FEADER. Informe mensual de Pagos, octubre 2008. Ejercicio 2007-2008. • MARM (2009) Reforma PAC 2003: efectos sobre las ayudas sectoriales. Análisis y Prospectiva - Serie AgrInfo nº 17. Subdirección General de Análisis, Prospectiva y Coordinación, Subsecretaría. Ministerio de Medio Ambiente y Medio Rural y Marino.” • MARM (2009) National Framework for Rural Development (Updated).

7.3 References to German Case Study • Bundesanstalt für Landwirtschaft und Ernährung (BLE) (2009) Datenbank zum Abruf von Informationen zu den Empfängern der EU-Agrarfonds. Internetabruf unter http://www.agrarfischerei-zahlungen.de/Suche im August 2009. • Bundesanstalt für Landwirtschaft und Ernährung (BLE) (2010) Farming in Germany – Facts and Figures http://www.bmelv.de/cln_182/sid_DCE87804F823EA 2477B22D48E631B982/SharedDocs/ Standardartikel/EN/Agriculture/FarminginGermany.html#doc381588bodyText1

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7.2 References to Spanish Case Study

• IFAB (2009) Photos from different regions in Germany. • Oppermann R, Braband D & Haack S (2005) Landwirtschaft. - Berichte über Landwirtschaft Band 83, 76-102. • Tiessen J, van Stolk C (2007) The Introduction of Single Farm Payments in Finland and Germany. RAND Europe

7.4 References to Czech Case Study • BirdLife International (2004) Birds in Europe: population estimates, trends, and conservation status Cambridge, UK: (BirdLife Conservation Series No.12). • Keenleyside C, et al (2006) Farmland birds and agri-environment schemes in the New Member States. A report for the Royal Society for the Protection of Birds. RSPB, Sandy, UK. • Konvička M, Beneš J & Čížek L (2005) Ohrožený hmyz nelesních stanovišť: ochrana a management. – Sagittaria, 127. • Ministerstvo zemědělství ČR (2009) Zpráva o stavu zemědělství ČR za rok 2008 - “zelená zpráva”. • Prazan J, (2002) Agriculture and Environment in the Czech Republic. National report. IEEP, London http://www.ieep.org.uk. • Voříšek P, Klvaňová A, Brinke T, Cepák J, Flousek J, Hora J, Reif J, Šťastný K & Vermouzek Z, (2009) Stav ptactva České republiky 2009. Sylvia 45, Praha, Česká společnost ornitologická. • Zámečník V (2008) The Common Agricultural Policy (CAP) and the environment: a reform agenda for the New Member States. Praha, Česká společnost ornitologická.

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

The Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

United Kingdom

This report has been produced with the financial support of the German Marshall Fund of the United States of America. cover picture: © Trees Robijns chapter pictures: 1-©rspb-images.com 2-©Trees Robijns 3-©Andy Hay (rspb-images.com) 4-©CSO Archive 5-©Ariel Brunner 6-©Ariel Brunner 7-©Ariel Brunner picture page 47: ©Ariel Brunner

The German Marshall Fund of the United States is an American Institution that stimulates the exchange of ideas and promotes cooperation between the United States and Europe in the spirit of the postwar Marshall Plan. Working in partnership with the William and Flora Hewlett Foundation, GMF’s work on trade and development aims to promote greater cooperation between the United States and Europe on trade and agricultural policies as vital instruments of global prosperity. This publication is part-financed by the European Union. Sole responsibility lies with the author and the European Commission is not responsible for any use that may be made of the information contained therein.

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