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We need a British Ecosystem Services Policy not a British Agricultural Policy

We are delighted to bring you this guest post by Professor Ian Hodge of the Department of Land Economy, University of Cambridge on the topic of UK policy towards agricultural land after Brexit. The views expressed are his own and should not be attributed to any organisation with which he is associated.

Brexit requires the United Kingdom to develop its own policy towards agriculture and rural land to replace the Common Agricultural Policy. This must recognise the multiple benefits and costs associated with rural land use and promote the integrated management of rural land in the long term public interest through a British Ecosystem Services Policy (BESP).

The UK must have a new policy for rural land

Over the past forty three years, agriculture in the UK has been subject to the guidance and control of the Common Agricultural Policy (CAP). As it has lurched from crisis to crisis, it has evolved from a policy focussed primarily on securing European food security through intervention in agricultural commodity markets towards a broader-based, more nationally differentiated policy concerned with the support of farm incomes and the promotion of sustainable farming.… Read the rest

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More on the future of direct payments

Yesterday, I had the privilege of presenting my report on the future of direct payments to a workshop on the future of the CAP after 2020 organised by the AGRI Committee in the European Parliament and its Policy Department (AGRI Research). I reproduce below my statement to the workshop which attempted to convey the flavour of my report.

It is an honour to be invited to address you today on the background note that I have prepared on the future of direct payments. Direct payments accounted for around 72% of the CAP budget and for just less than 30% of the EU budget in recent years. They are also an important source of income on many farms. They are therefore central to the debate on the future of the CAP.

Direct payments came about largely in response to successive reforms of the CAP. In the most recent reform, an important innovation was to convert a 30% share of direct payments into a greening payment to farmers respecting certain agricultural practices beneficial for the climate and the environment.

… Read the rest
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Bibliography of proposals for CAP post 2020 Feb 2017

As the debate on ‘modernisation and simplification of the CAP’ in the period post 2020 gathers pace, I thought it would be useful to start a page which brings together relevant contributions from political, think tank, academic, industry and NGO sources as well as relevant blog posts. I will plan to update this occasionally as new contributions are made. There will inevitably be a bias towards contributions in the English language. Readers are very welcome to draw my attention to omissions which might be added to this page.

Political and official documents (listed in time sequence)

Dutch Government, Food of the future – the future of food, Background paper for the informal AGRIFISH Council, 24-25 May 2016.
French Government, A reformed CAP for competitive, sustainable and resilient agriculture, Contribution to the informal AGRIFISH Council, 24-25 May 2016
Conclusions of agricultural Ministers gathered at Chamborg at the invitation of the French Agriculture Minister Stéphane Le Foll, 2 September 2016
The Cork 2.0 Rural Development Declaration, 6 September 2016.… Read the rest

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The US farm safety net

In its most recent Farm Bill in 2014, the US eliminated its decoupled direct payments, in part because it was hard to justify making income support payments to farmers at a time when farm incomes were booming due to favourable prices. Instead, it substituted a new set of counter-cyclical payments as part of the US farm safety net. At the same time, it expanded the scope of its federal crop insurance programmes by introducing a new programme to cover ‘shallow losses’ not normally covered by these programmes.

These US developments have led some in Europe to argue that the CAP should move in the same direction. Direct payments should be reduced and the money used instead to support insurance products for farmers or to fund counter-cyclical payments. This blog post does not discuss the merits of these proposals (for discussion, see this report prepared for the European Parliament’s COMAGRI). The US programmes are not widely known.… Read the rest

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The future of direct payments

My previous post highlighted the somewhat muted commitment in the Commission’s 2017 Work Programme to “take forward work and consult widely on simplification and modernisation of the Common Agricultural Policy to maximise its contribution to the Commission’s ten priorities and to the Sustainable Development Goals. This will focus on specific policy priorities for the future….”.

Member States as well as the European Parliament are also beginning to prepare their positions on what may or may not become the next CAP reform. Next week, on November 8th in Brussels, the European Parliament’s COMAGRI and Policy Department B are organising a workshop on Reflections on the agricultural challenges post 2020 in the EU: preparing the next CAP reform. To prepare for this workshop, three background notes were prepared for COMAGRI covering the future of direct payments, the future of market measures and risk management schemes and the future of rural development. I have contributed the note on the future of direct payments.… Read the rest

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Has the starting signal sounded for the next CAP reform?

