Scope:

The purpose of this evaluation was to evaluate the impacts of the green direct payment scheme as implemented by Member States. The evaluation gives a full overview on how this new policy instrument is performing against its objectives and provides an evidence basis for considering possible policy changes in the greening domain.

Evaluation findings:

The evaluation (SWD(2018)478) found that despite the objectives set out in the regulation, administration and agricultural considerations rather than environment and climate were the major drivers in the Member States’ implementation choices.

The overall effects on farm management practices and the environment/climate, prior to improvements in Delegated Regulation 2017/1155, are uncertain but fairly limited and variable across Member States, with no significant effect on agricultural production and economic viability. Effects on prices were insignificant.

Yearly administration cost is estimated as follows: for Member States €27 – 76 million; for the Commission €0.6 million; for farmers 3-9 hours of working time per farm or €36 – 217 million (quite independent from farm size).

Greening is generally coherent with other measures relevant for the Common Agricultural Policy general objectives ‘sustainable management of natural resources and climate action’, ‘viable food production’ and ‘balanced territorial development’. Incoherence may occur, if a Member State’s definition of permanent grassland for direct payments is so restrictive that it excludes environmentally sensitive grassland from greening’s scope.

External coherence with other EU environmental and climate legislation and objectives is a given in most cases.

All greening measures have some relevance for environmental and climate needs/problems, but often limited by specific associated rulesand flexibilities, crop diversification – as designed – being least relevant (even for soil).

The greening definition at EU level provides added value by setting a higher level of environmental ambition, more uniformity (but with a scope for variation depending on MS choices), and by dedicating a strong financial incentive.

The evaluation concluded that greening as currently implemented has not fully realised its potential for environment/climate and is seen as complex administratively.

Estimates savings and benefits

Given the scarcity of quantitative data, in particular for benefits, it was impossible to carry out a true efficiency analysis of the greening measures. However, the evaluation concluded that greening as currently implemented has not fully realised its potential for environment/climate and is administratively seen as complex.

The findings of this evaluation, those included in the Court of Auditors report on the greening measures, and stakeholder opinions related to the administrative burden have been taken into account in drafting proposals for the CAP post-2020. Important issues will be the establishment of quantifiable policy targets at EU level and subsidiarity for Member States to choose the appropriate set of measures/actions to deliver on these targets.

Which objective(s) does the Commission pursue?

A number of changes to the legislative framework were undertaken.

The main policy objective of Delegated Regulation (EU) No 2017/1155 included facilitating the implementation of greening for farmers and public administrations in view of increasing its uptake. For this purpose, it was necessary to clarify some provisions and to simplify the administrative management, without jeopardising the CAP environmental policy objectives and sound financial management. These rules aimed to streamline and simplify the requirements relating to the most environmentally beneficial ecological focus areas (EFA) types such as landscape features so as to encourage farmers to use them more extensively.

On the other hand, these rules addressed certain findings of the EFA report, by improving management practices, such as by establishing retention periods for some types of EFAs like fallow land or catch crops or by introducing a ban on the use of plant protection products on productive and potentially productive EFAs.

Amendments brought by Regulation (EU) 2017/2393 made several changes to the permanent grassland, crop diversification and ecological focus area elements of the basic legislation. These included a certain redefinition of areas considered permanent grassland, further flexibilities with regard to crop diversification and ecological focus area obligations for some category of farmers and addition of three new ecological focus area types.

Follow-up adjustments to secondary legislation have been made (Regulation 2018/1784) to take account of the changes to the basic legislation and to ensure coherence and consistency with other relevant greening rules.

Estimated savings and benefits

Quantitative assessment of costs and benefits was not possible at an earlier stage, lacking sufficient hard data on the costs and burdens associated with the new greening measures as explained in the 'Review of greening after one year' (SWD(2016)218).

