O Plano Estratégico da Política Agrícola Comum (PEPAC), In Portugal, it came into force on January 2023, Although the legislation was only published in February 27. The delay is evident and the doubts are many.
Although it includes interventions related to direct payments, investment support and market measures, the latest discussions have focused on the impact of this reform on agricultural holdings, especially regarding the first pillar of support. Common Agricultural Policy (CAP).
In fact, listening to the different criticisms, it is clear that no one is satisfied. This may be due to a strategy that sought to please everyone, but which in practice does not please anyone. On the other hand, the “habit” of creating global measures to respond to specific problems persists, namely those resulting from regional differences and distinct production intensities.
Building this PEPAC It wasn't an easy exercise. We all have different perspectives and would make different choices. Still, some of the measures seem clearly out of place.
In practice, there is a widespread feeling that the construction of this PEPAC It was a well-executed exercise to meet European ambitions, but it was poorly oriented towards national needs. It is not evident that the plan will strengthen the sector’s competitiveness or solve many of its weaknesses.
The possibility of adjusting the PEPAC Yearly adjustments may be possible for some measures. Nevertheless, it is not expected that major changes will occur during the period of their validity.
Over the past few months, we have carried out a very wide range of simulations on the impact of PEPAC In the farms. The results show that it is difficult to establish a standard, beyond the losses resulting from the adjustment of the unit value of the rights of the producers. Basic Payment Scheme (BP) and the disappearance of greening.
One of the biggest surprises is to see that many extensive farms, seemingly aligned with the main objectives of policy, end up being harmed, with income losses of the order of 20% a 30%.
For example, an exploration with 300 hectares of permanent pastures in organic agriculture, still in conversion, a livestock herd of 100 dairy cows and one RPB of 90 euros per hectare, em 2022, suffers a break of more than one-third in the total amount of direct aid.
In a theoretical and aggregated assessment, it would be expected that extensive livestock farming in organic agriculture would be one of the winners of this reform, given the announced priorities. However, the results show a different reality.
In contrast, an exploration with 15 hectares, Without productive activity and with the land left idle, in 2022, Ultimately, it maintains its level of support.
The measures to support investment, which will only come into effect from 2025, They are very similar to the existing ones. If the rules of the tenders are not changed, they could continue to feed a bureaucratic “snowball”, incompatible with the speed required by those who intend to invest.
In the sector, there is fear that this reform will turn into another postponed opportunity and that, in the end, it will not contribute to creating value.
We hope that this will not be the case. However, the start leaves much to be desired.