What is being negotiated?

Negotiating chapter 11, Montenegro aligns with the Common Agricultural Policy (CAP) of the European Union (EU). This policy is one of the most complex and significant EU policies, both in terms of the scope of its legal framework and the funds allocated from the overall EU budget for this area. Specifically, the funds allocated for agricultural policy make up almost 40% of the total EU budget, which clearly shows the importance of this policy. The CAP aims to ensure the sustainable development of agriculture and rural areas. Its key objectives include increasing agricultural productivity through innovation and efficient resource use, ensuring stable food supply, providing fair living standards for farmers, and stabilizing agricultural product markets. Additionally, the CAP aims to ensure affordable and quality food for consumers, protect the environment through sustainable practices, and foster rural development.

Subareas?

The EU legal framework related to negotiation chapter 11 is divided into the following subareas: horizontal issues, common market organization, state aid, rural development, quality policy, and organic production.

The CAP goals are achieved through two pillars. The first pillar deals with direct payments and common market organization, while the second pillar focuses on rural development policy. Direct payments represent the largest expenditure under the CAP, and their main purpose is to support agricultural holdings and stabilize markets, ensuring equal conditions for the placement of agricultural products in the EU’s single market. The rural development policy, through support for economic and social activities in rural areas, aims to improve the quality of life. Measures under the first pillar are fully financed from the EU’s common budget and are paid directly to farmers (except for certain measures within the common market organization), while measures under the second pillar are co-financed from national budgets.

For proper implementation of the CAP, numerous requirements must be met. For the first pillar, it is necessary to establish the required infrastructure and strengthen administrative structures such as the Payments Agency, which will process applications, make payments, maintain records of payments and controls, and ensure the submission of documents in accordance with EU standards, as well as the Integrated Administration and Control System (IACS). For the second pillar, an efficient administration is needed to ensure the application of rules in implementing rural development measures, as well as to assess the effectiveness and quality of rural development policy implementation. Additionally, it is necessary to identify the needs of rural areas, develop, implement, and manage programs, monitor, report, control, and evaluate the programs and measures within them.

When was the chapter opened?

Negotiation Chapter 11 – Agriculture and Rural Development was opened at the Intergovernmental Conference held on December 13, 2016, in Brussels.

Opening benchmarks?

Montenegro had one opening benchmark in Chapter 11:

Montenegro must present the European Commission with a comprehensive national strategy for agriculture and rural development along with an Action Plan, which serves as the basis for transposing, implementing, and executing the EU acquis. The Action Plan includes, among other things, the development of a system for the identification of agricultural parcels and a unique identification system for farmers to prepare for the management and control of agricultural payments. The Government of Montenegro adopted the National Strategy for Agriculture and Rural Development, including the Action Plan for aligning with the EU acquis, on June 25, 2015, thereby meeting the condition for the initial benchmark, which was officially confirmed on March 2, 2016.

Closing benchmarks?

In Chapter 11, Montenegro is obligated to fulfill the following closing benchmarks:

• Montenegro must submit an implementation plan for establishing the Integrated Administration and Control System (IACS), which must be fully operational by the accession date. The plan must include all future actions necessary for the complete establishment of each component of the system and their integration, including a presentation of the current situation, future goals with clear timelines for implementation, plans for enacting missing legislation, precise estimates of required budgetary resources and human capacity, as well as identifying potential shortcomings and proposing appropriate solutions. Montenegro must demonstrate satisfactory progress in establishing the IACS, including the establishment of the Land Parcel Identification System (LPIS).
• Montenegro must also submit an implementation plan for establishing the Payments Agency, which must be fully operational by the date of accession. Considering standards regarding independence, reliability, accountability, and sound financial management, the plan should include an overview of the current situation, future goals with clear timelines for implementation, plans for enacting missing legislation, precise estimates of required budgetary resources and human capacity, including training plans, and identification of potential shortcomings with proposed solutions. Montenegro must demonstrate satisfactory progress in establishing the Payments Agency.

Given that the IACS is directly related to the establishment of the Payments Agency, and at the suggestion of the European Commission (EC), these two benchmarks are considered as one. For fulfillment, Montenegro is preparing a single document.

What activities are expected in the near future?

In the near future, Montenegro is expected to adopt the Implementation Plan for establishing the Payments Agency and Integrated Administration and Control System (IACS). Additionally, Montenegro is working on developing the necessary infrastructure and strengthening the administrative capacities of the future Payments Agency.

What is the benefit for Montenegro from this chapter?

Montenegrin producers will receive significant support and greater market stability by joining the EU. One of the key advantages of the CAP is long-term financing within seven-year programming cycles, with pre-defined subsidy amounts for beneficiaries. This support is provided through two main EU funds: the European Agricultural Guarantee Fund (EAGF), which finances direct payments and market stabilization, and the European Agricultural Fund for Rural Development (EAFRD), which co-finances measures for the modernization of agriculture, infrastructure development, and the sustainability of rural communities. This way, farmers and other participants in the production, processing, and marketing of food can have stability in planning and running their businesses.

Support for small holdings is an important aspect of the CAP where the EU provides mechanisms that facilitate their development and sustainability through specific programs tailored to their needs. Additionally, subsidies for introducing and complying with EU standards in areas such as quality, food safety, organic production, and environmental protection further strengthen the position of farmers in both domestic and international markets.

Also, common claims about restricting the increase in production are incorrect. On the contrary, the EU actively supports increased production and competitiveness while respecting regional specificities and traditions, allowing local producers to improve their capacities and products while maintaining authenticity.

In addition to financial support, EU membership brings technical, expert, and infrastructural assistance through training programs, exchange of experiences, and partnerships with agricultural producers and institutions from other EU member states. This contributes to the long-term sustainability and development of agriculture and rural communities.