Transcript The “Health Check” of the CAP reform: Legislative proposals

Assessing the Impact of CAP Reforms:
policy issues and research challenges
AgSAP Conference
Egmond aan Zee, 10-12 March 2009
Tassos Haniotis
Head of Unit, Agricultural Policy Analysis and Perspectives
DG for Agriculture and Rural Development
European Commission
Outline
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Recent experiences with Research and the CAP policy agenda

The CAP reform process in perspective

Key policy questions in the CAP policy debate

Challenges and opportunities for Research
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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The HC Impact Assessment experience
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The starting point
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Developing the policy options
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Description of existing policies and situation
Identification of issues to be addressed in the HC
Status-quo used as reference scenario (“baseline”)
The scope of alternative options (the selection process)
Limitations and constraints (the political context)
Impact analysis and results
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Main IA Report and its characteristics
Background and the various Annexes
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T. Haniotis
The role of internal AGRI analysis
The role of external studies and evaluations (the role of Scenar2020)
AgSAP – Egmond aan Zee, 10-12 March 2009
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The analytical tools of the Impact Assessment
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The scope of quantitative analysis
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Econometric models to assess impact on markets from:
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Microeconomic static analysis to assess impact on farm margins from:
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further decoupling
impact from market measures (cereals, dairy)
flatter rates and payment limitations
Statistical analysis to assess impact from:
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•
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changes in cereal intervention and set-aside abolition
phasing-out of dairy quotas
payment limitations and modulation
risk management tools
The scope of qualitative analysis
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To assess the impact of changes in cross-compliance
To assess suitability of RD measures related to new challenges
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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Lessons from the HC Impact Assessment
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Extent and scope
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Methodology
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Limitations of scope driven by relevant institutional realities
Same realities need to be addressed by Research Community
Qualitative assessment more “popular” to policy makers
Quantitative analysis requires clear, updated baseline
Link of legal proposals to results much stronger than ever before
Dissemination of results
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–
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External studies form integral part of IA
AGRI analysis often ignored by Research Community
Policy relevance of results essential
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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The CAP reform process in perspective
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The recent past: CAP radically reformed its policy orientation
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The present context
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Mainly decoupled direct support, subject to a “baseline” (cross-compliance)
Significantly reduced price intervention mechanisms
More targeted Rural Development policy (both funds and policy instruments)
Significant increase/decline in food prices re-focused attention on agriculture
“Health Check” policy questions relevant to future CAP reform process
The debate about the future of the CAP
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The balance between the “C” and the “P” of the CAP and its link to the EU budget
Main impact of no policy was found to be territorial and environmental (Scenar2020)
Balance between “two pillars” and three axes of the CAP at the core of debate
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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Where do we go from here?
70
% GDP
billion €
EU-10
EU-12
EU-15
EU-25
EU-27
0,7%
0,6%
50
0,5%
40
0,4%
30
0,3%
20
0,2%
10
0,1%
0
0,0%
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
60
Export subsidies
Decoupled payments
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Market support
Rural development
AgSAP – Egmond aan Zee, 10-12 March 2009
Direct aids
% of EU GDP
7
Key policy questions for the future CAP debate
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Market prospects and issues related to product safety-nets
–
–

Direct support and issues related to producer safety-nets
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–
–
–

Challenges from the economic crisis and its long-term impact
Instruments of safety-net intervention and their relevance
Rebalancing support within and among Member States
Extent and scope of income support
Targeting of support for public goods and its link to a “baseline”
The relationship between private goods and public goods and the issue of “jointness”
Adjustment challenges and the reform process
–
–
The three axes of RD policy and the nature of their link with other CAP instruments
Balance and tensions between competitiveness, environment and the rural economy
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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The evolving role of EU support prices - wheat
( in € per metric tonne )
250
Beginning of reform
200
150
100
50
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
EU intervention price
EU common wheat market price
Note: Years are marketing years.
T. Haniotis
US (SRW Gulf)
Sources: DG AGRI and Global Insight (IMF).
AgSAP – Egmond aan Zee, 10-12 March 2009
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The evolving role of EU support prices - butter
( in € per metric tonne )
4000
Beginning of reform
3500
3000
2500
2000
1500
1000
500
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
EU intervention price
EU market price
Note: Years are marketing years.
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
Oceania
Sources: DG AGRI and FAO.
10
Potential impact of an EU-wide revenue scheme
b illion €
% of farms
45
15
36
12
27
9
18
6
9
3
0
0
1992
1993
1994
1995
estimated compensation
T. Haniotis
1996
1997
1998
1999
2000
2001
2002
2003
farms exceeding 30% income variation
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Key policy questions for the future CAP debate

Market prospects and issues related to product safety-nets
–
–

Direct support and issues related to producer safety-nets
–
–
–
–

Challenges from the economic crisis and its long-term impact
Instruments of safety-net intervention and their relevance
Rebalancing support within and among Member States
Extent and scope of income support
Targeting of support for public goods and its link to a “baseline”
The relationship between private goods and public goods and the issue of “jointness”
Adjustment challenges and the reform process
–
–
The three axes of RD policy and the nature of their link with other CAP instruments
Balance and tensions between competitiveness, environment and the rural economy
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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Average level of farm direct payments in the EU-25
Source: AGRI-L1 calculations from DG AGRI, DG Budget data
22 000
20 000
UK
FR
Direct aid (EUR) per beneficiary
18 000
LU
16 000
CZ
DE
DK
BE
14 000
12 000
NL
IE
10 000
SK
SE
8 000
6 000
ES
200
100
0
FI
AT
300
4 000
400
500
HU
EE
LV
EL
PT
PL SI
MT
LT
CY
700
600
2 000
IT
0
Direct aid (EUR) per ha UAA
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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Share of EU payments in GDP - 2007
% of GDP
Actual data
5%
4%
3%
2%
1%
0%
Market support
Direct payments
EU-15
T. Haniotis
Rural development
Structural actions
EU-12
AgSAP – Egmond aan Zee, 10-12 March 2009
Total
EU-27
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Key policy questions for the future CAP debate

Market prospects and issues related to product safety-nets
–
–

Direct support and issues related to producer safety-nets
–
–
–
–

Challenges from the economic crisis and its long-term impact
Instruments of safety-net intervention and their relevance
Rebalancing support within and among Member States
Extent and scope of income support
Targeting of support for public goods and its link to a “baseline”
The relationship between private goods and public goods and the issue of “jointness”
Adjustment challenges and the reform process
–
–
The three axes of RD policy and the nature of their link with other CAP instruments
Balance and tensions between competitiveness, environment and the rural economy
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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Challenges and opportunities for Research
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Commonality of issues analysed, diversity of approaches
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The uneasy relationship between methodology and results
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The policy relevance of addressed questions
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Communication of results
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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Challenges and opportunities for Research
Thank You !
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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For further information

CAP Health Check
http://ec.europa.eu/agriculture/healthcheck/index_en.htm

EU agriculture and CAP reform
http://ec.europa.eu/agriculture/index_en.htm

Economic Analysis and Evaluation
http://ec.europa.eu/agriculture/analysis/index_en.htm

Agricultural Policy Analysis and Perspectives
http://ec.europa.eu/agriculture/analysis/perspec/index_en.htm
T. Haniotis
AgSAP – Egmond aan Zee, 10-12 March 2009
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