Tag: degressivity

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What impact will degressivity and capping have?

In my previous post, I calculated the size of the amounts that could be allocated to the degressive area-based income support payment using the minimum and maximum amounts of aid per hectare proposed in the NRPF Regulation of 130 EUR and 240 EUR, respectively. This payment is intended to provide area-based income support for eligible hectares to farmers to address income needs. The purpose of the exercise was to examine the potential allocations to other CAP instruments, for example, agri-environment-climate actions, depending on how much Member States allocated to the degressive area-based payment.

The limitation of that calculation is that it assumed that all hectares would receive these amounts, and thus it took no account of the potential impact of degressivity and capping.… Read the rest

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Does capping direct payments make sense?

CAP Pillar 1 direct payments were originally introduced to compensate farmers for the reduction in intervention support prices following the MacSharry reforms in 1994. This was an important and necessary step to help farmers adjust to a new economic situation. However, assistance for adjustment should only be temporary. As the years have passed, the argument that direct payments are intended as compensation payments has become less and less credible. As result, a number of alternative rationales for the continuation of Pillar 1 direct payments have been proposed.

These payments are variously justified as addressing low farm incomes, as a necessary support for EU food security, as providing a safety net for farmers against unexpected market shocks, as compensating for higher regulatory standards and as ensuring more sustainable management of natural resources.… Read the rest