Over on the excellent VoxEU site, Thomas Hertel, Roman Keeney and Alan Winters try to answer the question why agricultural policy is so difficult to reform, as illustrated by the way in which difficulties in getting agreement on reduced agricultural support and protection has been one of the factors preventing progress in the Doha Round. They take issue with one justification for preserving rich countries’ agricultural protection that it helps poor farmers in the North while the benefits of liberalisation would go only to rich farmers in the South. … Read the rest
Options for milk quota reform
How to manage the transition to the phasing out of milk quotas is one of the items on the CAP Health Check agenda. A recent study from the FAPRI-Ireland team based in the Rural Economy Research Centre, Teagasc in Ireland has examined the impacts of two alternative transition paths to phasing out milk quotas by their expected date of elimination in 2014/15. … Read the rest
The health check paper: Homeopathy rather than surgery?
The recently leaked Commission Green paper sets the scene for the upcoming health check. What emerges at the moment is a very cautious and minimalist approach, in line with what the Commissioner has been promising for a while. Two things seem striking. The first is the choice to ignore the budget review debate. The second is the lack of courage in confronting the CAP’s failings.… Read the rest
US Farm Bill: the gloves are off
Will we in Europe soon be watching TV commercials like this one that is currently airing in the United States?
IEEP briefing on the CAP Health Check
An excellent briefing document on the likely direction of the CAP Health Check – and the political forces at play – has been published by the Institute for European Environment Policy (IEEP). To my mind it is the best overview available at this time and I’m delighted that IEEP experts Tamsin Cooper and Martin Farmer have recently joined the CAP Health Check blog. Read it here (PDF). There is also a short update following the leak of a DG Agriculture draft of the proposals due in November 2007. … Read the rest
More on who benefits from farm subsidies
Jack Thurston reviews some recent academic studies, including a recent paper by Stefan Kilian and Klaus Salhofer from the Technische Universität Munich, which make the point that much of the benefit of agricultural support policies does not end up in the hands of farmers who are its intended beneficiaries, but rather benefits landowners. However, my reading of the Kilian/Salhofer paper is that we need to be careful in applying this conclusion to the EU’s Single Farm Payment.
Kilian and Salhofer highlight the requirement in the EU Single Payment Scheme that a farmer must possess an entitlement in order to qualify for the payment.… Read the rest
Who benefits from farm subsidies: farmers or landowners?
One of the most contentious issues surrounding farm subsidies is how much of what is paid out actually finds its way into the pocket of the farmer, and how much leaks out into rents paid to landlords, prices charged by the companies selling seed, feed, machines, chemical fertilizers, pesticides and other inputs. … Read the rest
The environmental impact of ending set aside
Idling land resources through set aside never made a lot of economic sense and was largely a way of dealing with over production encouraged by the old style CAP. However, many environmentalists felt that set aside encouraged biodiversity. This was particularly the case for the Royal Society for the Protection of Birds (RSPB) which with over a million members, largely urban gardeners whose bird identification skills are sketchy, is a very influential conservationist group in the UK. Defra policy is strongly influenced by the RSPB which has framed the agenda in terms of, for example, using farmland bird populations as an indicator of environmental stress, although they may not the best measure.… Read the rest
More on capping direct payments
Much initial reaction to the Commission’s leaked Health Check proposals has focused on its renewed attempt to introduce a cap on the Single Farm Payment amount which an individual farmer can receive. In fact, the proposal does not amount to a cap in the sense of an absolute ceiling, but takes of the form of a tapered payment Farmers receiving between €100,000 and €200,000 would face a 10% cut, those receiving between €200,000 and €300,000, a 25% cut and those receiving over €300,000, a 45% cut. Jack Thurston’s blog yesterday highlights the limited impact the measure will have.
It might be useful to put the Commission’s proposal in some historical perspective.… Read the rest
Leaked proposals on subsidy payment limits: first analysis
Analysis of the Commission’s leaked proposals for the CAP Health Check show that the payment limitations proposal is significantly less ambitious than the proposal made during the Agenda 2000 (1999) and Mid-Term Review (2003) reforms of the CAP.… Read the rest