Ⓒ Olof S. Communication on the future of the CAP “The CAP towards 2020: meeting the food,...
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Transcript of Ⓒ Olof S. Communication on the future of the CAP “The CAP towards 2020: meeting the food,...
Ⓒ
Olo
f S
.
Communication on the future of the CAP
“The CAP towards 2020: meeting the food, natural resources and territorial challenges of
the future”
DG for Agriculture and Rural Development European Commission
2
Outline
1. The context
2. The CAP today
3. Why do we need a reform?
4. New objectives, future instruments and policy options
5. Next steps
3
1. The context
Background of reform
• Entry into force of Lisbon Treaty• Budgetary framework ends in 2013• Need to align CAP post-2013 to Europe 2020 strategy
Public debate
The Communication
• Strong public interest in Commission call to public: 5 600 contributions• Very successful Conference in July: 600 participants• Council, EP, EESC, CoR discussions and/or opinions
• Reflects broadly identified policy challenges• Responds to the public debate and outlines broad future options• Launches inter-institutional debate and prepares legal proposals
4
2. The CAP today
A substantially reformed policy…
• Structured in two complementary pillars
• Farm support mainly decoupled and subject to cross-compliance
• Role of market intervention mechanisms significantly reduced to safety net level
• Rural development policy strengthened with funds and new policy instruments
… better performing…
• Surpluses belong to the past
• Competitiveness improved
• Improved transfer efficiency
• More sustainable farming
• Integrated approach for rural areas
• Contribution to EU budget stability
… and resulting in a territorial and environmentallybalanced EU agriculture
5
The CAP today – budget relevance
RuralDevelopment
Direct payments
Markets
Pillar I
Pillar II
Modulation
6
CAP expenditure and CAP reform path(2007 constant prices)
0
10
20
30
40
50
60
70
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
% GDPbillion €
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
Export subsidies Other market support Coupled direct paymentsDecoupled direct payments Rural development % of EU GDP
Source: European Commission - DG Agriculture and Rural Development
EU-10 EU-12 EU-15 EU-25 EU-27
7
3. Why do we need a reform?To respond to challenges ahead
Economicchallenges
• Food security
• Price variability
• Economic crisis
8
Recent trends in some commodity market prices
Sources: European Commission - DG Agriculture and Rural Development and World Bank
EUR/t for maize; EUR/bbl for crude oil
200
250
300
350
400
Jan-
00M
ay-0
0S
ep-0
0Ja
n-01
May
-01
Sep
-01
Jan-
02M
ay-0
2
Sep
-02
Jan-
03M
ay-0
3S
ep-0
3Ja
n-04
May
-04
Sep
-04
Jan-
05
May
-05
Sep
-05
Jan-
06M
ay-0
6S
ep-0
6Ja
n-07
May
-07
Sep
-07
Jan-
08
May
-08
Sep
-08
Jan-
09M
ay-0
9S
ep-0
9Ja
n-10
May
-10
Sep
-10
EUR/t for fresh milk
0
50
100
150
200
Fresh milk, EU Crude oil, avg spot price Maize, US, Gulf
9
EU developments in agricultural income (agricultural income/AWU in real terms)
( Index 2000 = 100 )
60
70
80
90
100
110
120
130
140
150
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
EU-15
20
40
60
80
100
120
140
160
180
200
EU-12
Source: Eurostat
EU-15
EU-12
10
Relative situation of agricultural income in the EU
Income gap with the rest of the economy
(average 2005-2007)
Agricultural income level between Member States
(2009)
Source: European Commission - DG Agriculture and Rural Development, based on Eurostat data
(agricultural income as % of average income in the total economy)
0%
20%
40%
60%
80%
100%
EU-15 EU-27 EU-12
(agricultural income/AWU in real terms - EU-27 = 100)
0
25
50
75
100
125
150
175
200
EU-15 EU-27 EU-12
11
Recent evolution of agricultural input and output prices
Source: Eurostat
(index 1996 = 100, in real prices)
70
80
90
100
110
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Output prices - EU-27 Input prices - EU-27
12
3. Why do we need a reform?To respond to challenges ahead
Economicchallenges
Environmentalchallenges
Territorialchallenges
• Food security
• Price variability
• Economic crisis
• GHG emissions
• Soil depletion
• Water/air quality
• Habitats and biodiversity
• Vitality of rural areas
• Diversity of EU agriculture
Equity and balance of support
Contribution to Europe 2020 strategy
13
4a. What are the objectives with the reform?
