Court of Auditors criticises sugar reform

The European Court of Auditors today released a report reviewing the outcome of the 2006 sugar regime reform. The Court makes some criticisms of the design of the 2006 reform, but more important are its findings and recommendations which are likely to feed into the debate on the shape of the CAP post-2013. Here the report manages to give ammunition to both CAP reformers and diehards, and if early reactions in my own Irish media are any guide it is the more reactionary views which are getting the media spin.

The Court notes that one objective of the reform was to contribute to a more competitive sugar industry, and that this was to be achieved by concentrating quota reductions in the least competitive areas.

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French environment ministry coming out in favour of a green CAP

In a smart move, the Ministry proposes to keep the current €10 billion CAP budget for France – thus making the proposals more appealing to its domestic audience – and it uses the budget issue as a stick/carrot: a large budget can only be justified for a green CAP.

The money is allocated to several instruments (doing away with the traditional two-pillar structure):

* €3 billion for direct income support, available to all farmers in the EU at an equal level, without any historic base. National governments could have the possibility to top up these payments. A flexible component could be introduced to soften fluctuation in prices and regional yields.

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Battle heats up on indirect land use change effects of biofuels

The EU renewables target of 10% of transport fuel by 2020 to be met mainly by biofuels has been heavily criticised for its potential impact on diverting land from food to fuel production and thus putting upward pressure on food prices. Another source of criticism is whether it does actually contribute to reducing overall greenhouse gas (GHG) emissions. The Commission sought to deflect this latter criticism by requiring that biofuels which count against the renewables target must show a direct GHG saving of 35% compared to the fossil fuel that they displace. This saving requirement is gradually increased to 50% and 60% for fuels produced by installations that start production after 2017 and 2018, respectively.

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The CAP and semi-subsistence farmers

One result of the last two enlargements in 2004 and 2007 was to bring millions of small farms into the EU, most of which are either subsistence farms (SFs) or semi-subsistence farms (SSFs). Various definitions of what is a subsistence or semi-subsistence farm exist (see the background paper on this topic by Sophia Davidova and colleagues for the recent seminar in Sibiu, Romania on semi-subsistence farming) including physical area (e.g. less than 5 ha), size of farm business (below a certain ESU threshold) or market orientation (share of production going to own consumption).

According to Eurostat FSS, in 2007 there were 11.1

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For an Ambitious Reform of the Common Agricultural Policy

In late 2009, leading agricultural economists from all over Europe issued a declaration on ‘A Common Agricultural Policy for European Public Goods’. They proposed the abolition of market intervention and blanket income support to farmers, and outlined a more efficient, greener CAP. Since then, DG Agriculture, the European Parliament and many member states have adopted positions that closely stick to the status quo. Now a new declaration ‘For an Ambitious Reform of the Common Agricultural Policy’ has been published. All European economists who work on agricultural policy issues are invited to join the declaration online.

The declaration states:

The need for ambitious CAP reform: The Common Agricultural Policy (CAP) fails to adequately fulfill important societal objectives: to enhance biodiversity and climate protection, improve water quality, preserve scenic landscapes, increase animal welfare, promote innovative, efficient farming and fair competition in the internal market, and avoid harming farmers abroad.

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EU budget review cautious on future spending priorities

The Commission has published its long-delayed budget review which follows a public consultation on the EU budget which began as a mid-term budget review in 2008-09. An earlier version leaked last year, and apparently drafted by Commission President Barroso’s advisers (see Jack Thurston’s post on this), recommended specific targets for the reallocation of EU spending, including a reduction in agricultural spending to around one-third of the budget.

The review published today is a more anodyne document, and it shies away from making specific recommendations on which expenditure areas might see their budgets cut. In this it closely resembles the leaked document on CAP reform put into the public domain earlier this month and which also summarises the conclusions of a public consultation.

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Commission leaked draft fails to advance reform debate

The draft Commission communication on the CAP towards 2020 is an underwhelming document, not just for those seeking to push an ambitious reform agenda but also for those seeking a roadmap to address issues that the Commissioner himself has identified as up for discussion. As Mairead McGuinness, the Irish MEP, commented, it lacks both detail and substance, and is devoid of both figures and analysis.

Nonetheless, it does contain some clues on what DG Agri might like to see in the final package, however cautiously they are expressed. The language used does nudge the debate on the future CAP in slightly different directions to the current CAP.

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The circle that cannot be squared

An extended guest post by Jorge Núñez Ferrer , takes a close look at the leaked commission communication on the future of the CAP. Dr Núñez Ferrer (pictured, right) is Associate Research Fellow at the Centre for European Policy Studies and has written widely on the CAP and the EU budget

The CAP 2020 reform philosophy has finally seen the light, albeit only in leaked form. A carefully drafted document contains the usual CAP rhetoric punctuated by some apparently strong deviations from past doctrine. But once the objectives and policy proposals are reduced to their basic components, much of the fizz disappears.

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The Commission communication leak in full

PDF to download. Main text (without footnotes and annex):

EUROPEAN COMMISSION

Brussels, 2910912010
COM(2010) version finale

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future

1. INTRODUCTION

The Common Agricultural Policy (CAP) is confronted with a set of challenges, some unique in nature, and most unforeseen, that invite the EU to make a strategic choice for the longterm future of its agriculture and rural areas.

In preparation for this Communication, the Commission organised an extensive public debate earlier in 2010 that concluded with a conference in July 20101¥ The Council discussed during four successive Presidencies the reform, the European Parliament (EP) adopted an own initiative report on the post-2013 CAP, and its link with the Europe 2020 Strategy and both the Economic and Social Committee and the Committee of the Regions (CoR) have come forward with position papers.

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Rural development & regional policies

RuDI stands for “Rural Development Impacts” and is a consortium of 10 research institutes that has taken an in-depth look at the second pillar of the CAP, examining the rural development programs in all member states and conducting 20 case studies. In addition to calling for more effective use of policy evaluation and bottom-up processes (LEADER), they take issue with the excessive concentration of rural development on agriculture and insufficient integration with other regional policies.
They observe – and endorse – an emerging “new rural paradigm” which

is based on the notion of the multifunctionality of rural areas, where various sectors beyond agriculture are acknowledged to play a key role with regard to rural areas’ competitiveness, and where investments across sectors are considered to be a more appropriate tool than farm subsidies alone.

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