For most of its life, DG Agriculture has been concerned with managing agricultural markets, increasing farm productivity and guaranteeing European farmers a good income. In the 1990s, under the leadership of Commissioner Franz Fischler, it began paying more attention to broader economic development and environmental concerns in rural areas. This new interest led to the establishment of the Rural Development Reguation, a suite of new policy instruments (a ‘second pillar’ of the CAP) that comprised a set of mostly farm-based subsidy schemes designed to run alongside the traditional farming policies of the EU’s common market organisations (the ‘first pillar’ of the CAP).… Read the rest
Moving towards a flat rate farm payment?
It is sometimes said that the Common Agricultural Policy establishes a level playing field across Europe, allowing farmers to take part in the European single market without fears about a plethora of national subsidies distorting prices, giving some a helping hand and holding others back. If only it were true. The fact is that when it comes to the biggest ticket item in the CAP, the €36 billion in direct payments (the decoupled single payment scheme plus various commodity-linked direct payments), the CAP is far from being a common agricultural policy. … Read the rest
Irish farmers 71% reliant on subsidies
In yesterday’s Irish Times I went ‘head to head’ with Michael Ring, a Fine Gael member of the Irish Dáil (legislature). I was putting the case for transparency in public expenditure on farm subsidies and Michael was arguing against. He made the claim that transparency in the CAP will “will give a clear indication of income of each farming household”. To be fair, nobody is arguing for the disclosure of farm incomes, just for the disclosure of the amount of government handouts to each farm. But could it be that the two figures are rather similar? And what does that mean for the economic viability of farming in Ireland?… Read the rest
Turkeys vote for Christmas
By approving a set of proposals to water down the already modest Commission proposals for the health check, the agriculture committee of the European Parliament has reinforced its reputation for thinking rooted firmly in the past and largely captured by the narrow set of producer interests who do well from the CAP status quo. As I have argued before, the lack of ambition of the health check is playing into the hands of the growing number of those who would like to see the CAP swept away altogether.… Read the rest
Free market think tank weighs in on CAP reform
The European Centre for International Political Economy (ECIPE) is a rare creature among Brussels think tanks: first, it advances a strong free trade agenda and second, it does not rely on EU institutions for its funding (its website says that its ‘base funding’ comes from the Free Enterprise Foundation in Sweden). Earlier in the summer EPICE published a briefing paper about the CAP written by Valentin Zahrnt. There’s not a whole lot new in the paper and there is a lot in common with a policy brief I wrote for the Centre for European Reform back in December 2005. The author comes down firmly on the non-trade-distorting, public money for public goods agenda advanced most strongly by Sweden, Denmark and the UK (and more moderately by the Netherlands).… Read the rest
Who gets what in EU rural development funds
In December 2006 European Union heads of government agreed a new Financial Regulation, the legal text that sets out the rules for the EU budget. The new Financial Regulation contains new requirements on the public disclosure of end beneficiaries of EU funds. The first significant fruits of the new budget transparency law are due by 30 September 2008, the deadline set out in the implementing regulations relating to expenditure under the Common Agricultural Policy. By this date each member state is obliged to provide a web-based search tool detailing all end beneficiaries of EU funds spent under rural development programmes between 1 January 2007 and 14 October 2007 (sometimes referred to as the second pillar of the CAP).… Read the rest
+++Netherlands government position paper+++
The Dutch have a well-deserved reputation for straight talking and so it is with the Government’s new position paper on the future of the CAP. As the following paragraph shows, there is no ambiguity over where the Netherlands government stands on the great targeting debate:
… Read the restIn the long term – as described in the present document– there will no longer be any question from the Dutch point of view of generic support for agriculture but solely of targeted payments for promoting competitiveness and sustainability and for socially desirable performance. This approach means that a drastic change will be necessary over the next few years.
The great targeting debate
Czech agriculture minister Petr Gandalovic made an curious statement at the informal Agriculture Council meeting held earlier this week in the French Alps. Mr Gandalovic, who will assume the chairmanship of the Council under the Czech EU Presidency in the first half of 2009, told his colleagues:
“The more specific you make the policy, the more room you give to bureaucrats who make the decisions. Non-targeted payments give more power to farmers.”
In case it’s not clear, Mr Gandalovic was making the case against targeted payments. In doing so, perhaps inadvertently, he touched on a question that goes to the very heart of the debate about the future of the CAP: the extent to which the CAP’s 54 billion euros of annual public expenditure should be targeted on clearly defined objectives and measurable outcomes.… Read the rest
The CAP and Europe's subsistence farmers
When the Commission unveiled its proposals for the health check back in November 2007, the DG Agri spin machine highlighted the proposals to introduce upper limits on the subsidies that are paid to Europe’s largest, wealthiest and most competitive farmers. What got much less attention was the plan to introduce lower limits, at a level of €250 per annum. This could make life even harder for some of Europe’s poorest farmers and shepherds who barely get a look-in when it comes to Brussels handouts.
According to the Commission’s impact assessment, the introduction of the single farm payment and the enlargement of the EU into central and eastern Europe has dramatically increased the number of very small farms claiming subsidy from the CAP.… Read the rest
The CAP and Europe’s subsistence farmers
When the Commission unveiled its proposals for the health check back in November 2007, the DG Agri spin machine highlighted the proposals to introduce upper limits on the subsidies that are paid to Europe’s largest, wealthiest and most competitive farmers. What got much less attention was the plan to introduce lower limits, at a level of €250 per annum. This could make life even harder for some of Europe’s poorest farmers and shepherds who barely get a look-in when it comes to Brussels handouts. … Read the rest