Tag: cap reform

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Commission projects unchanged sugar market following quota elimination

Further details on the Commission’s expectations for the EU sugar market following the end of sugar quotas in 2015 are contained in its market outlook to 2020 publication published last month.

This medium-term outlook for the EU sugar market is based on a status quo assumption for agricultural and trade policy. The Commission notes that its CAP towards 2020 legislative proposal confirms the existing provisions on expiry of the regime after the marketing year 2014/15. Thus it argues that the policy assumption on the expiry of sugar quotas is in conformity with existing legislation.

In my own review of the legislative proposals I argued that the Commission’s decision not to propose an extension to the sugar quota regime after 2014-15 is a part of the 2013 CAP reform, on the grounds that this was the first time that the Commission had made its intentions clear. But formally the Commission is correct that the current legislation expires in September 2015 and would require a positive decision to extend it.… Read the rest

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The challenge of moving to the regional model

The Commission’s legislative proposals for the CAP post 2013 contain two measures to harmonise direct payments per ha across farms: (i) a move to more uniform payments per hectare across member states, and (ii) a move to more uniform payments per hectare within member states by moving from the historical to the regional model of payments. While both measures are prompted by the desire to have a more uniform distribution of payments per hectare across EU farms, it is useful to keep the measures distinct. For that reason, it is helpful to talk about the convergence of payments across member states, and the flattening of payments within a member state.

The argument for flattening payments within a member state is that differences in the level of payments per hectare due to historical factors can no longer be justified, and that tying the value of entitlements to historical performance is unfair as between farmers themselves.… Read the rest

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The legislative timeline for CAP reform

The publication of the Commission’s legislative package for CAP reform is merely the starting gun for the EU’s legislative procedure to debate the regulations before they can take effect. The regulations now enter the co-decision procedure involving the Council of Ministers and the European Parliament (EP).

In an article this week in the Irish farming press, Mairead McGuinness set out the timeline as seen from the Parliament’s perspective. Mairead McGuiness is the EPP Group shadow rapporteur for the direct payments report contained within the legislative package, and thus centrally involved in formulating the EP’s position.

According to McGuinness, the current timeline envisages that draft reports will be prepared for consideration by the Agriculture Committee by April next, with a vote in Committee taking place in September on the changes proposed by MEPs.

However, she warns that given the complexity of the reforms proposed this timetable is by no means certain and that divergent views may delay the work programme.… Read the rest

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Updated analysis of Commission legislative proposals

The International Centre for Trade and Sustainable Development has now published the final updated version of my paper looking at the trade and development implications of the Commission’s legislative proposals for the CAP post 2013. Apart from making some corrections to the preliminary version, it takes account of the main changes in the Commission’s proposals on October 12th last compared to what was in the heavily-leaked drafts as well as the full impact assessments released at the same time.

The main changes include:
– The replacement of the firm commitment to have a uniform payment per hectare across all land and member states by 2029 in the regulation itself, to an aspirational commitment in the preambular material that member states will work towards this goal in the next financial perspectives period.
– The possibility for Member States to modulate up to 10%, rather than 5%, of their Pillar 1 envelope to enhance their Pillar 2 funds.… Read the rest

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Production effects of moving to flatter structure of direct payments

What might be the production, consumption and trade effects of the Commission’s proposals to redistribute direct payments by moving to a flat(ter) structure of direct payments across the Member States, and to redistribute payments within Member States by moving from the historic basis of farm payments (in the majority of Member States which operate this system) to a regional flat rate system?

A silly question, some might respond, for are not the EU’s direct payments decoupled (leaving aside the continued existence of a share of coupled payments) and thus not meant to have an effect on farm production? If a direct payment is truly decoupled, then moving payments from one farm to another, or from one country to another, will affect relative incomes but not output.