Yesterday, the Juncker Commission released its third annual Work Programme for 2017. This year’s Work Programme proposes 21 key initiatives as well as a further 18 REFIT proposals intended to improve the quality of existing EU legislation. In addition, the Commission Work Programme identifies 34 priority pending proposals made in the past two years where it seeks swift adoption by the Parliament and Council.

The Work Programme Communication contains two specific references to agricultural policy development. The full paragraph reads as follows:

The Commission will take forward work and consult widely on simplification and modernisation of the Common Agricultural Policy to maximise its contribution to the Commission’s ten priorities and to the Sustainable Development Goals. This will focus on specific policy priorities for the future, taking account of the opinion of the REFIT Platform, and without prejudice to the Commission proposal to revise the Multiannual Financial Framework. As concerns the position of farmers in the food supply chain, in the light of the outcome of the ongoing work of the Agricultural Markets Task Force and the High Level Forum on the food supply chain, the Commission will consider further action as necessary.

… Read the rest
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Mitigation potential in EU agriculture

In my previous post on this blog, I noted that the Commission’s impact assessment (IA) accompanying its presentation of the new Effort Sharing Regulation (ESR) proposal concluded that very little additional agricultural mitigation is expected in the period 2021-2030, over and above what is projected to occur under current policies.

Two possible conclusions might be drawn from this finding. One is that the agricultural sector lobby organisations have used their political clout to ensure that the sector is required to do as little as possible to contribute to the EU’s 2030 climate targets. This reaction was advanced by some NGO activists in response to the post.

The other explanation is that it is difficult (and expensive) to achieve additional agricultural mitigation above and beyond the business as usual scenario. This was the view of the European Council in October 2014 when, in agreeing the EU’s 2030 climate targets, it noted the lower mitigation potential of the agriculture and land use sectors.… Read the rest

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Is agriculture off the hook in the EU’s 2030 climate policy?

In October 2014, the European Council agreed the 2030 policy framework for climate and energy policy. The framework sets out the European Union (EU)’s commitment to a binding target of at least a 40% domestic reduction in economy-wide greenhouse gas (GHG) emissions by 2030 compared to 1990, with the reductions in the Emission Trading System (ETS) and non-ETS sectors (NETS) amounting to 43% and 30% respectively by 2030 compared to 2005. The European Council also set an EU target of at least 27% for the share of renewable energy consumed in the EU in 2030, and an indicative target at the EU level of at least 27% for improving energy efficiency in 2030 compared to projections of future energy consumption based on current trends. This will be reviewed by 2020, having in mind an EU level of 30%.

In a previous post, I examined the likely treatment of agriculture in this 2030 Climate and Energy Framework in the run-up to the European Council meeting which agreed the 2030 targets.… Read the rest

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How external influences have shaped the CAP

When the external impact of the Common Agricultural Policy (CAP) is discussed, it is often in the context of evaluating the CAP’s impact on world markets and third countries. For example, there is a substantial literature which looks the coherence of the CAP with the EU’s development co-operation objectives by examining its impact on developing countries (see my 2014 review chapter here).

In a new study for the AGRI Committee of the European Parliament, Professor Alan Swinbank of the University of Reading turns this traditional focus on the impact of the CAP on world markets on its head. His study The Interactions between the EU’s External Action and the Common Agricultural Policy instead looks at how the external dimension of the EU – including trade policies pursued through the WTO and other international obligations and its development co-operation activities with neighbouring states and developing countries – have influenced the evolution of the CAP.… Read the rest

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Impact of Brexit on the EU budget

In a post last month, I made some estimates of the likely impact of Brexit on the CAP budget and which member states would have to stump up if overall CAP spending were to be maintained following a UK exit from the EU. These estimates were based on particular assumptions about how to calculate member states’ notional contributions to the CAP budget and how to calculate the CAP share of the overall UK rebate.

Of course, Brexit would have budgetary consequences not only for the CAP but for the UK net balance of contributions to all EU policies and for the overall EU budget. There has been controversy in the UK over the exact size of the UK’s net contribution to the EU budget (which, conversely, also represents the budget gap to be filled by the remaining member states if the level of EU spending in the remaining EU-27 countries and outside is to be maintained after Brexit).… Read the rest