Category: Blog posts

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Public goods in the spotlight

What’s in a word? Or, to be more specific, two words? Where CAP and the term ‘public good’ is concerned, quite a lot. A new briefing note from the Institute for European Environment Policy takes a look at how the slogan ‘public money for public goods’ has come to define the political debate over the future shape of the CAP.

The briefing looks at the evolution of the idea of environmental public goods as a justification for future public expenditure on agriculture. It also sounds a note of caution, that’s worth repeating here:

The increasing visibility of the public goods concept however, has resulted in the concept being interpreted in different ways.

… Read the rest
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Budget rumbles in Brussels

The summer break has come and gone and with the European Parliament back in session, Commissioners back from their yachts and their fonctionnaires back at their desks, the future of the EU budget is back in the spotlight.

As part of the December 2005 heads of government agreement on the 2007-2013 financial perspective it was agreed that there would be a midterm ‘budget review’ in 2008-09 which would look at all areas of the EU budget. including the two hottest political potatoes – the large share of funds going to the CAP and the British budget rebate. The review began with a big public consultation led by the then Budget Commissioner Dalia Grybauskaite, who pulled no punches in describing the budget as largely out of tune with Europe’s current and future challenges.… Read the rest

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Why are we so lousy at measuring farmers' incomes?

It has been heard and written everywhere for the last 18 months: farm incomes have gone down dramatically. After two years of carpet bombing by the media, with anything from 60 percent price fall in prices to desperate farmers spreading their milk in the fields, the consultation on the future of the CAP organized by Commissioner Ciolos suggest that many, in the civil society, are convinced that EU farmers are starving. As an external reviewer of the synthesis report of this consultation, I saw a large sample of individual contributions. My feeling is that for many people, the current low farm incomes justify subsidies, border protection and paying more attention to mechanisms to support farm prices.… Read the rest

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Why are we so lousy at measuring farmers’ incomes?

It has been heard and written everywhere for the last 18 months: farm incomes have gone down dramatically. After two years of carpet bombing by the media, with anything from 60 percent price fall in prices to desperate farmers spreading their milk in the fields, the consultation on the future of the CAP organized by Commissioner Ciolos suggest that many, in the civil society, are convinced that EU farmers are starving. As an external reviewer of the synthesis report of this consultation, I saw a large sample of individual contributions. My feeling is that for many people, the current low farm incomes justify subsidies, border protection and paying more attention to mechanisms to support farm prices.… Read the rest

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Production effects of agri-environmental programmes

EU agri-environmental policy dates back to the mid-1980s and became a mandatory part of the EU agricultural policy toolkit in 1992. Initial implementation in many Member States emphasised policies designed to mitigate the environmental harm associated with agricultural intensification (e.g. by paying farmers to lower fertiliser inputs) but over time and under Commission prodding the objectives have shifted more to environmental enhancement.

Around two-thirds of EU agri-environmental programme payments are classified in the OECD’s Producer Support Measure (PSE) calculations as ‘payments based on input constraints’. Such programmes would be expected to reduce EU production. Empirical attempts to measure the impact of the CAP on EU production and world market prices generally ignore their production-restraining impact and thus tend to over-estimate the world market effects of EU agricultural policy.… Read the rest

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Inside the echo-chamber

Today and tomorrow, DG Agriculture is organising a tightly controlled, invitation-only ‘public conference’ on the future of the CAP. As someone who has previously expressed mildly dissenting opinions I’ve not been invited. It’s probably a small mercy as life is really too short to spend two days listening to an assorted crowd of farm union officials, docile civil servants and tame academics parrot the DG Agriculture mantra: ‘we need to preserve the current CAP and its budget to… protect the environment / avert mass starvation / keep farmers from committing suicide (delete as appropriate)’.

There are a few people on the speakers list who might be expected to take issue with DG Agriculture’s infamous doublethink but in a crafty move they have mostly been appointed as session chairs or rapporteurs.… Read the rest

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Carbon efficiency and trade policy

In an earlier post, I wondered whether there were data on the relative carbon efficiency of agricultural production in Europe versus third countries. A recent FAO study arising from a collaborative effort by FAO and the International Dairy Federation which assesses GHG emissions from the dairy food chain throws light on this. The study uses a Life Cycle Analysis (LCA) approach, and thus includes the land use change induced by the consumption of feed (principally soybeans) in intensive dairy systems.

The results are unambiguous:

“A global trend emerging from the results is the lower level of emissions per unit of product in intensive compared to extensive systems.

… Read the rest
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BirdLife takes aim at Lyon

On the letters pages of this week’s European Voice, Ariel Brunner, head of EU policy at Birdlife International, has launched a stinging attack on the European Parliament’s agriculture committee. It’s worth republishing in full.

Dear Sir,

The result of this week’s vote on George Lyon’s report, ‘The Future of the CAP after 2013’, is clear evidence that the European Parliament’s Agriculture Committee is more interested in protecting the privilege of vested interests than creating a policy fit for the 21st century.

The report robustly defends the direct payment system, yet provides no evidence for its claims that direct payments help ensure European food security, meaningfully stabilise farming incomes or secure environmental benefits.

… Read the rest
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The worst case scenario examined

A new study from the University of Wageningen in the Netherlands has attempted to model the effects of the abolition of EU farm subsidies. The authors of the report state that their study is very much a ‘worst case assessment’ since,

“It does not take into account farmers’ behaviour, although the past has shown that farmers do adapt to changes in the Common Agricultural Policy. It also assumes a fixed cost structure and abstracts from changes in factor prices and structural change, all elements which would reduce the impact of reform on farm incomes.”

The report makes it clear that the effect of subsidies – and their removal – is not felt evenly across Europe.… Read the rest

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The future of direct payments

As Valentin’s blog post yesterday explains, the CAP is not only a European agriculture policy, it’s a European income redistribution policy. The centrepiece of the CAP is the €42 billion a year in ‘direct aids’ or income support to farmers, funded entirely from the pooled EU budget. Valentin points out that in an era of fiscal austerity, the idea of billions of euros moving from one country’s taxpayers to another country’s farmers is likely to be politically controversial. Particularly when the biggest payouts go to Europe’s wealthiest citizens and most profitable companies.

As national governments decide by how much they are going to pay of nurses and school teachers, how many university places they will cut and which taxes they are going to have to increase, the idea that aids to farmers are ringfenced from cuts will come as a surprise to many.… Read the rest