The contribution of rising food prices to the revival of inflation in the eurozone has attracted the attention of the European Central Bank (ECB) in its latest monthly bulletin for December 2007. Eurostat’s flash estimate of inflation for November 2007 on an annualised basis is 3%, compared to an average growth rate of 1.9% in the first three quarters of 2007. This increase has been driven by recent strong energy and food price increases.… Read the rest
Cross compliance: at crossed purposes?
The objectives of the present incarnation of the CAP are the subject of intense debate in policy circles. Cross compliance is seen by some as a way to justify the Single Payment Scheme, by aligning the receipt of largely untargeted subsidy payments to the delivery of public goods. To some extent this is true. Farmers need to meet a set of fairly basic standards centred on pre-existing EU environment, food safety and animal welfare legislation (called Statutory Management Requirements (SMRs) in CAP jargon). They must also respect a set of baseline soil and habitat maintenance standards (collectively referred to as standards for Good Agricultural and Environmental Condition (GAEC)).… Read the rest
CAP direct payments poor value for money
The major weakness of the Commission’s CAP Health Check Communication is its failure to spell out a rationale for maintaining the Single Farm Payment after 2013. Yet another report, this time commissioned by the European Parliament’s Committee on Budgetary Control, lambasts the lack of efficient targeting and ensuing excessive cost of the SFP system. Written by Jorge Nunez Ferrer and Eleni Kaditi of the Centre for European Policy Studies in Brussels, and not yet published, the report examines both CAP market and rural development expenditures from the perspective whether EU interventions add value, that is, whether the benefits of these policies outweigh their costs.… Read the rest
Limited administrative burden of the Single Farm Payment
Economists have long been interested in the costs associated with policies transferring income support to farmers. These costs include not only the resource costs associated with distorting production and consumption choices away from the market optimum (assuming that market prices fully reflect the social value placed on resources and outputs), but also the transactions costs of administering and monitoring the policy, indirect costs associated with distortions in other markets (for example, if tax revenue has to be raised to pay for direct payments or export subsidies), as well as rent-seeking costs.… Read the rest
Public supports 'consumer agenda' in farm policy
A new survey of public opinion released today by the German Marshall Fund of the United States shows strong support for ‘consumer agenda’ in EU and US agriculture policies focused on food safety, the environment and the food supply. There was significantly less support for producer-oriented priorities like providing emergency financial relief to farmers, insuring farmers against unpredictable market conditions and preserving small family farms.… Read the rest
Meat: facing the dilemmas
The excellent Food Ethics published by the Food Ethics Council has devoted its latest issue to this theme. You can read excerpts online here. There are a lot of issues related to increasing meat consumption: climate change; health issues; water scarcity and biodiversity loss from clearing forests to make way for pasture and feed production; and animal welfare, which is certainly not a luxury we can no longer afford.… Read the rest
Commission proposals: so what happens next?
As DG Agriculture’s spokesman Michael Mann has been keen to stress over the past few days since the publication of the Commission’s communication on the CAP health check, this is just the start of the process of deliberation and debate. Dr Tamsin Cooper of the Institute for European Environmental Policy has written a useful briefing on the next steps in the process.… Read the rest
So how green is the Health check “green paper”?
The Commission’s “CAP Health Check” communication acknowledges the fact that European Farming and countryside face unprecedented environmental challenges: continuous biodiversity decline, increasing climate change and a looming water crisis. The Communication fails however to come up with credible proposals for dealing with these challenges. It was hoped that the Commission would use the Health Check to outline a long-term sustainable vision for European farming and land management. Instead, the Communication seems bent on a business as usual scenario. … Read the rest
Specious arguments against limiting payments to largest farms
Initial media reaction to the Commission’s Health Check proposals has been predictable, with most papers picking up as the lead story the Commission’s proposal to apply a tapering reduction to direct payments to larger farms. The Financial Times story was headlined “Communists and royalty fight farm subsidy cuts.” Much was made of the fact that the Commission’s illustrative proposals would reduce the payments received by the Queen of England, who apparently received £465,000 (€650,000) in 2005, by over £140,000 (€192,000). British and German officials were quoted as saying they would oppose these reductions as they were unworkable and undesirable.… Read the rest
Commission proposals lack ambition
Later today the European Commission will present its proposals for changes to the Common Agricultural Policy – for so long an emblem of bureaucracy, waste and injustice. This will be the first reform since details began to emerge from top secret government files about exactly who gets what from the €55 billion Europe spends each year on farm subsidies. After a landmark FOI case by The Guardian in 2005, revelations about farm subsidies paid to the Queen (£466,667 in 2005), the Duke of Westminster (£526,136) and Sir Richard Sutton (£917,650) hit the headlines across Europe.… Read the rest