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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No decision on MFF budget at first attempt

Van Rompuy’s second attempt (HvR-II) at preparing draft conclusions on the EU’s multi-annual financial framework (MFF) for the European Council which failed to agree them at this week’s special European Council meeting can be summarised in two sentences: (a) within the overall budget, the reinstatement of much of the CAP spending cuts at the expense of all other budget headings (except Administration which stayed the same, though see below); and (b) separately, within Heading 1, a shift from competitiveness (Europe 2020) to cohesion spending.

The detailed figures are shown in the table below. The total budget (including extra-MFF spending) in HvR-II is maintained at exactly the same level as HvR-I but because emergency aid for humanitarian crises in developing countries is moved out of the MFF, the MFF total falls by just over €1 billion euro.… Read the rest

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MFF baton passes to Van Rompuy: further cuts proposed compared to Commission proposal

The President of the European Council Herman Van Rompuy has now tabled his proposal for expenditure and financing in the EU’s MFF for the 2014-2020 period for discussion. The document will be tabled at the next General Affairs Council scheduled for 20 November. It is then not clear if Van Rompuy will have time to rework the numbers before the 22-23 November European Council which will convene solely to discuss and, if things go according to plan, agree on the Council’s view on the new MFF.

The draft starts with the last version of the MFF negotiating box developed by the Cyprus Presidency but revises the numbers, again in a downward direction.… Read the rest

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The nitty-gritty of CAP reform: the case of new entrants

David Barnes is the Scottish Government’s Deputy Director for Agriculture and Rural Development. He sits with his Minister around the Council of Agricultural Ministers’ table as the negotiations on the shape of the CAP2020 take place and, more interestingly, he blogs about it. His blog gives an insider’s view and a personal perspective on what is going on during the course of the negotiations.

Not surprisingly, his posts give some fascinating insights into the process.

The complexity of the CAP 2020 fineprint was demonstrated in one of his recent posts which addressed issues for new entrants that might arise under the Commission’s proposal for the allocation of entitlements under a new direct payments scheme.… Read the rest

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European Parliament postpones vote on CAP reforms

COMAGRI and the European Parliament have decided to delay their voting on the Commission’s CAP reform proposals until the New Year, according to a report in the UK Farmers’ Guardian today. The new timetable means that it is unlikely that the new regulations can be agreed between the Council and the Parliament until late in the Irish Presidency in the first semester next year.

The latest CAP reform timetable is:

December 15

    – deadline for compromise amendments to be presented to Agriculture Committee.

January 23/24, 2013

    – CAP vote in Agriculture Committee.

March 2013

    – plenary vote in Parliament.

March 2013 onwards

    – trilogue negotiations between EU Commission, Parliament and EU Ministers.
… Read the rest
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Cyprus Presidency issues second revised MFF negotiating box

The Cyprus Presidency yesterday circulated its second revision to the MFF negotiating box, this time inserting some figures for the individual MFF headings for the first time.

It is a cautious document in its attempts to balance the very different interests of the member states as they try to reach agreement on the MFF at the special November European Council meeting. Agricultural spending escapes lightly in the Presidency proposal which shows where budget reductions in the proposed 2014-2020 MFF might fall.

The preamble to the document states that it presents savings across all Headings of the MFF amounting to at least €50+ billion (this is in comparison to the Commission’s revised MFF proposal in July 2012).… Read the rest

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October Agricultural Council continues CAP debate

Agricultural Ministers continued to grind through their discussions on CAP2020 issues under the Cypriot Presidency at the Agricultural Council meeting on 22 and 23 October earlier this week. Three issues were on the agenda: internal convergence, support for young farmers in Pillar 1, and a strengthened role for producer organisations. The background note prepared by the Presidency is here, and the conclusions of the meeting are reported here. The discussions took place on the basis of two questionnaires circulated by the Presidency on internal convergence and young farmers, respectively.

Internal convergence

Many member states applying the Single Payment Scheme (SPS) have voiced concerns about the difficulties in achieving a uniform level of distribution of direct support at national or regional level (internal convergence) by 2019.… Read the rest

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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.… 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.… 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.… Read the rest

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Cyprus Presidency proposes CAP budget cut in next MFF

The first initiative in what member states hope might be the final push to get agreement on the next Multi-annnual Financial Framework by the end of this year under the Cyprus Presidency took place yesterday (30 August) when the Cypriots hosted an informal meeting of the General Affairs Council in Nicosia.

During July, the Cypriots held a series of bilateral meetings (‘confessionals’) with the 27 member states and Croatia. Based on these discussions an Issues Paper was prepared for the meeting. This paper reported briefly on the outcome of the bilateral consultations, presented the Presidency´s proposed orientations for reflection by the delegations, and included a brief reference to the next steps.… Read the rest