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IEEP briefing on the CAP Health Check

An excellent briefing document on the likely direction of the CAP Health Check – and the political forces at play – has been published by the Institute for European Environment Policy (IEEP). To my mind it is the best overview available at this time and I’m delighted that IEEP experts Tamsin Cooper and Martin Farmer have recently joined the CAP Health Check blog. Read it here (PDF). There is also a short update following the leak of a DG Agriculture draft of the proposals due in November 2007.

… Read the rest
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More on who benefits from farm subsidies

Jack Thurston reviews some recent academic studies, including a recent paper by Stefan Kilian and Klaus Salhofer from the Technische Universität Munich, which make the point that much of the benefit of agricultural support policies does not end up in the hands of farmers who are its intended beneficiaries, but rather benefits landowners. However, my reading of the Kilian/Salhofer paper is that we need to be careful in applying this conclusion to the EU’s Single Farm Payment.

Kilian and Salhofer highlight the requirement in the EU Single Payment Scheme that a farmer must possess an entitlement in order to qualify for the payment.… Read the rest

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The environmental impact of ending set aside

Idling land resources through set aside never made a lot of economic sense and was largely a way of dealing with over production encouraged by the old style CAP. However, many environmentalists felt that set aside encouraged biodiversity. This was particularly the case for the Royal Society for the Protection of Birds (RSPB) which with over a million members, largely urban gardeners whose bird identification skills are sketchy, is a very influential conservationist group in the UK. Defra policy is strongly influenced by the RSPB which has framed the agenda in terms of, for example, using farmland bird populations as an indicator of environmental stress, although they may not the best measure.… Read the rest

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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.… Read the rest

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Commission’s CAP Health Check proposals leaked

The Commission’s draft proposals for the CAP Health Check due to be officially released in November have now been widely leaked in the agricultural press (see the UK Farmers Guardian for one summary).

Much initial reaction has focused on the Commission’s renewed attempt to introduce a cap on the Single Farm Payment amount which an individual farmer can receive. Farmers receiving between €100,000 and €200,000 would face a 10% cut, between €200,000 and €300,000, a 25% cut and over €300,000, a 45% cut.

In the longer run, however, the proposals to move towards a standardised uniform, area-based system for calculating Single Payments from 2009, to eliminate partial coupling of arable payments, as well as to increase the compulsory modulation percentage from 5 to 13% by 2013 are likely to have greater significance for farmers and the direct payments system.… Read the rest

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Council agrees reform of the sugar reform

The Council agreed yesterday the Commission’s proposals to improve the attractiveness of the sugar industry restructuring scheme in order to meet the Commission’s objective of a reduction in 6 million tonnes of sugar quota by the end of the four year transition period 2006-2010 for the current EU sugar reform. As noted in a previous post, this reform target had been threatened by a much lower renunciation of quota in Year 2 of the reform than the Commission had assumed.

The key elements of the ‘reform of the reform’ are

  • The percentage of the restructuring aid to processors which is to be given to growers and processors is fixed at 10 percent, with an additional top-up payment to growers of €237.50 per tonne of quota renounced, payable retrospectively.
… 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