Transcript The “Health Check” of the CAP reform

The CAP after the Health Check
Agricultural Policy Analysis and Perspectives
DG for Agriculture and Rural Development
European Commission
 1.
The CAP today
 2.
The CAP until 2013
 3.
The CAP beyond 2013
AGRI-L1
CAP perspectives
2
1. 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 performing
–
–
–
AGRI-L1
Surpluses belong to the past
Competitiveness is improved
Better value for money
CAP perspectives
3
CAP expenditure and CAP reform path
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
2008
60
Export subsidies
Decoupled payments
AGRI-L1
Market support
Rural development
CAP perspectives
Direct aids
% of EU GDP
4
… and alternative views on its cost
CAP cost in 2008
(in absolute terms)
CAP cost in 2008
(in relative terms)
50%
120
100
80
40%
45.9% of
EU budget
30%
60
20%
40
0.43% of
EU GDP
10%
20
0%
0
% of GDP
Billion of euros
CAP expenditure
AGRI-L1
EU budget
CAP perspectives
CAP expenditure
All EU public expenditure
5
1. 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 performing
–
–
–
AGRI-L1
Surpluses belong to the past
Competitiveness is improved
Better value for money
CAP perspectives
6
Impact of CAP reforms on EU net production surplus
Net production surplus as % of consumption / Net exports as % of World exports
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
Wheat
Barley
Maize
Beef
Pork
Poultry
Net production surplus: 1990/94 ol avg
Net exports: 1990/94 ol avg
AGRI-L1
CAP perspectives
SMP
Butter
Cheese
Sugar
Net production surplus: 2004/08 ol avg
Net exports: 2004/08 ol avg
7
The evolving role of EU support prices - wheat
( in € per metric tonne )
250
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
AGRI-L1
EU common wheat market price
CAP perspectives
US (SRW Gulf)
8
The evolving role of EU support prices - beef
( in € per metric tonne )
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
AGRI-L1
EU safety net
CAP perspectives
EU market price
Argentina
9
The evolving role of EU support prices - butter
( in € per metric tonne )
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
AGRI-L1
EU market price
CAP perspectives
Oceania
10
The evolving role of EU support prices - SMP
( in € per metric tonne )
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
AGRI-L1
EU market price
CAP perspectives
Oceania
11
2. The 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
12
3. The CAP beyond 2013

General context
–
–
–

Volatility in production and prices
Economic crisis
Food security, climate change, limited resources
Institutional context
–
–
–
–
New European Parliament and Commission
Lisbon Treaty
WTO
New financial perspectives
•
•
AGRI-L1
New priorities for EU budget
Budget for CAP?
CAP perspectives
13
Recent trend of EU agricultural market prices
Source: DG AGRI (Agriview)
EUR/t for cereals; EUR/100 kg for beef and dairy
Commom wheat
AGRI-L1
Maize
Beef
CAP perspectives
SMP
Butter
May-09
Jan-09
Sep-08
May-08
Jan-08
Sep-07
May-07
Jan-07
Sep-06
May-06
Jan-06
Sep-05
May-05
Jan-05
Sep-04
May-04
Jan-04
Sep-03
May-03
Jan-03
Sep-02
May-02
Jan-02
Sep-01
May-01
Jan-01
Sep-00
May-00
Jan-00
500
450
400
350
300
250
200
150
100
50
0
Cheese
14
3. The CAP beyond 2013

General context
–
–
–

Volatility in production and prices
Economic crisis
Food security, climate change, limited resources
Institutional context
–
–
–
–
New European Parliament and Commission
Lisbon Treaty
WTO
New financial perspectives
•
•
AGRI-L1
New priorities for EU budget
Budget for CAP?
CAP perspectives
15
3. 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
–
–
2.
–
–
3.
–
–
4.
–
–
AGRI-L1
Income support vs. public goods
Redistribution within and among Member States
Market mechanisms
Safety net
Other instruments
Rural development
Balance between competition, environmental and rural economy challenges
The 3rd axis of RD an integral part of the CAP reform?
Financing
Distribution between pillars and areas
Co-financing
CAP perspectives
16
AGRI-L1
Status quo in 2016 (EUR/ha)
EU flat rate (EUR/ha)
CAP perspectives
EUR/ha
Latvia
Estonia
Romania
Lithuania
Bulgaria
Portugal
EU12
Poland
Slovakia
Spain
Austria
United Kingdom
Sweden
Finland
Czech Republic
EU27
Luxemburg
EU15
Slovenia
France
Hungary
Ireland
Italy
Germany
Cyprus
Denmark
Belgium
Netherlands
Malta
Greece
Average payments
EUR/ben.
600
48000
500
40000
400
32000
300
24000
200
16000
100
8000
0
0
Status quo in 2016 (EUR/beneficiary)
17
3. 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
–
–
2.
–
–
3.
–
–
4.
–
–
AGRI-L1
Income support vs. public goods
Redistribution within and among Member States
Market mechanisms
Safety net
Other instruments
Rural development
Balance between competition, environmental and rural economy challenges
The 3rd axis of RD an integral part of the CAP reform?
Financing
Distribution between pillars and areas
Co-financing
CAP perspectives
18
In a nutshell, CAP policy
questions...
Revenue insurance ?
Phase-out ?
Safety net
Adjusted SPS
Income
Markets
Direct payments
Price support/
Quotas reform
GAEC
Phase-out ?
Axis 1
(structural
adjustment)
Axis 2
(environment)
Rural development
Future ?
AGRI-L1
Axis 3
(territory and
diversification)
CAP perspectives
19
…and CAP budget
questions
Markets
Direct payments
Rural
Development
Modulation
AGRI-L1
CAP perspectives
20
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
AGRI-L1
CAP perspectives
21
Thank you
AGRI-L1
CAP perspectives
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