Alan Matthews

Economist
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Alan Matthews is Professor Emeritus of European Agricultural Policy in the Department of Economics at Trinity College, Dublin, Ireland. His major research interests are agricultural policy analysis, the impact of international trade on developing countries, and computable general equilibrium analysis of trade and agricultural policy reforms. He has worked as a consultant to the European Parliament, the OECD, the Food and Agricultural Organisation of the United Nations and the UN Industrial Development Organisation, and has been a panel member in a number of WTO Dispute Settlement procedures. He is a former President of the European Association of Agricultural Economists but writes here in a personal capacity.

Recent blog posts written by Alan Matthews

Health Check proposal on flat-rate Single Payment Scheme misunderstood

Many people are under the impression that the Commission’s Health Check Communication proposes that all Member States should move towards a flat rate regional single payment system. There is a widespread view that the Health Check would require those Member States which opted for the historic basis to begin to move towards a regional system [...]

CAP direct payments poor value for money

The major weakness of the Commission’s CAP Health Check Communication is its failure to spell out a rationale for maintaining the Single Farm Payment after 2013. Yet another report, this time commissioned by the European Parliament’s Committee on Budgetary Control, lambasts the lack of efficient targeting and ensuing excessive cost of the SFP system. Written [...]

Limited administrative burden of the Single Farm Payment

Economists have long been interested in the costs associated with policies transferring income support to farmers. These costs include not only the resource costs associated with distorting production and consumption choices away from the market optimum (assuming that market prices fully reflect the social value placed on resources and outputs), but also the transactions costs [...]

Specious arguments against limiting payments to largest farms

Initial media reaction to the Commission’s Health Check proposals has been predictable, with most papers picking up as the lead story the Commission’s proposal to apply a tapering reduction to direct payments to larger farms. The Financial Times story was headlined “Communists and royalty fight farm subsidy cuts.” Much was made of the fact that [...]

Why agricultural policy reform is so difficult

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. [...]

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 [...]

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 [...]

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 [...]

Commission’s CAP Health Check proposals leaked

The Commission’s draft proposals for the CAP Health Check due to be officially released in November have now been widely leaked in the agricultural press (see the UK Farmers Guardian for one summary). Much initial reaction has focused on the Commission’s renewed attempt to introduce a cap on the Single Farm Payment amount which an [...]

Council agrees reform of the sugar reform

The Council agreed yesterday the Commission’s proposals to improve the attractiveness of the sugar industry restructuring scheme in order to meet the Commission’s objective of a reduction in 6 million tonnes of sugar quota by the end of the four year transition period 2006-2010 for the current EU sugar reform. As noted in a previous [...]

Why farmers in the New Member States love the CAP

Jerzy Wilkin of Warsaw University in a recent paper has summarised the agricultural experience in the New Member States (NMS) under the CAP since they joined the EU in 2004. One of the points he highlights is the change in attitudes among farmers to the EU particularly in Poland, the largest of the New Member [...]

Danish parliament unanimously calls for elimination of CAP support

Some Danish colleagues told me recently that the Danish Parliament on 30 May last unanimously passed a resolution requiring the Danish government to propose a strategy for how it would actively work for the elimination of EU agricultural support. The strategy should include a timeframe and plan of activities which should take into account the [...]

Prospect for milk quota increases next year

The UK Farmers Guardian reports that Mrs Fischer Boel was forced to confirm that allowing an increase in milk production would be addressed as part of the Commission’s Health Check proposals expected in November after Germany raised concerns about rising retail prices. The Commission has a number of options, including an annual market-linked increase in [...]

Australian report raises queries on CAP reform

The Australian Bureau of Agricultural and Resource Economics (ABARE) has long been a consistent critic of the CAP. In its latest report The European Union’s Agricultural Policy: A Stocktake of Reforms it acknowledges the EU’s reform efforts to date, but highlights areas where more needs to be done. Its main conclusion is that, while the [...]

Biofuels come to rescue of EU sugar market in medium-term

DG Agri published its annual Prospects for Agricultural Markets and Income in the EU for the period 2007 through 2014 at the end of July. In this post I discuss the Commission’s latest view on the outlook for the EU sugar market. The EU’s sugar market reform agreed in November 2005 has been less than [...]

Growth rates for global food demand set to fall

In a previous post, I discussed the significance of the current buoyant markets for dairy products for the likely success in pursuing further reform of the EU dairy regime. The insight that world market conditions may influence the trajectory of CAP reform can also be extended to other CAP regimes. Producers have not been as [...]

Importance of direct payments in Irish farm income by farming system

Irish farmers now totally dependent on direct payments for their income

The dependence of Irish farm incomes on the Single Farm Payment and other direct payments was starkly revealed by the publication of the 2006 results of the annual National Farm Survey (NFS) this week. Fully 98% of Family Farm Income (FFI) on Irish farms in 2006 was derived from the Single Farm Payment and other [...]

Good prospects for dairy reform

A particular milestone in the CAP was passed last month when the European Commission set export refunds on dairy products to zero for the first time ever in the management of the EU dairy regime. This reflects the extraordinary jump in world market prices for milk products in the past twelve months, with prices for [...]

Set-aside: ensuring the environmental benefits

Ariel Brunner in a recent post lamented the fact that the EU has proposed to set the rate of compulsory set-aside to 0% for the 2008 harvest without putting in place alternative measures to secure the environmental benefits which set-aside land provides. The reason why the decision only concerns autumn 2007 and spring 2008 sowings [...]

Less likelihood of cuts in Single Farm Payment

The Irish Farmers’ Journal reports that the value of the Single Farm Payment (SFP) is not likely to be greatly eroded by “financial discipline” cuts in order to accommodate the payments to new Member States within the European Union. This is because more buoyant farm prices mean that there will be huge cuts in the [...]

UK data on distribution of farm payments

The UK Department for Environment, Food and Rural Affairs (DEFRA) Agricultural Change and Environment Observatory recently published a statistical analysis of the breakdown of the Single Farm Payment (SFP) in England, one of the four regions for the purposes of administering the SFP scheme in the UK. The report analyses 2005 payments, with some historical [...]

CAP policy instruments and policy goals: cause or effect?

Fellow blogger Wyn Grant presented a paper in Paris last month which presents a wide-ranging overview of the changes in CAP policy instruments since its inception to the present day. His basic thesis is that over time the instruments have changed much more than the objectives and that this does reflect a shift in the [...]