Author: Attila Jambor

Representatives of nine Central European Chambers of Agriculture gathered in Budapest in 28-29 November 2011 to have a discussion on the latest proposals of the European Commission on the future of the CAP. By the end of the meeting, a Joint Declaration has been signed, expressing the interests of the New Member States (NMS) in the future of the CAP.

The Declaration starts with the strong statement that the accession had an overall negative impact on NMS agriculture as its size and power has lost ground. Therefore the declaration clearly states that NMS have expected fundamental changes in the design of the CAP post-2013 and are highly disappointed with the recent proposals of the Commission.… Read the rest

EU agricultural real income per worker has increased by 6.7% in 2011 compared to 2010 levels, according to initial estimates issued by Eurostat in 20 December 2011. This increase results from a rise in real agricultural income (+3.9%), due to higher commodity prices, together with a decline in the number of farm workers (-2.7%). Therefore it seems that the economic & food crisis together was beneficial for farm incomes in 2011. The first estimates also reveal that between 2005 and 2011, EU27 real agricultural income per worker have also increased (+18.3%), while agricultural labour input has fallen (-15.2%). Thereby it seems there is something like a longer trend here, underpinned by detailed country level data.… Read the rest

The 6-month tenure of the Polish Presidency came to an end in 31 December 2011. Although the Polish Presidency will mainly be remembered for finalising the EU Budget 2012 & adopting the ‘six-pack’ agreement, it also had some important results for agriculture. Such results include the informal agreement on the EU dairy package, the temporary solution for the ‘Aid for the Needy’ scheme for 2012 and 2013, the unanimous decision on the Green Paper on promotion measures and information provision for agricultural products, the compromise reached on biocides being more environmentally friendly and safer for user and the success of the Durban Climate Conference.… Read the rest

Latest proposals of the European Commission seems to maintain the two-pillar structure of the CAP, in which Pillar 1 finances direct payments as well as market measures while Pillar 2 funds rural development measures. The clear separation of objectives between the two Pillars is now somewhat blurred by the latest proposals. It seems that Pillar 1 funds can be used for measures traditionally addressed by rural development funds (e.g. payments to the provision of public goods), creating the need for raising Pillar 1 funds partly by a backward modulation (i.e. transferring funds from Pillar 2 to Pillar 1). This argument stands on dubious theoretical grounds as each and every communication since 2000 was in favour of transferring funds to rural development and easing the currently unequal financial distribution between the pillars.… Read the rest

The term public goods first entered into the CAP debate in 2007 when it was used in an agricultural context by the environmental NGOs. Since then it has gradually infiltrated the mainstream policy debate appearing in many papers and speeches from research papers to the highest level of decision making. The need for securing mainly environmental public goods in the future CAP is echoed by an increasing number of stakeholders, rallying behind the slogan of “Public Money for Public Goods”, developed by Zahrnt (2009). Becoming the primary focus, the concept is now used more generally to refer to any sort of public benefit from agriculture, thereby justifying the need for public support, as expressed by various stakeholders.… Read the rest

Despite the numerous critiques of direct payments expressed in the vast majority of the professional literature analysing the future of the CAP, the European Commission seems to maintain them in the future. In order to justify the decision, the EC has found out a new slogan for saving this ineffective policy instrument –  the provision of public goods.

However, this is not the first time in history when the Commission searches for justifications in order to save direct payments. Founded in 1992, the original idea behind direct payments was to compensate farmers for the price cuts of the MacSharry reform. This can be treated as an economic justification for the instrument as farmers, at least to the Commission, will be better off with this support than without them.… Read the rest