Author: Attila Jambor

Attila Jambor is Assistant Professor in the Department of Agricultural Economics and Rural Development at the Corvinus University of Budapest, Hungary. Holding a PhD in economics, his major research interests are agricultural policy and agri-food trade analysis. He was a junior consultant to the European Parliament on the future of rural development in the CAP post 2013 and to the FAO on the diversity of effects of EU membership on agriculture in the New Member States. He was a junior professional to the World Bank in creating the Agricultural and Rural Development Strategy of Moldova and Romania. His current field of research are the competitiveness of global agriculture and the impacts of the ten years of EU membership on Central and Eastern European agriculture.
Posted on

Lost in Climate Change Reports

The UN’s next global climate change conference is fast approaching. Hosted by France, the conference aims to achieve a new international agreement on the climate with the aim of keeping global warming below 2°C. This is not a new goal as we know – the Copenhagen Meeting in 2009 also wanted to reach the same.

Those interested might find it useful to read some recent reports on the topic to keep themselves up to date. However, by starting with the probably most well-known ones (IPCC’s climate change reports), one surely realises that their language becomes very hard to understand. In a recent article, a number of scientists analysed the language used by IPCC and concluded that her studies have become less readable over time. Another interesting finding of the article was that these reports were usually more optimistic and used more positive words than the general media did. For me, it was not just IPCC’s cited report which was hard to read but all related reports like EEA’s Report on the European environment, FAO’s Climate Change and Food Systems Report or the OECD’s Climate Change Mitigation report.… Read the rest

Posted on

Decreasing food prices: Short term happiness

The FAO Food Price Index averaged 156.3 points in September 2015 which is almost 20% less than a year ago. Last month’s 155.7 points were actually the lowest value of the index in the last seven years.
The FAO Food Prices index tracks international market prices for cereals, meat, dairy products, vegetable oils and sugar. As the following figure shows, prices of each of these are moving downwards in the short run, though they increased by 50-100% on a 2002-2004 basis.
FAO Food Price Index for 1990-2015 (2002-2004=100)

Values for 2015 are coming from January-September averages.
Source: Own composition based on FAO (2015) data
FAO suggests that reasons behind are ample supplies, a slump in energy prices and concerns over China’s economic slowdown. Another reason as some agricultural economists suggest is that food prices today are closer to reality than they were in 2006-2012 (some experts are referring to price bubbles that time).… Read the rest

Posted on

Rising Agricultural Incomes in Europe

The index of the real income of factors in agriculture per annual work unit (better known as index of agricultural income or Indicator A) has increased by 18% in EU15 countries and 35% in EU28 countries from 2005 to 2014 as evident from Eurostat statistics. It is clear from the figure below that compared to 2005, agricultural incomes more than doubled in Estonia and Slovakia in 2012-2014, while it was just decreasing in Cyprus, Ireland, Luxembourg, Malta and Slovenia.

Agricultural income in the European Union by member state, 2005-2014 (2005=100)

Source: Own composition based on Eurostat 2015 data.

Without going very much into detail, it is apparent that agricultural income has been increasing in each period in the majority of the cases. Even in 2009-2011 when the economic crisis definitely had the biggest impact, agricultural real income per worker was just lower on 2005 basis in seven EU members. It is also evident from the figure above that due to increasing support, income of the New Member States (NMS) were increasing at a higher pace than that of EU15.… Read the rest

Posted on

Some thoughts on the European milk crisis

On 7th September, around 5000 European farmers demonstrated on the streets of Brussels due to falling dairy and meat prices. The demonstrators demand, amongst others, a review of the intervention system on the milk market, temporary reinstallation of milk quotas, some early direct payments to solve liquidity problems and a marketing fund assisting to sell agricultural products outside the EU.

While reading the news, an agricultural economist might have the following fundamental questions in his/her head.

1. The end of the quota system, an issue on the European policy agenda for many years, has resulted in limitless production, especially in countries with comparative advantages. However, it seems this crisis was very much unexpected at the Commission despite their economic studies dealing with the post-quota European milk market. Why are we so shocked about the simple fact that increasing supply decreases prices?

2. Farmers are complaining that the price of milk has just fallen dramatically and they are producing loss.… Read the rest

Posted on

Are we really moving forward?

The debate on the future of the CAP has recently moved on with two important steps – the European Parliament plenary vote and the European Council agreement. Just to take up the story, the European Parliament Plenary voted in Strasbourg on 13 March on the over 330 amendments COMAGRI made this year to the European Commission’s official communication on the CP reform in October 2011. This was the first time in history when the Parliament could use her co-decision powers, affecting European Council decisions. This all happened, of course, after the deal reached on long-term budget on February 8, the consequences of which are well summarised in the interview with Paolo de Castro, Chair of COMAGRI at the European Parliament (see the video made by Vi(eu)ws here).
The Plenary vote mainly favoured the Commission’s original ideas against the various amendments. Consequently, Dacian Ciolos, the European commissioner for agriculture, welcomed this fact and said that it was an important step in the CAP reform process (see full reaction here).… Read the rest

Posted on

What the proposed MFF has for agriculture?

