The evaluation of rural development policies has improved over the years. The current mid-term evaluation, with all member states applying the sophisticated Common Monitoring and Evaluation Framework (CMEF) underpinned by voluminous Commission guidelines, is another step forward. DG Agri is adding further tools to make evaluations even more productive, such as an Internet platform for all stakeholders involved in the evaluation process.

The philosophy of monitoring, learning and adjusting is correct – but it can lead to an excessive trust in our abilities to manage economic processes, including their social and environmental implications. We must recognize the limits of our ability to glean information about the diverse challenges on the ground, to identify the locally diverse and multifaceted effects of policy interventions, to process this information intelligently and impartially, and to draw adequate conclusions. In other words, we must take the limits of top-down government seriously.

Some problems of evaluation are clear-cut and, theoretically, remedies are within reach. For instance, the data needs of evaluators could be better integrated into routine statistics and evaluators could be made more independent from policymakers. However, the very fact that these problems exist though they are simple to understand and to resolve – and that they exist not only with regard to the CAP but in all policy areas and countries – gives reason to doubt future progress. Sound evaluation tends to hurt; it always focuses on the weaknesses and adopts ever tougher benchmarks. Policymakers and administrators therefore take care that evaluation does not become (too) sound.

In addition, evaluation is beset with dilemma that even the most ambitious reformer cannot resolve. The advantages of control can be offset by a loss of trust: lower-level actors may prefer to have an impeccable formal record rather than to be effective and innovative. The benefits of evaluation must be balanced against their administrative demands on governments and farmers. The system should be sophisticated (and thus yield value even for the most advanced member states) yet also manageable for those member states with the weakest analytic resources. Evaluation reports should be quickly available and incorporate the long-term effects of policy measures. Reports should be adapted to local circumstances – and be comparable across member states. Indicators should be stable, so that evaluators can learn how to handle them and that policymakers can observe how policies work across time, but they should also change in response to new insights and challenges. As a result of such dilemma, improvements in one regard tend to come at hidden costs in other dimensions.

In brief, policy evaluation is not like a new technology whose potential is still hard to grasp; it is an age-old technique whose inherent limits are well known. This matters for policy design.

First, policy objectives should be spelled out clearly and guidance on suitable indicators should be provided directly in the legislation establishing the policy instrument. Currently, objectives are often left vague and actual policies designed in a way that makes a mockery of subsequent evaluation (e.g. when the very intention of a policy is to create windfall gains for farmers but the evaluator is asked to ‘show’ its beneficial effects on competitiveness).

Second, the number of policy objectives and instruments should be limited. DG Agri counts more than 150 indicators to assess rural development – this plethora favors box-ticking over thorough analysis. Interestingly, environmental impacts tend to be easier to measure than socio-economic impacts. It is, for example, impossible to get a solid grip on the net job effects of farm modernization subsidies – especially when cross-sectoral effects are accounted for. This is yet another argument for focusing the CAP on sustainable land use.

Third, difficulties of policy evaluation and learning at the top speak in favor of devolving responsibility to lower levels of governance. Local authorities are best able to identify their needs, to see which solutions work best and to get results at lowest costs. Co-financing is therefore an important tool to create strong incentives for local and national authorities to use their informational advantage for more effective rural development.

This post is based on the personal lessons that I took away from a recent seminar on rural development evaluation. The seminar presentations can be downloaded here.

Millions of pounds of taxpayers’ money intended for environmental projects is instead being used to prop up damaging farmning practices across Europe, according to a report Could Do Better compiled for the Royal Society for the Protection of Birds by Birdlife International. The report highlights some of the positive work being done in EU member states with CAP funding which is helping farmers create and protect habitats for wildlife. [...]

It’s not uncommon to see reports of people queueing up all night for the latest iPhone, the next Star Wars movie or tickets to watch tennis at Wimbledon. But as I write, farmers in Northern Ireland are queueing outside for farm subsidies. The government in Northern Ireland has decided to hand out farm subsidies ‘on a first come first served’ basis. The decision was taken because this particular funding package is worth just £6 million and is capped at £5,000 per application so only 1,200 farmers stand to benefit. Farmers are to be sleeping out in the cold to ensure they get a good place in the line. [...]

For most of its life, DG Agriculture has been concerned with managing agricultural markets, increasing farm productivity and guaranteeing European farmers a good income. In the 1990s, under the leadership of Commissioner Franz Fischler, it began paying more attention to broader economic development and environmental concerns in rural areas. This new interest led to the establishment of the Rural Development Reguation, a suite of new policy instruments (a ’second pillar’ of the CAP) that comprised a set of mostly farm-based subsidy schemes designed to run alongside the traditional farming policies of the EU’s common market organisations (the ‘first pillar’ of the CAP). The Commission recently held a big rural development conference in Cyprus and this was accompanied by the publication of a short paper looking at the role of agriculture in rural economies across the EU and a large dataset of rural development statistics and indicators. [...]

