Tag: Pillar 1

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President Michel’s solution to the MFF conundrum

In my previous post I discussed the challenges facing European Council President Charles Michel as he took over responsibility from the Finnish Presidency to prepare the draft conclusions on the Multi-annual Financial Framework for the coming meeting of the European Council on 20 February next.

The Finnish Presidency proposal had been attacked on all sides as unsatisfactory. Yet, in that previous post, I speculated that Mr Michel was unlikely to hear anything very different to what the Finnish Presidency had heard when charged with forwarding the ‘negotiating box with figures’ to the December 2019 meeting of the European Council. Thus, I did not expect Michel’s draft conclusions to be dramatically different to the figures in the Finnish Presidency’s December proposal.

On the other hand, I noted that the new Commission’s flagship proposal for the European Green Deal had been published after the Finnish Presidency had prepared its final draft of the negotiating box, and I wondered if this might be sufficient to reframe the conversation between the ‘frugal Five’ and net recipients on the overall size of the EU budget.… Read the rest

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Charles Michel’s MFF juggling act

During the past few weeks, the President of the European Council Charles Michel has been meeting national sherpas to sound out Member State positions regarding the Commission’s proposal for the next Multiannual Financial Framework (MFF) for the period 2021-2027. In the next few weeks he will be meeting national leaders face-to-face.

He has called a special European Council meeting which, ominously for national leaders who value their beauty sleep, is scheduled to start on 20 February but which notably has no termination date or time.  Mr Michel may plan to take a leaf out of the Saudi Crown Prince Mohammed bin Salman’s playbook who famously kept the rich elite of Saudi Arabia under lock and key in a luxury hotel until they agreed to part with some of their money.

… Read the rest
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Co-financing CAP Pillar 1 payments

After a couple of Brexit posts, it is time to return to the debate on the future of the CAP and its financing. Early last month, I wrote a post making the case for co-financing CAP Pillar 1 payments in the forthcoming MFF proposal from the Commission. I have since fine-tuned the arguments and the result has appeared as a policy brief published by the Swedish Institute for European Policy Studies.

From the summary:

The idea of national co-financing of the EU’s income support to farmers was introduced into the debate on the next Multi-Annual Financial Framework (MFF) in June 2017 in the Commission Reflection Paper on the Future of EU Finances. The European Commission mentioned the idea only in passing and it was immediately rejected by Agriculture Ministers, a stance that can be understood on political economy grounds.

This paper makes four arguments in favour of this policy instrument – for example that it would make better value-for-money choices in the CAP more likely – while also responding to some of the criticisms of the proposal.

… Read the rest
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The use of CAP impact indicators for policy evaluation

This post is written by Ulrich Koester and Jens-Peter Loy

According to new legislation, the European Commission (EC) is in charge of evaluating Pillar 1 measures of the Common Agricultural Policy (CAP), while Pillar 2 measures have to be evaluated by the Member States (MS). Pillar 1 measures are of utmost importance for EU expenditure, amounting to a share of about 40% of the total expenditure of the EU budget. The request for evaluation is a significant step forward. One may wonder whether this new task indicates that the measures of the CAP have not been evaluated regularly so far. In the following, we focus on one specific measure, direct payments, for two reasons.

First, these payments make up more than 70% of the total CAP expenditure and, second, the EC has already published respective evaluation results.

The structure of the post is as follows: In the first part, we present the evaluation methodology widely used by professional economists.… Read the rest

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The distribution of CAP payments by member state

The Scottish Government is currently waging a campaign for a higher share of the UK national envelopes for Pillar 1 and Pillar 2 of the CAP. It claims that Scotland is almost certain to find itself at the bottom of the EU per hectare league table in terms of both Pillar 1 and Pillar 2 support by the end of the next CAP period because, as a region, it could not directly benefit from the ‘external convergence’ formula used to increase payments in those countries with currently low payments per hectare.
As part of its campaign, the Scottish Government has prepared two tables showing the levels of payment per hectare for both Pillar 1 and Pillar 2 in each member state currently and on average over the 2014-2020 MFF period to bolster its case. As the tables will be of more general interest, I reproduce them below.
Pillar 1 direct payments
The comparison of Pillar 1 payments per hectare is shown in Table 1.… Read the rest

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The CAP budget in the MFF Part 2 – direct payment envelopes in Pillar 1

In my previous post I discussed some of the difficulties in comparing the money set aside for the CAP in the 2014-2020 Multiannual Financial Framework (MFF) and in the current 2007-2013 MFF. Among the issues highlighted were the counterfactual baseline to be used, whether to compare period-to-period or end-year to end-year figures, and the importance of adjusting the current MFF figures to ensure like-with-like comparisons with the next MFF period.

The European Parliament secretariat’s Note European Council Conclusions on the Multiannual Financial Framework 2014-2020 and the CAP also contains a detailed breakdown of Pillar 1 direct payment envelopes by member state for the two MFF periods, allowing us to see which countries are winners and losers under the decisions taken by the European Council.

The EP’s note calculates the national envelopes for each member state in the 2007-2013 period on the assumption that each country received the full 100% of its envelope, thus ignoring the impact of the phasing-in of these payments in the new member states.… Read the rest

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Wasting money on young farmers?

This post first appeared in the IIEA EnvironmentNexus blog.

One of the issues on the CAP reform agenda discussed at the last Agricultural Council meeting was whether the proposed young farmers’ payment in Pillar 1 should be a voluntary option for member states or not. The Council is arguing for a voluntary payment. Both the Commission and Parliament argue, on the contrary, that the payment should be mandatory.

Making this a mandatory payment could imply a three- to four-fold increase in CAP expenditure on young farmers. One might assume that such a substantial increase in expenditure would be justified by well-founded evidence of substantial gains in either generational renewal or farm productivity.

In fact, in proposing a general top-up of direct payments for young farmers in Pillar 1 the Commission ignores the advice of its own evaluations of assistance to young farmers. Despite the high profile campaign by CEJA, the European Council of Young Farmers, this payment is the wrong instrument addressing the wrong problem.… Read the rest

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The political feasibility of CAP redistribution

A novel feature of the current round of CAP reform negotiations is that it explicitly aims to redistribute budget resources between member states. One of the reasons for the success of the 2003 Fischler Mid-Term Review and the 2008 Fischer Boel Health Check was that they left the pre-existing distribution of payments across member states more or less intact.

The demand from the new member states for greater convergence in the value of the direct payment per entitlement (or eligible hectare) in the current CAP negotiations means that redistribution is now firmly on the reform agenda. But it also makes reaching agreement much more difficult.

This is illustrated in a paper by Kyosti Arovuori from the Finnish Pellervo Economic Research PTT institute and and Jyrki Niemi from MTT Agrifood Research Finland at the Annual IFAMA World Symposium in Frankfurt last June. They examine a set of potential redistribution criteria identified in the Commission’s November 2010 Communication for their ‘political feasibility’, and conclude that none would pass the voting procedures of the European Council.… Read the rest