Herman Van Rompuy, President of the European Council introduced the acceptance of the new MFF yesterday on his Twitter page by writing that

Deal done! The European Council has agreed on MFF for the rest of the decade. Worth waiting for.

Although this is not the final agreement as the European Parliament still has to confirm the Council decision, it is highly unlikely that the EP risks the hard-fought agreement reached at the Council.  Therefore, the playing arena for agriculture in the next seven years is set in the final conclusions published by the Council.
In general, the deal reached limits the maximum possible expenditure for a European Union of 28 Member States (with Croatia’s accession this year) to €960 billion in commitments, corresponding to 1.0% of the EU’s GNI. This means that the overall expenditure ceiling has been reduced by 3.4% in real terms, compared to the current MFF – the first time in history when such a reduction is made.… Read the rest

Posted on

Who is happy with EP COMAGRI’s recent vote?

After more than a year of debate, the EP Agriculture and Rural Development Committee began adopting several amendments to the future CAP legislation on 23 and 24 January but approval remains far from certain.
Many criticisms have been made since the vote. The agro-lobby is talking about a melt-down of the urgently needed reforms and greening, reacting on the COMAGRI proposal to allow farmers to ‘opt out’ of mandatory greening requirements and still get at least 70% of the direct payments as well as watering down every single measure with so called ‘equivalents’.
Environmental campaigners also criticised the vote, alleging that the debate was dominated by agricultural interests. The EEB is complaining that the CAP continues to suffer from a fundamental lack of legitimacy as it continues what they call a ‘money for free’ approach, thereby criticising the COMAGRI to pay farmers twice for the same work. Birdlife, for instance, is neither happy with the vote as MEPs have deleted or watered down 10 out of 21 cross-compliance rules, one of the most important ones in the current regime for preserving nature as they say.… Read the rest

Posted on

Nobody cares what we spend our money on

All we know that no decision was made last week in Brussels on how much money the EU should spend in the next programming period (MFF). Besides Van Rompuy’s detailed and complicated figures and plans, it is pretty evident that the debate is about the possibility to redistribute the European Budget among Member States.

If one takes a short look to the operating budgetary balance of the Member States, it becomes evident that Poland, Greece, Hungary, Spain and Portugal are the greatest recipients of the current system, while Germany, France, Italy, the United Kingdom and Netherlands are the biggest contributors in absolute terms. This picture varies, of course, if we analyse the balance per capita or as a proportion of GDP. It is also evident that the former group wants to save the status quo, while the latter wants to cut the budget.

Source: http://ec.europa.eu/budget/figures/interactive/index_en.cfm

If we compare the figure above with the one below, it turns out that expenditure on agriculture and rural development by country shows a great diversity among Member States as well.… Read the rest

Posted on

Strengthening the role of young farmers in the future CAP

The European Council of Young Farmers (CEJA) has recently launched a campaign “Future Food Farmers” to raise public awareness of the impending age crisis in European agriculture. The aim of the campaign is to achieve progress on generational renewal in the agricultural sector in the future CAP.

The issue is highly relevant these days as only 6% of agricultural holders in the EU are below the age of 35, while one third are over 65. However, Member States show a great diversity in this issue as Poland has the highest share of young farmers in Europe (12%), while Portugal has the lowest (2%), according to Eurostat data. Neither figure is promising for the future, though.

The ‘young farmers problem’ affects European agriculture in many different ways. Just to mention a few, food security, biodiversity, rural job creation as well as productivity and competitiveness are at stake. Young farmers are faced with significant entry barriers (access to land and credit, investments, etc.),… Read the rest

Posted on

What potential agroforestry holds for the future CAP?

More than 80 policy makers, farmer’s representatives, NGOs and scientists got together on Wednesday this week in the European Parliament in Brussels to discuss the potential agroforestry holds for the future CAP. The event, entitled “Agroforestry: Trees for a Sustainable European Agriculture”, was organised and chaired by MEP Gaston Franco with the aim of promoting and supporting agroforestry at the European level. The programme (see agenda and presentations here) has brought together many speakers with various backgrounds and perspectives, resulting in a demonstration of a diverse and sophisticated picture of the field.

Agroforestry combines production and environmental protection in an innovative way, said Alain Canet – President of the French Agroforestry Association. It allows optimising the use of natural resources and produces biomass and biodiversity as well as it “offers innovative solutions to modern challenges of rural development,” argued Christian Dupraz, Researcher and President of the European Agroforestry Federation (EURAF).… Read the rest