CAP Reform

The enterohaemorrhagic E. coli (EHEC) ‘cucumber’ crisis raises many questions. The most immediate is the public health dimension. The scale of the outbreak has been described as unprecedented by public health officials and the cause of the outbreak has yet to be localised. To date there have been 18 fatalities, all but one in Germany, and at least 499 people have haemolytic uraemic syndrome (HUS), a life-threatening kidney disease (see update from a German spokesman here). For comparison, according to the University of Edinburgh National Creutzfeldt-Jakob Disease Research & Surveillance Unit, 209 people have died in the EU (168 in the UK alone) from vCJD (‘mad cow disease’) since 1990.

The outbreak also raises questions once again about the governance of the food system – is the mixture of market incentives, public regulation, legal liability and socially-enforced moral standards of behaviour working sufficiently well to warrant consumer trust in the governance of food safety?… Read the rest

It’s customary that on the eve of a reform of the Common Agricultural Policy, Chris Haskins (Baron Haskins of Skidby, an appointed member of the House of Lords) sets out his case for radical change.

In the 2011 edition, Haskins argues for a cut in the CAP budget and a redistribution from farmers in western Europe to farmers in the east. With an outlook of increasing commodity prices, the CAP should focus less on subsidising farmers and more on providing help declining rural areas, particularly in eastern Europe, following the model of EU structural and cohesion policy.

A former Chairman of Northern Foods, one of the UK’s biggest processed food companies, Haskins joins the growing chorus of those rejecting the notion that preserving the CAP is necessary for European food security:

“The main economic justification for an EU common agricultural policy is that, consistent with the rules of the single market, it offers all EU citizens secure and adequate supplies of affordable food.

Stefan Tangermann’s study on Direct Payments in the CAP post-2013 which was released by the European Parliament on February 11th last is a masterly deconstruction of the fragile rationale behind many of the proposals for the redesign of direct payments in the Commission’s Communication on the CAP post-2013 published last November. A powerpoint presentation of his study is also available.

The closely-argued report is divided into five sections, each of which deserves comment in its own right. In this post, I comment on the introductory section entitled The EC communication: another CAP reform?

In this opening section, Tangermann starts from the Commission’s standpoint that a further reform of the CAP is needed to prepare EU agriculture for the challenges of the future. The Communication identifies three challenges of food security, environment and climate change, and territorial balance. Tangermann argues that, while these are real and important challenges, the policy proposals in the Communication are hardly consistent responses.… Read the rest

This week, the French national federation of environmental NGOs, France Nature Environnement (FNE), federation of hundreds of environmental groups, launched a poster campaign that raised considerable controversy. It showed, in a rather shocking way, some (real or alledged) environmental damages caused by agriculture. Adding insult to injury, this took place a day before the annual “salon de l’agriculture”, a big national fair in Paris that attracts close to 1 million visitors and where every politician goes to cuddle farmers. All farmers’ organisations became mad, and claimed that the campaign indiscriminately accused farmers of being polluters. The French Minister of agriculture, Bruno Le Maire talked about “a scandal”. Opening the agricultural fair, President Nicolas Sarkozy said that the poster campaign was a “loathable”, and compared FNE (for some strange reason) to the National Front taking over ongoing debates on the status of islam. Probably under some political pressure, the Paris metro advertising branch refused to display the posters (invoking bizarre reasons like the need for Quentin Tarentino’s approval on the “kill bees” poster below…).… Read the rest

Later this week Agriregionieuropa, the Italian on-line review of agricultural economics and policy, together with the Groupe de Bruges will organize a half-day seminar on “The CAP and the EU Budget” in Ancona, Italy, details here.

Franco Sotte, one of the contributors to this seminar, has produced an interesting analysis of CAP budget expenditure to be presented at an EAAE seminar on ‘Evidence-based Agricultural and Rural Policy Making’ which also takes place in Ancona following the budget seminar.

Sotte’s starting point is that much discussion of the CAP budget is based on proposed expenditure as set out in the multiannual financial framework, but that actual expenditure, as revealed in the EU’s Financial Reports on budget spending, can tell a different story. He notes a number of reasons why expenditure trends in these two series can differ:

• Appropriations for commitments differ from appropriations for payments because it can take time for planned expenditure to actually take place.

One of the innovations proposed in the Commission’s communication on the CAP post-2013 is that more resources in both Pillar 1 and Pillar 2 should be devoted to helping agriculture to mitigate and to adapt to climate change.

“Although GHG emissions from agriculture in the EU have decreased by 20% since 1990, further efforts are possible and will be required to meet the ambitious EU energy and climate agenda. It is important to further unlock the agricultural sector’s potential to mitigate, adapt and make a positive contribution through GHG emission reduction, production efficiency measures including improvements in energy efficiency, biomass and renewable energy production, carbon sequestration and protection of carbon in soils based on innovation. “

In terms of mitigation, the challenge for agriculture is to identify cost-effective mitigation measures which can help the agricultural sector to contribute to challenging greenhouse gas emission reduction targets and the long-term decarbonisation of society.… Read the rest

One of the innovations proposed in the Commission’s communication on the CAP post-2013 is that more resources in both Pillar 1 and Pillar 2 should be devoted to helping agriculture to mitigate and to adapt to climate change.

“Although GHG emissions from agriculture in the EU have decreased by 20% since 1990, further efforts are possible and will be required to meet the ambitious EU energy and climate agenda. It is important to further unlock the agricultural sector’s potential to mitigate, adapt and make a positive contribution through GHG emission reduction, production efficiency measures including improvements in energy efficiency, biomass and renewable energy production, carbon sequestration and protection of carbon in soils based on innovation. “

In terms of mitigation, the challenge for agriculture is to identify cost-effective mitigation measures which can help the agricultural sector to contribute to challenging greenhouse gas emission reduction targets and the long-term decarbonisation of society.… Read the rest

I would like to use this post to draw attention to a recent paper which I wrote for the International Centre for Sustainable Trade and Development which examined how developing countries might be affected by the Commission’s proposals for CAP reform set out in the November 2010 communication. One of the positive features in the communication (and in the accompanying consultation paper for the impact assessment) is the explicit recognition that there is an obligation to consider the impacts on developing countries under the EU’s Policy Coherence for Development commitment.

The next CAP reform will be politically very contentious because it will affect the distribution of payments (both direct payments and rural development payments) between the Member States. However, I argue in this paper that this internal debate has very limited significance for the EU’s trading partners.… Read the rest

Wyn Grant, Professor at Warwick University and an expert on the CAP, blogs on the subject over at commonagpolicy.blogspot.com. In a blog post this week on ‘The subsidies dilemma’, he notes:

I was recently talking to a journalist from an esteemed weekly who has written on the CAP. He commented that when prices were low, the French (as the main defenders of the CAP) said that subsidies were needed to boost farm incomes. When prices were high or volatile, they were needed to ensure food security. He once asked a French minister if there were then any conceivable market circumstances in which an argument could not be produced in favour of subsidies.

How true, how very true. The rest of Wyn’s post is well worth reading.