Two indicators, little in common, same name: Market Price Support

We are pleased to welcome this guest post by Lars Brink, who is an independent advisor working from Canada.

This post examines the concepts and calculations of the two different agricultural policy indicators called Market Price Support (MPS): the one is used by the Organization for Economic Cooperation and Development (OECD) in its measurement of producer support in its Producer Support Estimate (PSE) indicator, and the other is identified in the Agreement on Agriculture (AA) of the World Trade Organization (WTO) as part of the measurement of the Aggregate Measurement of Support (AMS) indicator.

Once the United Kingdom (UK) has withdrawn from the European Union, the UK by itself will be the entity for which support to agriculture is measured under the practices or rules of international organizations such as the OECD and the WTO.

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More on capping direct payments

I want to revert to the topic of the capping of direct payments under the CAP, which I last discussed here and here. It is not the most important issue in the Commission’s legislative proposals for the CAP after 2020. But the issue of the fairness of direct payments was raised as an issue in the CAP Communication, and the proposed capping has been defended as a significant step in the better targeting of these payments. There is thus some interest in asking how effective it is likely to be.

The current situation

The current situation reflecting the distribution of payments in claim year 2015 is shown in the following graph.

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The drought crisis must serve as a wakeup call to Agriculture Ministers

We are pleased to welcome this guest post by Harriet Bradley and Ariel Brunner of Birdlife Europe.

EU agriculture is not prepared for the climate crisis – the next CAP must urgently fund a full scale transition to ecologically resilient agriculture

The drought that has struck farmers this summer has exposed the extreme vulnerability of conventional agricultural systems to environmental shocks. Across Europe, harvests have been severely affected by the summer drought, leading to a lack in particular of feed for livestock.

The response by the EU Commission, governments and the conventional farm unions has been disappointingly ‘conventional’. First, the granting of emergency aid such as in Germany , which can provide a necessary stop gap, but does not fix the fundamental problem.

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Wales charts course towards radically different farm policy

Wales is one of the three devolved government regions which along with England make up the four countries in the UK. Its agricultural sector is, in absolute terms, small. Around 38,400 holdings farm an area of 1.9 million hectares, with an average farm size of 49 hectares. Just over 15,000 of these holdings receive support under Pillar 1 of the CAP as many of them are deemed to be ‘very small’ with insignificant agricultural activity. These farms produce output valued at £1.6 billion in 2017, contributing a gross value added of €457 million and a total income from farming (TIFF) of £276 million in that year (statistics taken from Wales Statistics and Research, Farming Facts and Figures, Wales 2018 and the Aggregate agricultural output and income web page).

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The Article 92 commitment to increased ambition with regard to environmental- and climate-related objectives

Article 92 of the draft CAP Strategic Plan regulation is headed “Increased ambition with regard to environmental- and climate-related objectives”. In my previous discussion of the proposed green architecture in the CAP post 2020, I interpreted this Article as a commitment to no back-sliding on expenditure on agri-environment and climate objectives in the new CAP. For this reason, I took a more positive view of the potential of the new legislation to live up to the Commission’s declared ambition in this area than reflected in initial statements from environmental NGOs.

In the wake of further conversations with Birdlife Europe who have had the benefit of discussions with DG AGRI officials, I conclude that my initial interpretation of Article 92 as guaranteeing no back-sliding in expenditure was incorrect.

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CAP strategic planning: scope and implications

We are pleased to welcome this guest post by Emil Erjavec, Professor of Agricultural Economics, Policy and Law at the University of Ljubljana, Slovenia. It is a version of his keynote speech to be delivered at the “The future of the CAP – L’avenir de la PAC” conference organised by Société Française d’Économie Rurale at Montpellier Supagro on 22 June 2018.

In December 2017, the European Commission published a Communication announcing a new round of important changes to the CAP post-2020; its legislative proposals, published June 1st 2018, have officially initiated it. Whether these changes are truly far-reaching and whether they contribute to a more efficient, effective and less controversial policy, will largely depend on the result of inter-institutional negotiations and later national implementation.

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The greening architecture in the new CAP

Environmental NGOs were harsh in their immediate criticism of the legislative proposals on the new CAP. Greepeace said that the EU farming plan “could spell disaster for the environment”. BirdLife Europe said that “The European Commission’s claim that the new proposal will deliver a higher environmental and climate ambition has fallen flat”, arguing that the new plan “does not guarantee any spending on biodiversity and grotesquely slashes funds ring-fenced for the environment across the board”.

Birdlife Europe has produced a detailed assessment of the Commission’s proposals in a handy tabular form, pointing out both weaknesses in the proposals themselves as well as omissions where the proposals could be strengtened (a summary of this assessment has appeared on this blog).

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France’s puzzling interest in increasing the CAP budget

The Commission’s CAP legislative proposals which were published on 1 June 2018 attracted some immediate reactions from different groups of stakeholders setting out their positions. The proposals are far-reaching and complex. Together with the impact assessment, they amount to 662 pages of text. They require time and careful analysis to fully understand. In the coming weeks, I hope to examine some of the key elements one at a time.

I begin with the budgetary allocations by Member States which are included as Annexes to the draft CAP Strategic Plans regulation. This combines the current direct payments and rural development regulations into one.

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Commission Proposals on CAP: Will this become another decade of biodiversity decline?

We are pleased to welcome this guest contribution from Trees Robijns, Agriculture and Bioenergy Policy Officer, NABU (BirdLife in Germany) and Ariel Brunner, Senior Head of Policy, BirdLife Europe and Central Asia, who react to the Commission legislation proposals on the Common Agricultural Policy post 2020 published earlier today.

We have seen it all before: CAP reform. The same old CAP reform. To many of us following the process in detail, we are always in the run up to, in the middle of, or in the aftermath of a CAP reform. It feels like a never ending story of small incremental steps which, only to the absolute “uber-CAP-nerd”, lead in a clear direction.

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By how much is the CAP budget cut in the Commission’s MFF proposals?

Unlike in its presentation of its proposal for the current MFF in 2011, the Commission on this occasion in presenting its proposal for the 2021-2027 MFF did not provide comparative details on ceilings in the last year of the earlier MFF.

There are some understandable reasons for this. The next MFF is designed for 27 Member States without the UK, and so is not directly comparable with the current MFF. Also, the Commission has proposed a different and more simplified structure for the MFF which makes direct comparison difficult.

Nonetheless, in the absence of a column showing 2020 ceilings for the various MFF headings, it is not straightforward to try to work out whether the 2021-2027 figures represent an increase or decrease in proposed commitments and by how much.

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