Month: September 2012

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How close is the EU to agreement on spending one trillion euro?

The negotiations on the 2014-2020 multiannual financial framework (MFF) are critical to the current CAP reform process. These negotiations will determine the size of the financial envelope as well as many of the key parameters which will decide the future shape of the CAP.

I have previously commented on the slow progress of the MFF negotiations (see here and here). In principle, these negotiations need to be completed under the Cypriot Presidency by the end of this year, to allow the negotiations on the future CAP regulations to be completed under the Irish Presidency in the first half of next year, so that the necessary supplemental legislation as well as member state rural programmes can be passed and approved by the end of 2013.

The official view remains that the negotiations are on track to reach a conclusion by the end of November (a special meeting of the European Council will be held on 22-23 November solely to discuss the MFF, with some suggestions that the meeting could be extended into the weekend if necessary).… Read the rest

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OECD reports EU farm transfers at lowest level ever

The OECD produced the 2012 edition of its Agricultural Policy Monitoring and Evaluation report during the week. This is the publication that keeps tabs on the transfers to and from farmers and consumers as a result of government policy interventions. It also usually contains a chapter on a special theme, which this year is devoted to fostering innovation and productivity growth in agriculture.

General findings

The results are summarised in a series of indicators, of which the most well-known is the Producer Support Estimate (PSE) usually expressed in percentage terms. It measures the percentage of farm receipts in a country that is due to public policies.

Another useful indicator is the Nominal Protection Coefficient (NPC) which measures the ratio between the average price received by producers (at farm gate), including payments per tonne of current output, and the border price (measured at farm gate).

The report finds that in 2011 support to producers across the OECD area amounted to €182 billion as measured by the Producer Support Estimate (PSE).… Read the rest

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Further thoughts on CAP greening

Kaley Hart (of the IEEP) and Jonathan Little (on secondment to the European Parliament’s secretariat) have just published a paper which provides a useful summary of the first round of the CAP greening debate over the past 12 months. They argue that, in relation to the individual greening measures, each has a range of potential benefits as well as a set of issues which may serve to constrain this potential. They note that the perceived added cost and bureaucracy involved with green direct payments has been a common theme of the public debates within the Agriculture Council.

The second part of their paper compares the relative merits of different alternative options to the Commission’s proposals. They conclude:

What is clear from this analysis is that there is no perfect alternative approach to greening the CAP, with any choice inevitably involving compromises. The amount of additional benefits delivered from the scale of investment in greening is clearly of paramount importance from an environmental perspective, however, a trade-off has to be made between environmental additionality and administrative simplicity.

… Read the rest