Category: Blog posts

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The redistributive payment is more effective at redistribution

Capping of direct payments is not the only instrument proposed by the Commission to allocate more support to small and medium-sized farms. In addition to a mandatory ‘basic income support for sustainability’, the Commission CAP proposal would also require Member States to introduce a ‘complementary redistributive income support for sustainability’. This redistributive payment is currently voluntary under the 2014-2020 CAP.

Under the current CAP, the redistributive payment is applied by 9 Member States: BE-Wallonia, BG, DE, FR, HR, LT, PL, RO and UK-Wales. The financial allocation to the scheme takes up from 0.5% to 15% of the Member States national ceiling for direct payments. The payment aims at achieving a more effective income support for smaller farmers by granting an extra payment per hectare for the first hectares below a certain threshold.

All farmers eligible for BPS/SAPS receive the redistributive payment. However, they only receive this payment up to a certain number of hectares per holding.… Read the rest

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Two indicators, little in common, same name: Market Price Support

We are pleased to welcome this guest post by Lars Brink, who is an independent advisor working from Canada.

This post examines the concepts and calculations of the two different agricultural policy indicators called Market Price Support (MPS): the one is used by the Organization for Economic Cooperation and Development (OECD) in its measurement of producer support in its Producer Support Estimate (PSE) indicator, and the other is identified in the Agreement on Agriculture (AA) of the World Trade Organization (WTO) as part of the measurement of the Aggregate Measurement of Support (AMS) indicator.

Once the United Kingdom (UK) has withdrawn from the European Union, the UK by itself will be the entity for which support to agriculture is measured under the practices or rules of international organizations such as the OECD and the WTO.

As a non-EU member of the OECD, the UK is assumed to participate in the measurement of the OECD’s PSE.… Read the rest

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More on capping direct payments

I want to revert to the topic of the capping of direct payments under the CAP, which I last discussed here and here. It is not the most important issue in the Commission’s legislative proposals for the CAP after 2020. But the issue of the fairness of direct payments was raised as an issue in the CAP Communication, and the proposed capping has been defended as a significant step in the better targeting of these payments. There is thus some interest in asking how effective it is likely to be.

The current situation

The current situation reflecting the distribution of payments in claim year 2015 is shown in the following graph. The graph shows the cumulative number of beneficiaries and their cumulative share of total direct payments in that year. What emerges clearly is the large number of very small beneficiaries. On average, at EU level, half of the direct payments beneficiaries receive less than €1,250 per year (around €100/month), corresponding to 4.5% of the total direct payments envelope.… Read the rest

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The drought crisis must serve as a wakeup call to Agriculture Ministers

We are pleased to welcome this guest post by Harriet Bradley and Ariel Brunner of Birdlife Europe.

EU agriculture is not prepared for the climate crisis – the next CAP must urgently fund a full scale transition to ecologically resilient agriculture

The drought that has struck farmers this summer has exposed the extreme vulnerability of conventional agricultural systems to environmental shocks. Across Europe, harvests have been severely affected by the summer drought, leading to a lack in particular of feed for livestock.

The response by the EU Commission, governments and the conventional farm unions has been disappointingly ‘conventional’. First, the granting of emergency aid such as in Germany , which can provide a necessary stop gap, but does not fix the fundamental problem. Second, the situation has been used to suspend some of the only environmental measures on farms, namely by allowing farmers to grow crops on areas they are paid to reserve for nature and on land that is being left ‘fallow’ to recover.… Read the rest

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Wales charts course towards radically different farm policy

Wales is one of the three devolved government regions which along with England make up the four countries in the UK. Its agricultural sector is, in absolute terms, small. Around 38,400 holdings farm an area of 1.9 million hectares, with an average farm size of 49 hectares. Just over 15,000 of these holdings receive support under Pillar 1 of the CAP as many of them are deemed to be ‘very small’ with insignificant agricultural activity. These farms produce output valued at £1.6 billion in 2017, contributing a gross value added of €457 million and a total income from farming (TIFF) of £276 million in that year (statistics taken from Wales Statistics and Research, Farming Facts and Figures, Wales 2018 and the Aggregate agricultural output and income web page).

