CAP post 2020: 365 billion to Europe, 36 to Italy (2.7 billion less). Cuts on wine, too

The budget that the EU Commission has proposed for the next Community Agricultural Policy – which is the first post Brexit one - amounts to 365 billion euros for 2021-2027 (30% of the EU budget), compared to the over 400 billion euros distributed in the previous programming period. The reform proposal was officially presented today, marking the green light for the reform. The Commission has indicated a 5% cut, which according to Parliament would, however, actually be a real impact of 15-20% less for each country, especially in direct payments. The Ministries of Agriculture of Spain, France, Ireland and Portugal, together with representatives of Finland and Greece have immediately opposed the cuts, today, inviting others to do so as well, which the EU Parliament had rejected yesterday. The cut for Italy would be 2.7 billion euros at current prices, i.e., 6.9% less than the programming period ending in 2020. Italy would be assigned 36.3 billion euros, between 2021 and 2027, of which 24.9 billion euros in direct payments, 8.9 billion euros for rural development and 2.5 billion euros for market measures. The Italian agricultural organizations do not like these cuts at all, and first of all, the association of Italian farmers, Coldiretti, that considers them unsustainable for the sector. Confagricoltura, the confederation of Italian farmers, is particularly opposed to the proposal of inserting a maximum funding ceiling for companies, with the view of favoring the smaller ones. Other points in the CAP reform, which many do not like, include the return of some specific competences to individual Member States, another point on which the European Parliament yesterday (whose approval, together with that of the Council, is fundamental in order to launch the reform) was totally contrary.
In this situation, the good news for the wine world, according to the recent rumors Wine News has gathered, is the maintenance of the CMO specification, as the vine-growing sector is the only one remaining in the EU to have it.
Obviously, the overall budget cut will also affect the European producers to some extent, and in this case, the estimate is in the order of 5% less (since the expected cuts are horizontal, by country and by agricultural sector), but the real impact has yet to be revealed.
The CAP reform proposal, which the Comité Européen des Entreprises Vins, which brings together 24 European-level trade organizations representing more than 90% of exports, has defined as “not very ambitious”, though it does welcome the fact the specific measures for wine have been maintained, “including National Support Plans for the wine sector”, commented President Jean Marie Barillère. The Comitè pointed out that, since its introduction in 2008, the CMO has contributed to the growth of the sector, which in 2017 reached 11.3 billion euros in exports.
“The Commission’s proposals, nevertheless”, commented Barillère, “are actually, at the very least, conservative, and in this context reducing the overall budget of the CAP brings even more bad news for wine”.
However, among the positive aspects, there is openness to the “flexible” elements concerning the system of plant authorizations. Even though this does not probably solve the current problems, it is a signal that it is heading in right direction”, commented the CEEV Secretary, Ignacio Sánchez Recarte. The positions the CEEV has taken are for the most part shared by the two most important trade organizations in Italy, the federation of wines, Federvini and the Italian wines union, Unione Italiana Vini.
“First of all, we have to fully understand how much the amounts will really be reduced”, commented the CEO of Federvini, Ottavio Cagiano, “then we will continue to support market orientation, which means paying greater attention to promotion in third countries and intervention measures for encouraging exports. However, we must not forget the importance of training and information within the EU, both in terms of moderate consumption of alcohol, an issue which is fundamental for wine and the economic and cultural value of wine on European markets as well. We believe that the role of each individual country managing its own resources is important, while the prospect of reinstating competences to individual members is a pretext to return to dividing the European wine policy by implementing rules that are too different from country to country, not even to recreate the evident differences between Regions within each State”.
“We are however convinced that the CAP reform and CMO wine represent an opportunity”, commented the president of the Unione Italiana Vini (Uiv), Ernesto Abbona, “to improve, modernize and facilitate the implementation of national support programs and strengthen market orientation in the sector. It is also urgent for Italy to find a unified vision and adopt a National Strategic Plan, which is fundamental for a long-term perspective on the promotion of Italian products abroad. The contribution of the Ministry for Agricultural Policies is going to be decisive to this purpose, and I sincerely hope it will play an active role in negotiations and in general within the European Union. We definitely appreciate the maintenance of National Support Plans and the promotion measure towards extra-EU markets in the Commission proposal”, continued Ernesto Abbona, which maintain the financial specificity for wine, as we had requested. The measures will have to be financed through an ambitious budget, which must be capable of dealing with the future challenges in the wine sector: first and foremost, internationalization and sustainability. Therefore, an NSP reduced by 5%, not counting the effects of inflation, could penalize investments. We appreciate some of the initial signs of flexibility regarding authorizations for new vineyards, but it is not sufficient because the current system does not allow the dimensional growth of Italian companies and further, does not respond to the needs of this sector, whose vineyard tends to be on a decline. We, of Unione Italiana Vini, ask the Government to implement a Strategic Plan and work in this direction to ensure that the Italian wine potential is not lost. It would be quite useful, for example, to create a national reserve to recover 20.000 hectares of replanting rights, which would otherwise be lost. Another issue that worries us is the lack of a “single direction” at the European level and, in our country, the risk of fragmenting the CAP at the regional level, which would invalidate its purpose. We want to draw the attention of the future government”, concluded Ernesto Abbona, “to this issue, asking it to become the promoter of a unique vision that protects us from the dangers of regionalization”.