Tag: featured

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Waking up to Brexit – two weeks on

In Charles Dickens’ Oliver Twist, nine-year old Oliver, fed up with the miserable gruel he and the other boys in the parish workhouse were given, walks up to the master and asks for more. The next day, there was an announcement on the workhouse gate offering five pounds to anyone willing to take Oliver off the hands of the parish.

The UK, it seems, also wants more from the European Union, not only access to the single market but also exemption from the free movement of labour. It has put not one, but two Olivers, to work on this request.… Read the rest

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Supply management in milk policy

Over on the ARC2020 website, they are having a debate on the #MilkCrisis to which I was asked to contribute. Below is my contribution to that debate.

“The weighted average milk price for the EU-28 in May was 26.6 c/litre, a price last seen during the last trough in the price cycle in 2009 when the milk price bottomed out at 24.39 c/litre. The reasons for the current downturn are well known.

Global dairy product prices reached record levels in 2014. EU milk prices reached a record high of 40.2 c/litre in the winter of 2013/2014, averaging 37.3 c/litre over the 12 months in 2014.… Read the rest

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When is enough taxpayer aid enough?

The article below was published in the Irish Farming Independent on Tuesday 17 May (the original article can be read by clicking on this link and choosing the ‘Continue to use Press Display’ option). The article addresses the high dependence of Irish agriculture on public support, but the question I raise has, I think, wider relevance for other EU member states as well. With expectations growing that the June Agricultural Council may announce yet another aid package for the agricultural sector, my question is whether there is a vision for European (and not only Irish) agriculture in which this heavy dependence on public support for income in the sector can be reduced.… Read the rest

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Much ado about nothing in TTIP leaks on food safety standards

Disputes over food safety standards – what in the language of trade policy are called sanitary and phytosanitary standards (SPS) – have been at the heart of many transatlantic trade rows between the US and the EU. We can think of the EU bans on the import of hormone-treated beef, or pork treated with growth-promoting additives, or poultry washed in antimicrobial rinses to reduce the amount of microbes on meat. As a result, the potential impact of the ongoing negotiations to reach a Transatlantic Trade and Investment Partnership (TTIP) free trade agreement between the US and EU on EU food standards has, rightly, attracted a lot of attention and no little anxiety.… Read the rest

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Milk policy in the EU – a case of policy incoherence

While milk producers in the EU struggle with low milk prices, the EU and its member states struggle to come up with a coherent policy to address the issue. Milk prices will not recover until there is a better balance between supply and demand. I have previously written a number of posts (here and here) in which I have described the policy responses introduced in response to the sharp fall in milk prices since their record high in early 2014.

These responses include measures designed to reduce supply. Specifically, the Commission has activated Article 222 of the CMO Regulation which suspends competition law in the case of producer organisations, co-operatives and inter-branch organisations and allows them to voluntarily limit supply with a view to raising the price of milk.… Read the rest

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The dependence of EU farm income on public support

In spite of the substantial reforms in the structure of the CAP over the past two decades, EU agriculture remains hugely dependent on public support. The importance of public transfers, including direct payments, to EU farmers can be shown in various ways. One indicator is the importance of direct payments relative to the value of total output in the total revenue of farms (used by DG AGRI in this report on EU farm income). We can also focus more directly on the role that public transfers play in sustaining farm income. Here, there are two possibilities depending on the definition used for farm income – whether this is taken as factor income or entrepreneurial income (using the definitions in the Eurostat Economic Accounts for Agriculture, EAA).… Read the rest

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Use of risk management tools in the CAP

It has long been recognised that greater price and income volatility would accompany the move to a more market-oriented Common Agricultural Policy (CAP). Already in the run-up to the Fischler Mid-Term Review (MTR) in 2003 which led to the decoupling of direct payments, the Commission published a working document on risk management tools for agriculture, with a special focus on insurance, in 2001. The Council MTR agreement mandated the Commission to study specific measures to address risks, crises and natural disasters that agriculture may face. This led to a Communication from the Commission in 2005 on risk and crisis management in agriculture which discussed different instruments that could be implemented in the CAP.… Read the rest

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Preparing for the MFF Mid-Term Review

The EU budget is under increasing pressure in the face of both new and unexpected expenditure demands. Already, in the first two years of this Multiannual Financial Framework (MFF) period 2014-2020, virtually all of the flexibility instruments which were put in place have been fully utilised, in part to fund the incoming Commission’s flagship project for a European Fund for Strategic Investments, and in part in response to the large number of arrivals of asylum-seekers, refugees and migrants as well as the terrorist attacks in Europe. In total, around €12 billion has so far been mobilised under the various flexibility instruments, leading one commentator to observe that “the EU budget had been flexed to the maximum”.… Read the rest

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Further note on EU farm income trends

In my previous post, I discussed recent EU farm income trends based on recently-updated Eurostat data. Earlier this week, DG Agriculture and Rural Development released an update of its CAP Context Indicators. These are part of a set of CAP Indicators linked to output, results and impact which are aimed at measuring the effects of policy measures (the value of these indicators is discussed by Koester and Loy in this post).

The Context Indicators are intended to monitor general contextual trends in the economy, environment and society which may affect the performance of the CAP. There is a wealth of useful information in the short fact sheets which accompany each indicator.… Read the rest

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Recent trends in EU farm incomes

Earlier this month, without any fanfare, Eurostat produced its estimates of farm income for 2015 (see its database domain aact_eaa06 under the Economic Accounts for Agriculture, EAA). Given the noisy campaign by the farm lobby in recent months for additional support to the sector, one would expect the figures to show a sector in dire straits, reeling from crisis. There are, of course, individual sectors in trouble. There are individual member states where farm incomes over the past two years have taken a very serious hit. And there are individual farmers in all sectors, particularly those who are heavily borrowed, who have run into financial difficulty.… Read the rest