The CAP after the Health Check Agricultural Policy Analysis and Perspectives DG for Agriculture and...
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The CAP after the Health CheckThe CAP after the Health Check
Agricultural Policy Analysis and Perspectives
DG for Agriculture and Rural Development
European Commission
AGRI-L1 CAP perspectives 2
1. The CAP today
2. The CAP until 2013
3. The CAP beyond 2013
AGRI-L1 CAP perspectives 3
1. The CAP today1. The CAP today
A substantially reformed policy …– Farm support is mainly decoupled and subject to cross-compliance
– Role of market intervention mechanisms is significantly reduced
– Rural Development policy is strengthened with funds and policy instruments
… … and better performingand better performing– Surpluses belong to the pastSurpluses belong to the past
– Competitiveness is improvedCompetitiveness is improved
– Better value for moneyBetter value for money
AGRI-L1 CAP perspectives 4
CAP expenditure and CAP reform pathCAP expenditure and CAP reform path
0
10
20
30
40
50
60
70
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
% GDPbillion €
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
Export subsidies Market support Direct aidsDecoupled payments Rural development % of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27
AGRI-L1 CAP perspectives 5
0%
10%
20%
30%
40%
50%
% of GDP
CAP expenditure All EU public expenditure
… … and alternative views on its costand alternative views on its cost
0
20
40
60
80
100
120
Billion of euros
CAP expenditure EU budget
CAP cost in 2008 (in relative terms)
CAP cost in 2008 (in absolute terms)
0.43% ofEU GDP
45.9% of EU budget
AGRI-L1 CAP perspectives 6
1. The CAP today1. The CAP today
A substantially reformed policy …A substantially reformed policy …– Farm support is mainly decoupled and subject to cross-complianceFarm support is mainly decoupled and subject to cross-compliance
– Role of market intervention mechanisms is significantly reducedRole of market intervention mechanisms is significantly reduced
– Rural Development policy is strengthened with funds and policy instruments Rural Development policy is strengthened with funds and policy instruments
… and better performing– Surpluses belong to the past
– Competitiveness is improved
– Better value for money
AGRI-L1 CAP perspectives 7
Impact of CAP reforms on EU net production surplusImpact of CAP reforms on EU net production surplus
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Wheat Barley Maize Beef Pork Poultry SMP Butter Cheese Sugar
Net production surplus as % of consumption / Net exports as % of World exports
Net production surplus: 1990/94 ol avg Net production surplus: 2004/08 ol avgNet exports: 1990/94 ol avg Net exports: 2004/08 ol avg
AGRI-L1 CAP perspectives 8
The evolving role of EU support prices - wheat The evolving role of EU support prices - wheat
0
50
100
150
200
250
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
( in € per metric tonne )
EU intervention price EU common wheat market price US (SRW Gulf)
AGRI-L1 CAP perspectives 9
The evolving role of EU support prices - beef The evolving role of EU support prices - beef
0
500
1000
1500
2000
2500
3000
3500
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
( in € per metric tonne )
EU intervention price EU safety net EU market price Argentina
AGRI-L1 CAP perspectives 10
The evolving role of EU support prices - butterThe evolving role of EU support prices - butter
0
500
1000
1500
2000
2500
3000
3500
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
( in € per metric tonne )
EU intervention price EU market price Oceania
AGRI-L1 CAP perspectives 11
The evolving role of EU support prices - SMPThe evolving role of EU support prices - SMP
0
500
1000
1500
2000
2500
3000
3500
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
( in € per metric tonne )
EU intervention price EU market price Oceania
AGRI-L1 CAP perspectives 12
2. 2. The CAP until 2013The CAP until 2013
“Health Check” – fine tuned the reform process
Direct aids
– Further decoupling
– MS allowed to move to flatter rates of support
– New article “68” • Targeted measures to economic/environmental disadvantages in certain regions/sectors• Risk management measures
Market mechanisms
– Increase milk quotas by 1% annually
– Intervention streamlined and simplified
Rural development
– “New challenges” (Climate change, bioenergy, water management, biodiversity, innovation, dairy)
– Modulation increase
AGRI-L1 CAP perspectives 13
3. The CAP beyond 20133. The CAP beyond 2013
General context– Volatility in production and prices
– Economic crisis
– Food security, climate change, limited resources
Institutional context Institutional context – New European Parliament and CommissionNew European Parliament and Commission
– Lisbon TreatyLisbon Treaty
– WTOWTO
– New financial perspectivesNew financial perspectives• New priorities for EU budgetNew priorities for EU budget• Budget for CAP?Budget for CAP?
