Is selling 'experiences' a potential growth path for European agriculture?

Three researchers at Leuven University, Jo Swinnen, Kristine Van Herck and Thijs Vandermoortele, in a recent paper in the newly-launched BAE Bio-based and Applied Economics journal put the spotlight on the potential to base future growth in European agriculture on the willingness of consumers to pay a price premium in exchange for various ‘experiences’ (working paper version available here ). They suggest that this may be a more promising growth strategy, at least in some sectors or for some regions, than a more conventional emphasis on producing food, albeit of high quality, at low cost.

Definition of experience goods

The researchers base their proposal on two pieces of evidence.… Read the rest

Old interests in the New Member States

On July 3, a conference was organised on the future of the CAP with the attendance of representatives of six New Member States (Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia) in Rzeszów, Poland. Although the original goal of the meeting was to provide solutions to those issues that affect the CEE agriculture after 2014, a Common Statement of Agricultural Ministers was published, which is a useful source to identify NMS interests in the CAP reform debate.

It is the unanimous opinion of the respective New Member States (NMS) that in its current form, the CAP does not serve the original objectives such as simplification, decreasing administrative burdens and convergence.… Read the rest

Eurobarometer food security survey

What are we to make of the findings in the latest Eurobarometer survey of EU public opinion on Europeans’ attitudes to their own food security? (The survey also covered attitudes to global food security, food quality and the countryside).

On the one hand, only two out of five (43%) respondents are concerned about food security in their own country, while more than half (56%) are either not very concerned or not at all concerned. Only two out of five (40%) respondents are concerned about food security at EU level, while more than half (57%) are either not very concerned or not at all concerned.… Read the rest

The European Parliament report on the measurement of farm support

A variety of estimates of the level of farm support circulate. Many of them rely on creative accounting. For example, during the recent farm bill debate in the US Senate on C-Span television, a Senator claimed that the EU subsidized its farmers seventeen times more than the US, quoting as “evidence” that farm subsidies accounted for 45% of the EU budget, while by contrast the US farm spending was less than 1% of the US federal budget. On the opposite, the Momagri (a French arable crops producers sponsored think tank) published estimates that US farm support was three times higher than the EU one.… Read the rest

Gunfight for CAP Budget Money

It has been clear for some time that most of the key issues of the CAP reform will be negotiated upon in the framework of the negotiations on the Multiannual Financial Framework (MFF) by foreign ministers and heads of state of the EU Member States. The Danish Presidency prepared a special document – a Negotiating Box, which should define all the negotiating issues and facilitate the conclusion of negotiations. The negotiations have thus started to heat up, negotiators have presented their arguments and formed the clubs of like-minded countries. Before the negotiations culminate, expectedly at the turn of 2013, we shall try to define the positions of individual actors on the key issues and speculate on the possible outcome of negotiations on the basis of the available sources (Agra Europe, Agra Focus, internal positions of Member States).… Read the rest

The EU as a destabilising force in world grain markets

I have argued before on this blog that the EU’s policy during the food price spike of 2007-08 in lowering applied tariffs on staple foods may have helped to mitigate the impact of higher food and feed prices on livestock producers and, to some extent, on consumers, but at the expense of exacerbating the global price increases facing other countries, including developing countries.

The EU’s policy of varying applied tariffs within its bound rates contributed to destabilising world market prices just as did the export restrictions applied by other countries, and undermines its moral authority, in the G20 and elsewhere, in seeking strengthened WTO disciplines on export restrictions as a way to enhance global food security.… Read the rest

Negotiations on future CAP have speeded up

Despite the hot summer across Europe, the previous weeks were quite busy in Brussels. On June 18th and 19th 2012, the European Parliament’s Agricultural Committee Rapporteurs presented their four draft reports on the reform on the Common Agricultural Policy, while one week on, on June 25th, these draft plans were confronted with national interests (based on the report ‘The CAP Reform: The State of Play in National Parliaments’) at a meeting between Agriculture Committee MEPs and representatives of national parliaments. This process is due to the Parliament’s newly engaged co-decision powers with the Council based on the Lisbon Treaty. Meanwhile, the Danish Presidency has also submitted its report to the Agricultural Council on the progress achieved during the first half of 2012.… Read the rest

Co-financing rates in Pillar 2

The Agricultural Council meeting on 18 June held a discussion on the proposed rural development regulation in response to a Presidency questionnaire (the webcast of the Council discussion is here). One of the questions posed by the Presidency was:

Is the proposed provision concerning increased EAFRD contribution rates relevant for meeting the objectives of the rural development policy, or should alternative operations qualify to receive a higher rate of co-financing?

According to the minutes of the Council meeting:

Co-financing rates for rural development support are part of the negotiating box for the MFF (2014- 2020). Member states spoke in general terms of the need for a simple and targeted system for financing activities to meet the EU objectives for rural development.

Read the rest

Paper on CAP greening

I presented a paper at a seminar of the European Association of Agricultural Economists today which reviews the debate on greening the CAP in Pillar 1 in the light of the Commission’s original legislative proposal, the discussions in the Council summarised in the Danish Presidency’s progress report this month, and the COMAGRI rapporteurs’ reports.
The message of the paper is that the greening proposals under discussion are a missed opportunity. They serve primarily to try to justify the continuation of the existing level of Pillar 1 direct payments. The Commission’s original proposals for three simple, generalisable measures would lead to limited additional environmental benefits, and the various flexibilities proposed by the Council and COMAGRI rapporteurs would reduce the additional benefits even further.… Read the rest

A mandatory minimum spending requirement on agri-environment-climate change measures in Pillar 2?

The Agricultural Council meeting on 18 June 2012 held a discussion on the proposed rural development regulation in response to a Presidency questionnaire. One of the questions posed by the Presidency was:

Should the Rural Development regulation contain a requirement for a minimum percentage of the EAFRD budget to be spent on environment related actions, and which measures should be taken into account when calculating the spending on environment related actions?

The press release following the meeting highlighted the range of views in the Council on these issues:

Member states broadly support the principle that the CAP should significantly contribute to addressing the challenges concerning environment, biodiversity and climate change mitigation and adaptation.

Read the rest