The efficiency of the greening measures was assessed as part of the evaluation on greening that found that while quantitative data was not always available, greening as currently implemented has not fully realised its potential and is seen as administratively complex.

Administrative aspects were further examined in the analysis of administrative burden arising from the management of the CAP finalised at the end of 2018 and published in 2019.

The review after one year of implementation assessed the implementation of greening identifying possible areas for regulatory adjustment at the level of the relevant secondary legislation (Commission Delegated Regulation (EU) No 639/2014, Commission Implementing Regulation (EU) No 641/2014).

The review identified the following areas for adjustment of Delegated Regulation (EU) No 639/2014:

- better specification or clarification of what is required from farmers and national administrations;

- eliminating some burdensome technical requirements (while making sure that this does not lead to lowering of environmental benefits);

- providing more flexibility or alternative options where this increases the environmental and climate benefits of greening; and

- further harmonisation of some requirements and conditions.

The first insights into the environmental effects of EFAs showed that some EFA types were more beneficial than others. The report indicates that the results may differ depending on factors such as management practices. The evidence collected for the report showed that the amount of land used for EFAs (on average) is in excess of 7%, consequently the Commission decided not to propose increasing the threshold limit.

Estimated savings and benefits

The review of greening after one year of implementation provided first insights into the associated administrative burden. While quantitative evidence was not available at that stage, qualitative evidence indicated that while in certain cases farmers had had to adapt their practices to the new rules, most of the administrative efforts ensuing from greening related to the time spent on filling in and ensuring correctness of the greening part of aid declarations. As for public administrations, the additional burden lied with the development of new management tools such as the EFA layer of the Land Parcel Identification System, which, however, as in the previous period, was expected to require a much lower administrative effort in future years. In addition, it was noted that costs vary significantly depending on farmers' knowledge, national implementation and other factors.

The efficiency of the greening measures was also assessed as part of the evaluation on greening finalised in 2018. The evaluation found that while quantitative data was not always available, greening as currently implemented has not fully realised its potential and is seen as administratively complex.

A study of administrative burden associated with the CAP, including greening, was finalised in 2018 (published in 2019) and provided more in-depth assessment. The study estimated that overall annual administrative costs for greening borne by national administrations range between €166 million and €186 million², accounting for 10% of total integrated administration and control systems (IACS) cost at the aggregate EU level (excluding set-up costs). To be noted that the total administrative costs of IACS were estimated between €1.7 billion and €1.9 billion that is around 3% of the CAP budget.

Greening costs were found to be one of the major cost items of managing and control of direct payments. Key sources of administrative costs included adaptation of the administrative systems and tools, activities to inform farmers, communication and assistance to farmers and compliance checks. The study indicated that a decrease of administrative burden was expected based on the normal learning effect throughout the programming period. Perceptions were, however, mixed on the extent to which the greening review of 2017 was expected to affect costs, with a tendency towards their increase due to expected increased control (the ban on the use of plant protection products in ecological focus areas).

In contrast to administrations, the study revealed that most farmers did not perceive a substantial increase in their administrative burden due to new rules and requirements (e.g. greening) introduced by the 2013 CAP reforms. Overall, the median administrative cost³ as a proportion of total CAP aid received was estimated at 2%. Burden related greening (no quantified data was obtained) mostly stems from compliance with requirements and declaring EFAs rather than its administration. Overall, the study indicated, greening is seen as a quite complex scheme particularly as concerns the definition and rules applying for ecological focus areas (EFAs). The main administrative task mentioned by farmers is the measurement and declaration of areas corresponding to EFAs. The study indicates that introducing the tolerance threshold in the level of accuracy required for EFA declaration, introduced further to the 2017 review, is perceived by farmers as a good option.

² Estimates of the study based on limited data available; also differences in methodology compared to the costs referred to in the evaluation section

³ The estimated administrative burden combines internal costs (i.e. the monetised time spent by the farmer, their family and employees) and external costs (i.e. costs for externalised services).