Author: Alan Matthews

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.
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Impact of Brexit on the EU budget

In a post last month, I made some estimates of the likely impact of Brexit on the CAP budget and which member states would have to stump up if overall CAP spending were to be maintained following a UK exit from the EU. These estimates were based on particular assumptions about how to calculate member states’ notional contributions to the CAP budget and how to calculate the CAP share of the overall UK rebate.

Of course, Brexit would have budgetary consequences not only for the CAP but for the UK net balance of contributions to all EU policies and for the overall EU budget.… Read the rest

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Karl Falkenberg’s reflections on the CAP

Karl who, you might well ask? Well, Mr Falkenberg has just published a reflections paper setting out a European vision for sustainability which goes into some detail about his views on the future of EU agricultural policy. Indeed, one-fifth of his relatively short document is devoted to this topic. You might well shrug that yet another viewpoint added to the hundreds of others (including those aired on this blog) discussing how Europe’s Common Agricultural Policy should be reformed after 2020 is hardly worth getting exercised about. But Mr Falkenberg’s views may deserve more attention than most.

After all, Mr Falkenberg spent more than six years as Director-General in DG ENVI after a distinguished career in the Commission civil service including a stint as Deputy Director-General in DG TRADE.… Read the rest

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Focus on the distribution of direct payments

Each year, the Commission presents a report on the distribution of direct aids to agricultural producers (links are provided on this web page). In this report, the Commission presents the breakdown of direct payments by Member State and size-class of aid. It is the source for the graphs which compare the cumulative amounts of payments with the cumulative number of beneficiaries.

The graph from the most recent report for the 2014 financial year (thus covering direct payments made to farmers in 2013 as Member States are reimbursed in the following financial year) is shown below. It confirms that the oft-quoted statistic that 80% of direct payments go to just 20% of farmer beneficiaries is alive and well; indeed, the distribution is even more skewed in Bulgaria and Romania than in other Member States.… Read the rest

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Impact of Brexit on CAP budget net balances for remaining Member States

Much of the recent discussion on agricultural matters in the fall-out from the UK referendum vote on Brexit in June has focused on the implications for UK agriculture. What agricultural policy will the UK pursue after Brexit? What type of trade relationship will it have with the EU and with other countries? What arrangements might be put in place for seasonal migrant workers who play an important role in the production of certain UK crops?

However, Brexit will also have implications for the agricultural policy of the EU. I previously explored these implications in general terms in this Eurochoices article.… Read the rest

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The voluntary milk supply reduction measure in the July 2016 farm aid package

Last week the Commission proposed at the July AGRIFISH Council meeting a further aid package for farmers worth €500 million of EU money (and up to €850 million if Member States take up the opportunity to add national financing). This brings the total additional EU financing to support farmers since 2014 to €1.5 billion. The money for the latest package comes from unspent funds in the CAP budget and does not involve making use of the crisis reserve. In his address to COMAGRI outlining the package the following day Commissioner Hogan thanked President Juncker and the budget Commissioner Vice-President Georgieva for their support in making the package possible.… Read the rest

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Waking up to Brexit – two weeks on

In Charles Dickens’ Oliver Twist, nine-year old Oliver, fed up with the miserable gruel he and the other boys in the parish workhouse were given, walks up to the master and asks for more. The next day, there was an announcement on the workhouse gate offering five pounds to anyone willing to take Oliver off the hands of the parish.

The UK, it seems, also wants more from the European Union, not only access to the single market but also exemption from the free movement of labour. It has put not one, but two Olivers, to work on this request.… Read the rest

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Supply management in milk policy

Over on the ARC2020 website, they are having a debate on the #MilkCrisis to which I was asked to contribute. Below is my contribution to that debate.

“The weighted average milk price for the EU-28 in May was 26.6 c/litre, a price last seen during the last trough in the price cycle in 2009 when the milk price bottomed out at 24.39 c/litre. The reasons for the current downturn are well known.

Global dairy product prices reached record levels in 2014. EU milk prices reached a record high of 40.2 c/litre in the winter of 2013/2014, averaging 37.3 c/litre over the 12 months in 2014.… Read the rest

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The UK opts for Brexit, what next?

The British people in their referendum yesterday expressed their wish to leave the European Union. It is a decision I deeply regret. I believe it will have negative consequences for the UK in terms of economic growth and possibly constitutional stability. For the EU, it is not possible now to foresee the longer-term consequences. At a minimum, it adds one more dossier to the already overloaded agenda of EU leaders.

The referendum result in itself has no legal power. A British withdrawal only begins when Article 50 of the Lisbon Treaty is activated. EU political leaders in their statement today called on the UK to activate this quickly in order to minimise the period of uncertainty.… Read the rest

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When is enough taxpayer aid enough?

The article below was published in the Irish Farming Independent on Tuesday 17 May (the original article can be read by clicking on this link and choosing the ‘Continue to use Press Display’ option). The article addresses the high dependence of Irish agriculture on public support, but the question I raise has, I think, wider relevance for other EU member states as well. With expectations growing that the June Agricultural Council may announce yet another aid package for the agricultural sector, my question is whether there is a vision for European (and not only Irish) agriculture in which this heavy dependence on public support for income in the sector can be reduced.… Read the rest

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Much ado about nothing in TTIP leaks on food safety standards

Disputes over food safety standards – what in the language of trade policy are called sanitary and phytosanitary standards (SPS) – have been at the heart of many transatlantic trade rows between the US and the EU. We can think of the EU bans on the import of hormone-treated beef, or pork treated with growth-promoting additives, or poultry washed in antimicrobial rinses to reduce the amount of microbes on meat. As a result, the potential impact of the ongoing negotiations to reach a Transatlantic Trade and Investment Partnership (TTIP) free trade agreement between the US and EU on EU food standards has, rightly, attracted a lot of attention and no little anxiety.… Read the rest