Total receipts under the Basic Payment Scheme (BPS) amounted to £234 million while agri-environment payments under the Glaistir scheme amounted to a further £55.7 million in 2017.… Read the rest

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The Article 92 commitment to increased ambition with regard to environmental- and climate-related objectives

Article 92 of the draft CAP Strategic Plan regulation is headed “Increased ambition with regard to environmental- and climate-related objectives”. In my previous discussion of the proposed green architecture in the CAP post 2020, I interpreted this Article as a commitment to no back-sliding on expenditure on agri-environment and climate objectives in the new CAP. For this reason, I took a more positive view of the potential of the new legislation to live up to the Commission’s declared ambition in this area than reflected in initial statements from environmental NGOs.

In the wake of further conversations with Birdlife Europe who have had the benefit of discussions with DG AGRI officials, I conclude that my initial interpretation of Article 92 as guaranteeing no back-sliding in expenditure was incorrect. On closer reading the Article says nothing about financial commitments and indeed seems hardly to bind Member States to any substantive commitments at all.… Read the rest

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CAP strategic planning: scope and implications

We are pleased to welcome this guest post by Emil Erjavec, Professor of Agricultural Economics, Policy and Law at the University of Ljubljana, Slovenia. It is a version of his keynote speech to be delivered at the “The future of the CAP – L’avenir de la PAC” conference organised by Société Française d’Économie Rurale at Montpellier Supagro on 22 June 2018.

In December 2017, the European Commission published a Communication announcing a new round of important changes to the CAP post-2020; its legislative proposals, published June 1st 2018, have officially initiated it. Whether these changes are truly far-reaching and whether they contribute to a more efficient, effective and less controversial policy, will largely depend on the result of inter-institutional negotiations and later national implementation.

Nevertheless, the basic building blocks of reform are known. I agree with those who point out that this reform is primarily about changes in the institutional approach and responsibility of agricultural policy and less about changes in available policy instruments.… Read the rest

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The greening architecture in the new CAP

Environmental NGOs were harsh in their immediate criticism of the legislative proposals on the new CAP. Greepeace said that the EU farming plan “could spell disaster for the environment”. BirdLife Europe said that “The European Commission’s claim that the new proposal will deliver a higher environmental and climate ambition has fallen flat”, arguing that the new plan “does not guarantee any spending on biodiversity and grotesquely slashes funds ring-fenced for the environment across the board”.

Birdlife Europe has produced a detailed assessment of the Commission’s proposals in a handy tabular form, pointing out both weaknesses in the proposals themselves as well as omissions where the proposals could be strengtened (a summary of this assessment has appeared on this blog).

In this post, I review some of the issues raised by these critiques and explain some of the key differences between the proposed new greening architecture and the policy that it would replace.… Read the rest

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France’s puzzling interest in increasing the CAP budget

The Commission’s CAP legislative proposals which were published on 1 June 2018 attracted some immediate reactions from different groups of stakeholders setting out their positions. The proposals are far-reaching and complex. Together with the impact assessment, they amount to 662 pages of text. They require time and careful analysis to fully understand. In the coming weeks, I hope to examine some of the key elements one at a time.

I begin with the budgetary allocations by Member States which are included as Annexes to the draft CAP Strategic Plans regulation. This combines the current direct payments and rural development regulations into one.

This has a certain topicality because agricultural Ministers from six Member States – FR, ES, IE, PT, FI and EL – met in Madrid recently to formulate a declaration calling for the CAP budget to be maintained at its current level. This declaration – which is open to agricultural Ministers from other Member States to support – will be presented and discussed at the next AGRIFISH Council on June 18-19.… Read the rest

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Commission Proposals on CAP: Will this become another decade of biodiversity decline?

We are pleased to welcome this guest contribution from Trees Robijns, Agriculture and Bioenergy Policy Officer, NABU (BirdLife in Germany) and Ariel Brunner, Senior Head of Policy, BirdLife Europe and Central Asia, who react to the Commission legislation proposals on the Common Agricultural Policy post 2020 published earlier today.

We have seen it all before: CAP reform. The same old CAP reform. To many of us following the process in detail, we are always in the run up to, in the middle of, or in the aftermath of a CAP reform. It feels like a never ending story of small incremental steps which, only to the absolute “uber-CAP-nerd”, lead in a clear direction.

Today, we had another déjà vu. The Commission had a press conference, NGOs and farmer organisations reacted strongly. Agri ministers meeting in Sofia this weekend will probably welcome the proposal in diplomatic speech and Parliamentarians will start to prepare thousands of amendments.… Read the rest