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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The distribution of CAP direct payments

DG Agri recently published its latest report on the distribution of direct payments to farmers within the EU for the financial year 2012 (the payment year 2011). The payments covered are the Pillar 1 direct payments, but not payments under Pillar 2 or the national top-ups paid in the new member states.

The report also provides comparative information with the financial year 2005 (payment year 2004) which is the first year in which farmers in the 10 new member states received direct payments; for Bulgaria and Romania, comparisons are made with the financial year 2008 (payment year 2007) which corresponds to the first year in which their farmers received payments following their accession.… Read the rest

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Does TTIP (and TPP) require TPA?

I suspect that many readers will find the acronyms in the title of this post puzzling, so let me explain. This is a post about trade policy, and especially about the dependability of the US as a negotiating partner in its negotiations with the EU on the free trade agreement known as TTIP – the Transatlantic Trade and Investment Partnership – billed on the DG Trade website as ‘the biggest trade deal in the world’ and due to be completed by December this year.
The TTIP talks also encompass food and agricultural products. The goal is to eliminate all tariffs on both agricultural and non-agricultural trade between the two counties.… Read the rest

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Export refunds and Africa

Export subsidies on agricultural products are back in the news again following the somewhat surprising declaration by Commissioner for Agriculture and Rural Development Dacian Ciolos in his opening speech at the Green Week on Berlin earlier this month (16 January), of his readiness to stop the use of export refunds for exports to developing countries in Africa with which the European Union has an Economic Partnership Agreement (EPA). He stressed that this would be an important step in terms of coherence between EU agriculture and development policies. He said:

Since 1 January, EU legislation is also very clear: export refunds have ceased to exist as a means of systematically supporting a sector.

… Read the rest
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Agriculture in the Commission’s climate policy to 2030

Yesterday, the European Commission published its proposed policy framework for climate and energy policy to 2030. It proposes two high-level goals while retreating from setting more specific targets for individual sectors and technologies. The over-arching goal is a greenhouse gas emissions reduction target for domestic EU emissions of 40% in 2030 relative to emissions in 1990. The proposal met with a mixed reaction and must still go through the legislative process in both the Parliament and the Council.
The Commission’s assessment is that the policies and measures implemented and envisaged by member states in relation to their current obligations to reduce greenhouse gas emissions, if continued after 2020 and fully effective, would deliver a 32% reduction relative to emissions in 1990.… Read the rest

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The timeline for rural development programming

One of the innovations in rural development programming for the next multi-annual period is that there is meant to be much greater integration between EAFRD spending and spending through the other structural and investment funds. Trying to achieve this greater integration has been, and is, a fraught and time-consuming process, with implications for when member state and regional rural development programmes (RDPs) will get the green light to proceed.
I described how this process is intended to work in an earlier post. In a first step, the Commission has drawn up a Community Strategic Framework (CSF) which is intended to facilitate the sectoral and territorial coordination of union intervention under the CSF funds and with other relevant Union policies and instruments.… Read the rest

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More on Pillar 2 allocations by member state

In a previous post I commented that a noteworthy aspect of the Ciolos CAP reform was that, unlike previous reforms, it explicitly proposed to redistribute CAP resources between the member states and between farmers within member states. In writing this I was thinking primarily of Pillar 1 payments. Pillar 2 allocations between member states have been more variable, although still largely influenced by historical amounts (Zahrnt discusses the evolution of Pillar 2 shares in this European Parliament paper).
Also on this occasion, the Commission proposed (in its MFF budget proposals) that the distribution of Pillar 2 rural development support should be based on objective criteria linked to the policy objectives taking into account the current distribution.… Read the rest

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The Ciolos CAP reform

The CAP2013 reform ended with a whimper yesterday as the Agricultural and Fisheries Council adopted the revised regulations as an A item without discussion following a first reading agreement with the European Parliament. Today the President of the Council ratified the documents in the presence of the ministers from Denmark, Cyprus and Ireland and the vice-minister from Poland. This concludes the legislative process for the 2013 CAP reform. For the first time, we now have a clean version of the four main regulations, as follows.
Direct payment regulation
Rural development regulation
Horizontal regulation
Single CMO regulation
The extended Council press release announcing the Council’s approval has a useful annex summarising the main changes which will be introduced by this reform.… Read the rest

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Changing patterns of global agrifood trade

Publication of the latest United Nations International Trade Statistics Yearbook with comparative figures from 2000 to 2012 gives an insight into the important structural changes in patterns of global agrifood trade over the past decade. The figures underline the way in which developing countries have become the dynamic motor behind agrifood trade flows, a finding which has relevance when discussing the coverage of WTO trade rules.
During this period agrifood trade maintained and even increased its share of total merchandise exports. It share was 6.1% in 2000, but increased to 7.0% in 2009 following the sharp rise in global food prices in 2008-09.… Read the rest

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EU agriculture: impacts of climate change

Using the CAP to promote a climate-friendly agriculture in Europe (or, as it is increasingly called, a climate–smart agriculture) was one of the stated objectives of the Commission in putting forward its CAP reform proposals in 2011. Agriculture both has a mitigation role to play in climate policy, and must also adapt to climate change.

Regarding mitigation, the Europe 2020 Strategy establishes the reduction of greenhouse gases as one of the EU’s five headline targets. Agriculture is both an emitter and a sink of greenhouse gases, and agricultural soils contain a large stock of terrestrial carbon in the form of soil organic matter.… Read the rest

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Does national spending on agriculture follow a different path to the CAP?

In evaluating the pattern of budget transfers to agriculture, most of the focus is on the transfers through the EU budget. The negotiations on the Multi-annual Financial Framework (MFF) were closely followed because of their importance for the size of the CAP budget in the overall EU budget in the coming programming period.
However, in addition to EU transfers farmers also receive significant transfers from member state budgets. These take two forms: member state co-financing of CAP Pillar 2 expenditures (plus some allowed top-ups of Pillar 1 payments), and state aids paid by member states to their farmers. A proportion, but not all, of agricultural state aid represents member state spending on measures equivalent to rural development measures which would be eligible for funding under Pillar 2 if the national allocations were bigger, but which are funded instead by national exchequers.… Read the rest