Category: Blog posts

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More on capping direct payments

Much initial reaction to the Commission’s leaked Health Check proposals has focused on its renewed attempt to introduce a cap on the Single Farm Payment amount which an individual farmer can receive. In fact, the proposal does not amount to a cap in the sense of an absolute ceiling, but takes of the form of a tapered payment Farmers receiving between €100,000 and €200,000 would face a 10% cut, those receiving between €200,000 and €300,000, a 25% cut and those receiving over €300,000, a 45% cut. Jack Thurston’s post yesterday highlights the limited impact the measure will have.

It might be useful to put the Commission’s proposal in some historical perspective. Capping was part of the Commission’s initial reform proposals in each of the past three CAP reforms – the 1992 MacSharry reform, the 1999 Agenda 2000 reform and the 2003 Mid-Term Review. In this post I review the evolution of this concept and corroborate the implications of the Commission’s Health Check proposals.… Read the rest

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Why farmers in the New Member States love the CAP

Jerzy Wilkin of Warsaw University in a recent paper has summarised the agricultural experience in the New Member States (NMS) under the CAP since they joined the EU in 2004. One of the points he highlights is the change in attitudes among farmers to the EU particularly in Poland, the largest of the New Member States. Although ex ante studies had suggested significant gains to agriculture as a result of accession, farmers were generally fearful and negative towards membership prior to 2004. Three years later, the situation is transformed. The share of Polish farmers supporting Poland’s accession to the EU has risen from 23% in 1999, to 38% in 2002, to 66% in 2003 and to 72% in 2005.… Read the rest

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Plus ça change?

Sarko has done it again. In a brilliant media stunt, he has managed to grab the headlines and project a dynamic image of a changing France, in “rupture” with the Chirac era. I don’t want to ruin the party, and I certainly hope France is moving forward, but his speech is worth a closer look. Yes, he is promising a brand new CAP. But if you look at the few contents, it all sounds quite “déjà vue”. … Read the rest

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Danish parliament unanimously calls for elimination of CAP support

Some Danish colleagues told me recently that the Danish Parliament on 30 May last unanimously passed a resolution requiring the Danish government to propose a strategy for how it would actively work for the elimination of EU agricultural support. The strategy should include a timeframe and plan of activities which should take into account the planned CAP Health Check in 2008 and the review of the EU budget in 2009. The strategy should be presented to Parliament before the end of 2007. … Read the rest

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Get paid for blogging the CAP!

In the six months since it was launched, the CAP Health Check blog has established itself as the best place on the web for news, views and debate on the future of European food, farming and rural policy. We are now looking to expand our team with new voices and have secured funding from the William and Flora Hewlett Foundation so that we can now pay bloggers a modest amount in recognition of their contribution to the debate on the future of the CAP.… Read the rest

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Australian report raises queries on CAP reform

The Australian Bureau of Agricultural and Resource Economics (ABARE) has long been a consistent critic of the CAP. In its latest report The European Union’s Agricultural Policy: A Stocktake of Reforms it acknowledges the EU’s reform efforts to date, but highlights areas where more needs to be done. Its main conclusion is that, while the EU has been changing the form of its agricultural support policies toward ‘decoupled’ payments, very little has been done to reduce the level of support. In particular, substantial support and protection have been retained through tariffs and tariff quotas, and member states have retained some ‘coupled’ payments.… Read the rest

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Biofuels come to rescue of EU sugar market in medium-term

DG Agri published its annual Prospects for Agricultural Markets and Income in the EU for the period 2007 through 2014 at the end of July. In this post I discuss the Commission’s latest view on the outlook for the EU sugar market. The EU’s sugar market reform agreed in November 2005 has been less than a thundering success in making progress towards its objective of reducing domestic production by 6 mio tonnes of white sugar annually. White sugar stocks remain high, and success in maintaining market balance through 2014 will depend on the quantity of imports realised under the EBA (Everything But Arms) scheme and the future take up of restructuring aid. However, biofuels demand has emerged as an unexpected source of demand for sugar, and could absorb 10% of sugar production from 2012 onwards.… Read the rest

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Growth rates for global food demand set to fall

In a previous post, I discussed the significance of the current buoyant markets for dairy products for the likely success in pursuing further reform of the EU dairy regime. The insight that world market conditions may influence the trajectory of CAP reform can also be extended to other CAP regimes. Producers have not been as optimistic regarding long-run price trends for agricultural commodities for many years. Food demand prospects appear bright, driven by population growth and rising incomes in many emerging markets. Non-food demand, particularly for biofuels, is a further positive driver. Many believe that, after many false dawns, we really are on the cusp of reversing the long-run decline in real agricultural prices since the Second World War and entering a Malthusian world. But at least one element in this argument does not hold water, according to a recent FAO report looking at the prospects for world agriculture towards 2030/2050.… Read the rest