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.
Posted on

Making the transition from income support to a sustainable agriculture in the CAP

The CAP in recent decades has been largely an income support policy, particularly since the decoupling of direct payments after 2005. These CAP budget transfers together with national budget support either in the form of co-financing or as stand-alone payments account for over half of net farm income (for family farms, this is equivalent to family farm income). For specific enterprises and in individual countries, the contribution to farm income can be even higher.

In the first part of this post, I present the most recent data on the dependence of EU farm income on public transfers (see this post for data up to 2018 and a description of the various indicators that can be used to measure the dependence of farm income on public support). Despite the criticisms that using the CAP as a mechanism of farm income support is ineffective, inefficient and inequitable (see this analysis and this previous post), there has been little progress in developing a less subsidy-dependent agricultural sector.… Read the rest

Posted on

What is the size of the mitigation potential in EU agriculture by 2030?

In my previous post, I discussed the challenges of reducing non-CO2 greenhouse gas (GHG) emissions from agriculture and identified some of the strategies that are available or under development to allow farmers to reduce these emissions. But by how much would these strategies reduce projected emissions? What is the potential magnitude of the emissions reduction we should expect from agriculture in the coming decade? As in the previous post, I deliberately exclude a discussion of the potential to offset these emissions through land management and land use change although, as we will see, some insights into the potential to reduce emissions in the LULUCF sector will be covered in this post.

What I do in this post is to summarise the Commission’s quantification of the mitigation potential in agriculture up to 2030 in the context of the ‘Fit for 55’ package to be launched in June 2021. This is expected to propose significant changes in a raft of EU energy and climate laws to achieve the more ambitious at least net 55% emissions reduction target proposed for 2030.… Read the rest

Posted on

Mitigating agricultural emissions

Greenhouse gas emissions from agriculture (almost entirely non-CO2 emissions as defined in IPCC Sector 3) fell slightly in the EU-27 in 2018 but are still above their lowest level in 2012. Net emissions from cropland and grassland reported in the LULUCF sector also appear to have stabilised after some years of decline (EEA GHG Data Viewer). Further, projections of agricultural emissions by Member States, as I reported in this post, indicate that no significant reduction in emissions from agriculture is projected in the period up to 2030 even with additional measures in place.

Agricultural non-CO2 emissions are driven mainly by livestock numbers (particularly ruminants such as cattle and sheep) and nitrogen (N) fertiliser use. The emissions sectors included in the IPCC inventories (with the associated gases shown in brackets) cover 3A. enteric fermentation (CH4); 3B. manure management (CH4, N2O); 3C. rice cultivation (CH4); 3D. direct emissions from managed soils resulting from the application of synthetic fertiliers (N2O), manure applied to soils (N2O), manure applied to pastures (N2O), crop residues (N2O), and the cultivation of organic soils (histosols) (N2O).… Read the rest

Posted on

EU agricultural emissions trends in comparative perspective

The EU sees itself as a global leader in climate action. The UN Framework Convention on Climate Change (UNFCCC) was agreed in 1992. Since then, the EU has had quantitative emissions reduction targets for the period 2008-2012 under the Kyoto Protocol (a reduction of 8% compared to 1990 levels) and for the period 2013-2020 (under both the Kyoto Protocol and the 20-20-20 by 2020 Climate and Energy Package) which committed to a reduction of 20% in greenhouse gas (GHG) emissions by 2020 relative to 1990.

How have agricultural emissions trended during this period in the EU compared to other Annex 1 parties (developed countries) to the UNFCCC? The first chart below compares the trends in agricultural emissions (defined as mostly the non-CO2 gases emitted by agricultural production and soils) included in the national inventories submitted to the UNFCCC by selected Annex 1 countries.

Based on this evidence, agricultural emissions in the EU-27 have fallen by more over the period since 1990 than in the other Annex 1 countries shown.… Read the rest

Posted on

Measuring food system emissions

A paper just published in Nature Food by researchers from the EU Joint Research Centre (JRC) and FAO has for the first time provided a consistent database of food system greenhouse gas (GHG) emissions globally and for every country with yearly frequency for the period 1990-2015. The authors justifiably claim that it represents a milestone in our understanding of how the global food system has developed. This post looks at some of the main messages provided by the paper.