But there is widespread agreement that even decoupled direct payments do have an effect on production, even if there is less agreement on how strong this effect is in practice.… Read the rest

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Updating the base period for SPS entitlements

One of the more significant changes proposed by the Commission in its draft legislative proposal on direct payments is to eliminate those existing entitlements to support which farmers have built up in the past. The basic payment scheme will replace the Single Payment Scheme and the Single Area Payment Scheme as from 2014. The new scheme will operate on the basis of payment entitlements allocated at national or regional level to all farmers according to their eligible hectares in the first year of application.

The proposal to allocate new entitlements on the basis of land farmed in 2014 has provoked a massive protest in Ireland (see, for example, this Irish Examiner story). It is alleged that, in an attempt to build up their claim to entitlements in 2014, farmers are taking back land which is currently leased out, thus creating massive disruption in the land rental market and discriminating against those farmers who are actively farming the land.… Read the rest

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What is the likely cost of greening Pillar 1?

The Commission’s proposals for the design of direct payments after 2013 include a greening component which, according to the draft legislative proposal (yet to be released on 12 October next and thus subject to change) will be mandatory for farmers in receipt of the basic income payment – thus becoming what I called in an earlier post a form of super-cross-conditionality.

In the impact assessment to be released with the legislative proposal the Commission has made some estimates of the cost of implementing these green measures. In this post, I examine these costs using information in the draft version of the impact assessment (Annex 12 Impact of Scenarios on the Distribution of Direct Payments and Farm Income).

This version was completed before June 2011 and the favoured proposal in the draft regulation now differs somewhat from the version examined in June. In particular, the obligation to maintain a green cover during winter has been dropped, but on the other hand the area to be setaside under the ecological focus requirement has been increased from 5% to 7% (see this post for a summary of the draft direct payments regulation).… Read the rest

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Commission’s home truths on the CAP

While the Commission’s Communication on the future of the CAP after 2013 is less remarkable for what it says than what it leaves out, one of the accompanying documents is a fascinating read, and reveals much about how the Commission regards the future of the EU’s €55 billion-a-year farm policy.

Despite its unpromising title, the Consultation Document for Impact Assessment shows there are at least some people in the DG Agri bunker who are engaging their brains on the future of the CAP. What’s more, the document hints we might expect something altogether more radical and ambitious when the Commission’s legislative proposals are made later this year.

Most striking about the document are the home truths told about the state of EU agriculture – admissions that one would rarely, if ever, hear uttered in public by a Commissioner or a senior DG Agri official.

First, European farming is in a parlous economic state and ‘the current policy has a strong focus on income support’.… Read the rest

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Commission's home truths on the CAP

While the Commission’s Communication on the future of the CAP after 2013 is less remarkable for what it says than what it leaves out, one of the accompanying documents is a fascinating read, and reveals much about how the Commission regards the future of the EU’s €55 billion-a-year farm policy.
Despite its unpromising title, the Consultation Document for Impact Assessment shows there are at least some people in the DG Agri bunker who are engaging their brains on the future of the CAP. What’s more, the document hints we might expect something altogether more radical and ambitious when the Commission’s legislative proposals are made later this year.
Most striking about the document are the home truths told about the state of EU agriculture – admissions that one would rarely, if ever, hear uttered in public by a Commissioner or a senior DG Agri official.
First, European farming is in a parlous economic state and ‘the current policy has a strong focus on income support’.… Read the rest

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The Commission communication leak in full

PDF to download. Main text (without footnotes and annex):

EUROPEAN COMMISSION

Brussels, 2910912010
COM(2010) version finale

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future

1. INTRODUCTION

The Common Agricultural Policy (CAP) is confronted with a set of challenges, some unique in nature, and most unforeseen, that invite the EU to make a strategic choice for the longterm future of its agriculture and rural areas.

In preparation for this Communication, the Commission organised an extensive public debate earlier in 2010 that concluded with a conference in July 20101¥ The Council discussed during four successive Presidencies the reform, the European Parliament (EP) adopted an own initiative report on the post-2013 CAP, and its link with the Europe 2020 Strategy and both the Economic and Social Committee and the Committee of the Regions (CoR) have come forward with position papers.… Read the rest