One of the innovations in the 2013 revision of the CAP Basic Acts was to extend a formal system of monitoring and evaluation of the CAP’s performance beyond Pillar 2 rural development, where it had been long-established, to also cover Pillar 1 direct payments and market management. This Common Monitoring and Evaluation Framework (CMEF) was set out in Article 110 of the Horizontal Regulation. This requires the Commission to measure and assess the combined impact of all CAP instruments in relation to three common objectives set out in this Article.
The three objectives set out for the CAP (which essentially ‘reinterpret’ the objectives contained in Article 39 of the Lisbon Treaty) are:
• viable food production, with a focus on agricultural income, agricultural productivity and price stability;
• sustainable management of natural resources and climate action, with a focus on greenhouse gas emissions, biodiversity, soil and water;
• balanced territorial development, with a focus on rural employment, growth and poverty in rural areas.… Read the rest
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.… Read the rest
EU’s declining importance in agrifood trade
The fact that twelve countries reached agreement on the terms of the Trans-Pacific Partnership free trade area last week (albeit ratification is by no means assured) underlines the changing geography of international agrifood trade. The EU is still an important player, but it is remarkable how quickly its importance is declining as other exporters make their appearance and other import markets grow in size (see this post for a previous discussion). The table below shows the trends over the past two decades (click to enlarge).
The table shows the EU’s share of global exports and imports of agrifood products, but excluding fish (SITC 03).… Read the rest
What biodiversity benefits can we expect from EFAs?
The recent release by the Commission of its Mid-Term Review of the EU’s 2020 Biodiversity Strategy makes for sorry reading when it comes to Target 3 “To increase the contribution of agriculture and forestry to maintaining and enhancing biodiversity..”. Specifically, Target 3A dealing with agriculture had the following objective:
… Read the restBy 2020, maximise areas under agriculture across grasslands, arable land and permanent crops that are covered by biodiversity-related measures under the CAP so as to ensure the conservation of biodiversity and to bring about a measurable improvement in the conservation status of species and habitats that depend on or are affected by agriculture and in the provision of ecosystem services as compared to the EU 2010 Baseline, thus contributing to enhance sustainable management.
Does farm size matter?
On October 20th next I will take part in a workshop organised by DG AGRI at the Milan EXPO on the subject “Structural realities in EU agriculture: Does farm size matter?” The aim of the workshop is to discuss the challenges and opportunities brought about by the structural change of the EU agricultural sector for a) the up- and downstream industries, b) EU rural areas and c) the sustainability of agricultural production in Europe.
The debate on farm size
There is a long history in Europe of interest in the structure of agricultural holdings. Many European countries have had land legislation in place with the objective of maximising the number of farm holdings or limiting the maximum farm size.… Read the rest
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.… Read the rest
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.… Read the rest
Informal Agricultural Council to discuss climate-smart agriculture
During the next two days (14-15 September) the Luxembourg Presidency invites agricultural ministers to an informal Council meeting which had been intended to focus on agriculture and climate change. Because of Commissioner Hogan’s absence through illness from last week’s Council meeting it seems that a good part of the meeting will be devoted to continuing discussions on the EU response to low milk prices. The time available for the discussion on how agriculture can best address the challenges of mitigating climate change will thus be curtailed.
However, the Luxembourg Presidency has prepared a very useful background paper intended to set the scene for discussions between the Ministers in three working groups.… Read the rest
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.… Read the rest
€500 million farm aid package announced
The farm aid package announced by the Commission (in the form of Vice-President Jyrki Katainen in the absence of Commissioner Hogan due to illness) at the extraordinary Agriculture Council yesterday exceeded the expectations raised by the Presidency background paper in a number of respects (the elements of which related to dairying I discussed in this post), but fell short of what some Ministers had sought and what the farm organisations deemed satisfactory. The Council’s conclusions can be accessed here.
In my view, the package is a measured response to the difficulties in some specific farm sectors and, indeed, the Commissioner has held his nerve in the face of demonstrations and protests.… Read the rest