Agra Focus has been conducting a series of interviews on EU farm policy and one of the longest and most interesting to date is with Allan Buckwell. He is currently policy director with the (England and Wales) Country and Land Business Association, but is also chair of the policy committee run by the European Landowners Association. He was for many years a respected agricultural economics and policy academic at the now sadly diminished Wye College. Perhaps his most interesting role in policy terms was when he spent a year in DG Agri in 1995-6 and chaired a group which wrote a report on a Common Agricultural and Rural Policy for Europe. [...]

In December 2006 European Union heads of government agreed a new Financial Regulation, the legal text that sets out the rules for the EU budget. The new Financial Regulation contains new requirements on the public disclosure of end beneficiaries of EU funds. The first significant fruits of the new budget transparency law are due by 30 September 2008, the deadline set out in the implementing regulations relating to expenditure under the Common Agricultural Policy. By this date each member state is obliged to provide a web-based search tool detailing all end beneficiaries of EU funds spent under rural development programmes between 1 January 2007 and 14 October 2007 (sometimes referred to as the second pillar of the CAP). [...]

Czech agriculture minister Petr Gandalovic made an curious statement at the informal Agriculture Council meeting held earlier this week in the French Alps. Mr Gandalovic, who will assume the chairmanship of the Council under the Czech EU Presidency in the first half of 2009, told his colleagues:

“The more specific you make the policy, the more room you give to bureaucrats who make the decisions. Non-targeted payments give more power to farmers.”

In case it’s not clear, Mr Gandalovic was making the case against targeted payments. In doing so, perhaps inadvertently, he touched on a question that goes to the very heart of the debate about the future of the CAP: the extent to which the CAP’s 54 billion euros of annual public expenditure should be targeted on clearly defined objectives and measurable outcomes. It is a debate raging right now within DG Agriculture, a power struggle that is pitting CAP ‘modernisers’ who seek a greater role for the current rural development pillar against CAP ‘consolidators’ who defend the “Fischler settlement” and the current Commission Health Check agenda. What it boils down to is a debate over the fundamental role of public policy in agriculture. [...]

The current high prices for arable crops mean that farmers in the US and Europe are reconsidering whether putting their land into government-financed conservation schemes is such a good idea financially. The EU is well on the way to releasing all its set aside land back into production, and in the US Congress is considering whether to allow farmers to leave long term conservation contracts without facing any penalties. [...]

New official figures on how the the €53.5 billion of EU expenditure on the Common Agricultural Policy was distributed in 2007 show just how raw a deal the new member states are getting under Pillar One of the CAP, which still accounts for four fifths of the total CAP budget.

The figures are presented in a novel interactive data visualisation below (you may like to play around with the settings for Bubble Size, Label and Colour. [...]

In order to animate a transparent debate on the purpose, intensity and spatial distribution of CAP expenditure, a number of maps overlaying CAP expenditure data and high nature value farmland have been produced as part of a study recently completed by IEEP for the UK Royal Society for the Protection of Birds (RSPB). [...]

The vast majority of expenditure under the CAP continues to be directed to income support and is not explicitly targeted at responding to biodiversity, or other pressing environmental objectives. According to a new IEEP study for the UK Royal Society for the Protection of Birds (RSPB) the distribution and allocation of CAP funding, and the uses to which it is put to, should be adjusted in order to help meet the EU’s international commitment to halt the loss of biodiversity.

[...]

With the release yesterday of new figures on EU expenditure in 2007, the Commission has been busy spinning the line that farm subsidies no longer account for the biggest item of Brussels spending. Most news outlets have been swallowing this line without taking a closer look at the figures which show that a full 50 billion euros of EU money was spent on farm-based programmes. [...]

The Less Favoured Areas directive is one of the few examples of British influence on the design of the CAP. It was originally conceived as the Mountain Areas Directive with France pressing for a definition that would have excluded Britain’s hills and uplands. But the British emphasis on latitude rather than altitude won the day in 1975. Other member states saw the Less Favoured Areas directive as a good route to justify more cash for their farmers and by 1995 56 per cent of the utilised area of the EU was designated as less favoured. In Scotland, 85 per cent of the farmed area has LFA status. [...]

I have recently been working with others on an edited collection to be brought out from the Centre for Policy Studies in Brussels which re-visits the Fischler reforms of the CAP. The discussions held in relation to the book, which involved some people who knew Fischler’s work well, confirmed my view that he was someone who combined strategic vision with a wily use of tactics and an understanding of which political buttons to push when. Now the former farm supremo has provided a rare interview to Agra Focus. One of the intresting points he makes that two much is made of the difference between the two pillars: ‘They are man-made and we should not make an icon of these structures.’ What is important is that the money goes to the right recipients. [...]