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The political economy of eliminating sugar quotas in 2015

The Commission’s legislative proposals for the CAP after 2013 published in October 2011 include no proposal to continue the sugar production quota regime. An intense struggle is underway between EU sugar producers who want an extension to the quota regime and sugar users who support the Commission’s proposal. We review the political debate in this post.
Opponents of sugar quota elimination

The European Committee of Sugar Manufacturers (CEFS) (here and updated here) accepts that quotas will end in the long term, but supports the continuation of the quota system until 2020 rather than 2015. It argues that the EU sugar industry has actively engaged and invested to further improve its competitiveness and efficiency since the 2006 reform of the sugar CMO. It seeks an additional five years to enable the European sugar industry to continue this improvement process and to capitalise on long term infrastructure investments.
They highlight the stability of the strictly regulated EU market, arguing that there can only be losers from the volatility that a liberalised sugar market would entail.… Read the rest

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Where stand the MFF negotiations on the CAP?

This post reviews the state of play regarding the MFF (multi-annual financial framework) negotiations in relation to the CAP budget and review of the CAP regulations post-2013.
The MFF negotiations take place in the General Affairs Council (GAC) attended by member states’ European Ministers or Secretaries of State on the basis of a ‘negotiating box’ paper drawn up by the Danish Presidency. This paper outlines the main elements and options for the MFF negotiations. It is updated as the negotiations move forward, and forms the basis for an agreement of the European Council. Once an agreement is reached, its content feeds into the legislative work on the different acts.
For those familiar with WTO agricultural negotiations, the negotiating box paper is similar to the draft modalities document presented by the Chair of those negotiations, filled with square brackets and alternative formulations for different paragraphs indicating areas of disagreement. The intention is to gradually remove the square brackets and reduce the number of alternative formulations over time as the negotiations proceed.… Read the rest

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Achieving green growth in EU agriculture

In one month’s time the Rio+20 international conference on sustainable development will take place with a focus on the ‘green economy’ and environmental governance. Green growth is the pursuit of economic growth and development, while preventing environmental degradation, biodiversity loss and unsustainable natural resource use.
The European Commission has launched several initiatives under the Europe 2020 strategy to boost the green economy. A key aspect of this strategy is the Roadmap for a resource-efficient Europe, which sets out a strategic framework for the efficient use of natural resources in Europe. Other initiatives include the OECD’s horizontal strategy for Green Growth, while the UNEP recently introduced its Green Economy Initiative.
What makes the green growth concept attractive to policy-makers and businesses is the idea that taking account of environmental concerns is not just a burden, a constraint on growth, but can be a source of growth and new jobs. A number of EU member states have made greening the economy and creating new opportunities for green business a growth priority with a strong emphasis on sustainable growth, eco-innovation and cleantech industries.… Read the rest

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Silence please: The second act has just started on greening

Latest evidence shows that negotiations on greening have moved to their second stage. Since 12 October 2011, numerous critiques have arisen regarding the greening proposals criticised as ineffective and overly-restrictive for farmers. As a response to these, the European Commission proposed making some farming practices ‘equivalent’ to the three greening measures last Tuesday. Practically, this means that farmers who are members of certain agri-environment and certified national schemes could be exempt from at least one greening measure. Moreover, the definition of ‘permanent grassland’ are proposed to be widened to include other grazing areas and farms of less than ten hectares could be exempted from certain requirements like diversifying crops.
This new proposal raises, as always, several new questions. First, if participation of agri-environment programmes would qualify for the greening payment, farmers might result in a double funding as the same activity would be supported from both pillars. Second, this suggests that agri-environment programmes provide us the same public goods as the new requirements would do and if so, I wonder who and on what basis would evaluate this argument.… Read the rest

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Delivering environmental benefits through agri-environment schemes

Downloaded from http://www.flickr.com/photos/13847552@N03/3906560447/ under Creative Commons licence

The ‘big idea’ in the Commission’s legislative proposals for the reform of the CAP post-2013 is greening, to be implemented by requiring all farmers in receipt of the basic payment to adopt three measures – crop diversification, ecological focus areas and the maintenance of permanent pasture – as appropriate. While there is a broad acceptance that the CAP should focus more on environmental objectives, there is still huge debate on the size of this shift and on the efficacy and relevance of the Commission’s proposals.
One of the main criticisms from member states has been the inflexibility of the proposals which are designed in a ‘one size fits all’ manner (for example, see the recent speech by UK Minister Caroline Spelman on the Commission’s greening proposals). Member states are seeking greater flexibility in the greening practices to be implemented, either in the form of a menu approach or through automatic qualification of farms following approved management practices as in organic farming, the so-called ‘green by definition’ approach.… Read the rest

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Who needs the Basic Payment Scheme?