AGRI-L1 CAP perspectives 14
Recent trend of EU agricultural market pricesRecent trend of EU agricultural market prices
EUR/t for cereals; EUR/100 kg for beef and dairy
0
50
100
150
200
250
300
350
400
450
500
Jan-
00
May
-00
Sep-
00
Jan-
01
May
-01
Sep-
01
Jan-
02
May
-02
Sep-
02
Jan-
03
May
-03
Sep-
03
Jan-
04
May
-04
Sep-
04
Jan-
05
May
-05
Sep-
05
Jan-
06
May
-06
Sep-
06
Jan-
07
May
-07
Sep-
07
Jan-
08
May
-08
Sep-
08
Jan-
09
May
-09
Source: DG AGRI (Agriview)
Commom wheat Maize Beef SMP Butter Cheese
AGRI-L1 CAP perspectives 15
3. The CAP beyond 20133. The CAP beyond 2013
General contextGeneral context– Volatility in production and pricesVolatility in production and prices
– Economic crisisEconomic crisis
– Food security, climate change, limited resourcesFood security, climate change, limited resources
Institutional context – New European Parliament and Commission
– Lisbon Treaty
– WTO
– New financial perspectives• New priorities for EU budget• Budget for CAP?
AGRI-L1 CAP perspectives 16
3. The CAP beyond 2013: the debate3. The CAP beyond 2013: the debate
Do we need the “C” and the “P” of the CAP? Current structure (I and II pillar)? If yes
1. Direct payments– Income support vs. public goods
– Redistribution within and among Member States
2.2. Market mechanismsMarket mechanisms– Safety net Safety net
– Other instrumentsOther instruments
3.3. Rural development Rural development – Balance between competition, environmental and rural economy challengesBalance between competition, environmental and rural economy challenges
– The 3rd axis of RD an integral part of the CAP reform?The 3rd axis of RD an integral part of the CAP reform?
4.4. FinancingFinancing – Distribution between pillars and areasDistribution between pillars and areas
– Co-financingCo-financing
AGRI-L1 CAP perspectives 17
Average payments
0
100
200
300
400
500
600
Gre
ece
Mal
ta
Net
herla
nds
Bel
gium
Den
mar
k
Cyp
rus
Ger
man
y
Ital
y
Irel
and
Hun
gary
Fra
nce
Slo
veni
a
EU
15
Luxe
mbu
rg
EU
27
Cze
ch R
epub
lic
Fin
land
Sw
eden
Uni
ted
Kin
gdom
Aus
tria
Spa
in
Slo
vaki
a
Pol
and
EU
12
Por
tuga
l
Bul
garia
Lith
uani
a
Rom
ania
Est
onia
Latv
ia
EUR/ben.EUR/ha
0
8000
16000
24000
32000
40000
48000
Status quo in 2016 (EUR/ha) EU flat rate (EUR/ha) Status quo in 2016 (EUR/beneficiary)
AGRI-L1 CAP perspectives 18
3. The CAP beyond 2013: the debate3. The CAP beyond 2013: the debate
Do we need the “C” and the “P” of the CAP?Do we need the “C” and the “P” of the CAP? Current structure (I and II pillar)? If yesCurrent structure (I and II pillar)? If yes
1.1. Direct paymentsDirect payments– Income support vs. public goodsIncome support vs. public goods
– Redistribution within and among Member StatesRedistribution within and among Member States
2. Market mechanisms– Safety net
– Other instruments
3. Rural development – Balance between competition, environmental and rural economy challenges
– The 3rd axis of RD an integral part of the CAP reform?
4. Financing – Distribution between pillars and areas
– Co-financing
AGRI-L1 CAP perspectives 19
In a nutshell, CAP policy In a nutshell, CAP policy questions...questions...
Direct payments
Adjusted SPS
GAEC
Markets
Price support/Quotas reform
Safety net
Rural development
Axis 1(structural
adjustment)
Axis 2(environment)
Axis 3(territory and
diversification)
Phase-out ?Revenue insurance ?
Phase-out ?
Income
Structural
adjustment
Public
goods
Future ?
AGRI-L1 CAP perspectives 20
RuralDevelopment
Direct payments
Markets
Pillar I
Pillar II
Post-2013 BUDGET ??
… …and CAP budget and CAP budget questionsquestions
Modulation
AGRI-L1 CAP perspectives 21
For further informationFor further information
CAP Health Check http://ec.europa.eu/agriculture/healthcheck/index_en.htm
EU agriculture and CAP reformhttp://ec.europa.eu/agriculture/index_en.htm
Economic Analysis and Evaluation http://ec.europa.eu/agriculture/analysis/index_en.htm
Agricultural Policy Analysis and Perspectiveshttp://ec.europa.eu/agriculture/analysis/perspec/index_en.htm
AGRI-L1 CAP perspectives 22
Thank youThank you