It is first important to understand what the data are measuring. Although they cover food system emissions, these data are not consumption-based food system emission estimates or footprints. There is no international trade in the estimating framework. The emissions from animal feed imported from one country to another, or deforestation in one country caused by the export of beef to another country, remain attributed to the source country and not with the country of consumption.… Read the rest

Posted on

Prospects for progress on the WTO agricultural agenda

The WTO General Council recently decided that the next WTO Ministerial Council meeting would be held in November this year in Geneva, rather than in June in Kazakhstan as had been planned. Although normally WTO Ministerial Conferences are held every two years, MC12, as it is called, will be the first Ministerial Cfonference since MC11 in Buenos Aires in December 2017.

That Conference was notable for its failure, for the first time, to agree a ministerial declaration affirming the continued importance of the WTO to the global trading system.  Specifically, on agriculture, there were no agreed outcomes and no agreed work programme for the future. While many countries, particularly developing countries, wanted negotiations to continue based on the Doha Round Declaration in 2001 and a single undertaking, other countries such as the US argued that this declaration was out-dated and no longer relevant.

One element of Sustainable Development Goal 2 to end hunger, achieve food security and improved nutrition and promote sustainable agriculture agreed by world leaders as part of the 2030 Agenda for Sustainable Development is a commitment to “Correct and prevent trade restrictions and distortions in world agricultural markets, including through the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect, in accordance with the mandate of the Doha Development Round.… Read the rest

Posted on

Improving governance of the future CAP

The proposed CAP legislation launched in 2018 made two important innovations in the governance of the CAP. First, it gave much greater flexibility to Member States in the way CAP interventions and CAP rules could be defined in individual countries. Second, it proposed to change the monitoring of Member State actions and the use made of the EU CAP budget from detailed compliance with very specific rules set out in legislation to a more performance-based approach.

The Commission’s motivation was clear. It expected that giving greater flexibility to Member States to design their own CAP interventions and rules would ensure better value for money because the interventions would be more effective. As former Commissioner Hogan noted when launching the policy proposal, the ‘one size fits all’ approach is no longer appropriate in a Union with very diverse agricultural structures and challenges. He also defended this approach on the grounds that it would lead to greater simplification of the policy for national administrations and farmers, though we can agree that this was never really going to convince anyone.… Read the rest

Posted on

Farm and non-farm income comparisons

One of the objectives for EU agricultural  policy set out in the Treaty of Rome (now the Lisbon Treaty) is to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture.  In its Communication The Future of Food and Farming in November 2017 that launched the public consultation phase of the current CAP reform, the Commission included a graph comparing average farmer income with average gross wages and salaries in the total economy to make the point that farmers’ income is still lagging behind salaries in the whole economy. Thus it concluded that “direct payments [that partially fill the gap between agricultural income and income in other economic sectors] remain an essential part of the CAP in line with its EU Treaty obligations”.

The Commission continues to use this comparison in support of its argument that direct payments are necessary to close this perceived income gap between farm and  non-farm incomes.… Read the rest

Posted on

Issues at stake in the trilogues: II Public intervention

This is a second, long-delayed, post on the issues at stake in the trilogue negotiations between the Council, Parliament and Commission on the CAP reform dossier. The first was on relevant definitions, this time on the rules for public intervention.

I have previously discussed the history and described the rules for public intervention in the run-up to the 2013 CAP reform in this post. Anyone who wants a quick refresher might find it useful to re-read that post. The Commission also has a website explaining the market management measures under the current CAP.

The issues at stake in the current trilogues are like the debates in 2013. The Parliament’s desire to maintain and strengthen public intervention (which in this post I will take to also include private storage aids (PSA)), given the likelihood of greater future market volatility, is reflected in its amendments to the Commission proposal, while the Council reiterates its concern to avoid tampering with the market orientation of the CAP.… Read the rest

Posted on

Level playing field provisions in the EU-UK TCA

My previous post discussed the general background to the EU-UK Trade and Cooperation Agreement (TCA) and specifically its provisions on tariffs and non-tariff barriers.  An innovative part of the Agreement concerns what are called ‘level playing field’ provisions in various areas including state aids, taxation, competition policy, labour standards, and environmental protection and climate change.

By demanding that the Agreement address these issues, the EU wanted to avoid a situation where the UK could use government subsidies, a more beneficial tax regime or more lenient regulatory standards to give its producers an advantage in competing with EU producers in the tariff-free free trade area which might be seen as unfair.

The Agreement includes reciprocal commitments not to reduce the level of environmental or climate protection or fail to enforce laws in a manner that affects trade or investment (the so-called ‘non-regression’ clause). Both sides have the right, in certain circumstances, and subject to arbitration, to take countermeasures if they believe they are being damaged by measures taken (or not taken!)… Read the rest