A Basic Payment Scheme (BPS) is about to replace the SPS and the SAPS from 2014, therefore payment entitlements obtained under SPS shall expire on 31 December 2013. Under the new BPS, entitlements will be allocated to farmers who apply for it by 15 May 2014 and if he/she has either activated at least one payment entitlement under the SPS in 2011 or claimed support under the SAPS. If lacking such a status, a farmer will need to either make an application to the national reserve or rely on the contract route. Moreover, if a farmer transfers any entitlement before 2014, they have lost the right to make any further transfers. It is unclear why such a change in entitlements is necessary or desirable, especially since it seems totally unrelated to the two principle aims of the payments – income support and payment for environmental public goods. However, the entire farming sector in Europe seems to be affected in many ways.… Read the rest

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The greying of Europe's farmers

Problems in the generational transfer of farms have been a focus of EU agricultural structures policy since the 1990s and in individual member states for an even longer period. Europe’s farmers are getting older, and the shortage of ‘new blood’ entering the industry is frequently seen as a problem requiring a policy response to correct.
The ageing of the agricultural population results from a combination of two things: a reduced rate of entry by new young recruits, and a reduced rate of retirement or exit by older farmers. This is taking place in the context of a long term reduction in the agricultural labour force in EU countries.
There is no doubt that the average age of farmers is increasing steadily. Unfortunately, the age of farm holder tabulations from the 2010 Agricultural Census have not yet been released by Eurostat, so the latest data we have are still from 2007. In 2007, 31% of holders of agricultural holdings in the EU-15 were 65 or older (28% in 1997 and 24% in 1990).… Read the rest

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The greying of Europe’s farmers

Problems in the generational transfer of farms have been a focus of EU agricultural structures policy since the 1990s and in individual member states for an even longer period. Europe’s farmers are getting older, and the shortage of ‘new blood’ entering the industry is frequently seen as a problem requiring a policy response to correct.

The ageing of the agricultural population results from a combination of two things: a reduced rate of entry by new young recruits, and a reduced rate of retirement or exit by older farmers. This is taking place in the context of a long term reduction in the agricultural labour force in EU countries.

There is no doubt that the average age of farmers is increasing steadily. Unfortunately, the age of farm holder tabulations from the 2010 Agricultural Census have not yet been released by Eurostat, so the latest data we have are still from 2007. In 2007, 31% of holders of agricultural holdings in the EU-15 were 65 or older (28% in 1997 and 24% in 1990).… Read the rest

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Why no “Green Revolution” in new Member States?

 

Competitiveness and innovation in the agriculture of new Member States before EU accession can be assessed as relatively poor. In a part of the area, the situation even resembled the situation in developing countries. In the parts where a certain level of development was achieved, i.e. closer to the Central Europe part of EU, extreme structural deficits were perceived. There was an obvious need for a development policy that would support restructuring and enable a new development cycle of agriculture.

Strong RD funding for modernisation of farms

Comprehensive European resources from the pre-accession and accession rural development funds were thus of great help. The issue of raising competitiveness became one of the key priorities of the rural development programmes in the region, which account for 35 do 65 % of total funds per country. Comprehensive support programmes were formed, with support to capital investment to agricultural holdings and to the food processing industry as the prevailing measures.… Read the rest

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Court of Auditors wants clearer objectives for post-2013 CAP reform

The European Court of Auditors is best known as the watchdog of the reliability and legality of the EU’s accounts. In its special reports it often undertakes an assessment of specific areas of Union activity, and it has published various reviews of specific aspects of agricultural expenditure over the years.

It can also submit opinions at the request of one of the other institutions of the Union, and it has just released an opinion on the Commission’s legislative proposals for the CAP post-2013 announced in October 2011.

The opinion focuses on whether and to what extent the Commission’s legislative proposals remedy weaknesses already identified by the Court following its audits. Subsequently it presents some further reflections resulting from the Court’s analysis of the proposals.

The opinion is comprehensive, addressing issues in all four of the main draft regulations in the Commission’s package. One of the guiding principles behind the Court’s observations is whether the proposals facilitate sound financial management by shifting from the current focus on compliance and financial implementation towards a performance-based system, with clear objectives and criteria against which performance can be measured.… Read the rest