The week of 19 October 2020 brought significant progress in the reform of the EU's Common Agricultural Policy (''CAP''). A large majority in the European Parliament adopted key points on the parliamentary position relating to the post-2020 policy, while the EU Council agreed its general approach to the CAP reform package. First introduced by the European Commission in 2018, the new CAP calls for a radical shift in implementation from compliance to performance, and includes three regulatory proposals on strategic planning, financing and monitoring, and organising a common market for agricultural products to promote a resilient and sustainable agricultural sector while putting measures in place to counteract climate change and promote a greener environment.

Recognising the link between the agricultural sector and the Paris Agreement, the Parliament moved to combine the current direct payments system in place for EU farmers with new eco-schemes and an allocated green budget. Similarly, the Council's position demonstrates environmental ambition with the proposed introduction of mandatory eco-schemes and reinforced conditionality. The agreed position also allows Member States flexibility in how to attain their environmental goals by designing their own CAP Strategic Plans based on nine key objectives in the European Commission's post-2020 vision for the policy, which are: (i) ensuring a fair income for farmers; (ii) increasing competitiveness; (iii) rebalancing power in the food chain; (iv) countering climate change; (v) environmental care; (vi) preserving landscapes and biodiversity; (vii) ensuring vibrant rural areas; (viii) supporting the next generation of farmers; and (ix) protecting the quality of food and human health.

For the proposed duration of the new CAP from 2021 to 2027, the European Commission has suggested committing just under one third of the EU's total budget to the policy, which indicates the vital role that agriculture continues to play in EU society and economy. This budget is to be divided between the two 'pillars' of the CAP, i.e. support for farmers and rural development. A further EUR 10 billion will also be made available for research in food, agriculture, rural development and the bioeconomy via the EU's Horizon Europe research programme.

The new policy places farmers at the very heart of the movement to protect biodiversity and the environment, and aims to contribute to climate change mitigation and adaption, the efficient management of natural resources, and the preservation of natural habitats. To ensure continuity with the old policy, income support for farmers will remain a core feature of CAP, however small and medium-sized farms and young farmers will be prioritised.

Essential to the ''green architecture'' of the new CAP are the reinforced mandatory requirements and more incentivised funding for eco-friendly farming. This includes a new voluntary eco-scheme to incentivise sustainable farming, voluntary''Agri-Environment-Climate Measures'' (''AECM'', and enhanced conditionality, meaning the reinforced standards that farmers must meet in order to qualify for particular payments under both CAP pillars. These measures make agricultural practices an essential element in realising the ambitions of the EU's Green Deal and its Biodiversity and Farm-to-Fork Strategies. In this regard, the European Commission has stated that Member States national Strategic Plans should set explicit national values for the relevant targets of both of these Strategies.

The new CAP will also promote increased investment in research and innovation and the strengthening of agricultural knowledge and innovation systems (AKIS), so that farmers and rural communities can derive greater benefit from such initiatives. With the CAP's ambitious new measures set to come into effect in 2023, the European Parliament's Rapporteur on the Strategic Plans Regulation Peter Jahr has described the new policy as ''the biggest paradigm shift in the CAP since 1992''.

The above of course constitutes a major milestone for the industry of clean fertilisers, since the new CAP will be put a bigger emphasis on the usage of more sustainable input materials.

The German Presidency and European Parliament are now set to convene during informal ‘trilogues’, in the presence of the European Commission, in order to reach an agreement on a joint text, even though it remains to be seen whether the dossier will be closed before end of the year 2020.