Viable foodproduction
Sustainable management of
natural resources and climate action
Balanced territorialdevelopment
Common EU response needed
Economicchallenges
Environmentalchallenges
Territorialchallenges
14
4b. What policy instruments?
Better targeted to objectives Based on two pillar structure
Direct payments
• Redistribution
• Better targeting
• Redesign:• Greening of direct
payments• Capping of
payments• Small farmers
support• Areas with
specific natural constraints
15
Average direct payments per potentially eligible area and beneficiary
Direct payments net ceilings fully phased-in (in 2016)
Source: European Commission - DG Agriculture and Rural Development
0
100
200
300
400
500
600
700
800
Mal
ta
Bel
gium
Net
herla
nds
Italy
Gre
ece
Cyp
rus
Den
mar
k
Slo
veni
a
Ger
man
y
Fra
nce
EU
-15
Luxe
mbo
urg
EU
-27
Irel
and
Aus
tria
Hun
gary
Cze
ch R
epub
lic
Spa
in
Fin
land
Sw
eden
Uni
ted
Kin
gdom
Bul
garia
Pol
and
EU
-12
Slo
vaki
a
Rom
ania
Por
tuga
l
Lith
uani
a
Est
onia
Latv
ia
EUR/ben.EUR/ha
0
8000
16000
24000
32000
40000
48000
DP net ceilings fully phased-in (EUR/ha)EU-27 average (EUR/ha)DP net ceilings fully phased-in (EUR/beneficiary)
16
4b. What policy instruments?
Better targeted to objectives Based on two pillar structure
Direct payments Market measures
• Market orientation
• Streamline and simplification
• Improved food chain functioning
• Redistribution
• Better targeting
• Redesign:• Greening of direct
payments• Capping of
payments• Small farmers
support• Areas with
specific natural constraints
17
Slow, limited, asymmetric price transmission along the food supply chain
95
100
105
110
115
120
Jan
-07
Fe
b-0
7
Ma
r-0
7
Ap
r-0
7
Ma
y-0
7
Jun
-07
Jul-
07
Au
g-0
7
Se
p-0
7
Oct
-07
No
v-0
7
De
c-0
7
Jan
-08
Fe
b-0
8
Ma
r-0
8
Ap
r-0
8
Ma
y-0
8
Jun
-08
Jul-
08
Au
g-0
8
Se
p-0
8
Oct
-08
No
v-0
8
De
c-0
8
Jan
-09
Fe
b-0
9
Ma
r-0
9
Ap
r-0
9
Ma
y-0
9
Jun
-09
Jul-
09
Source: European Commission – DG Economic and Financial Affairs, based on Eurostat data
FOOD PRICE CRISIS PRODUCERS’ LAG RETAILERS’ LAG STABILISATION
Agriculturalcommodity prices
Overall inflation(HICP)
Food producer prices
Food consumer prices
18
4b. What policy instruments?
Better targeted to objectives Based on two pillar structure
Direct payments Market measures Rural development
• Market orientation
• Streamline and simplification
• Improved food chain functioning
• Environment, climate change and innovation as guideline themes
• Improved coherence with other EU policies
• More effective delivery mechanisms
• Address risk management
• New distribution criteria
• Redistribution
• Better targeting
• Redesign:• Greening of direct
payments• Capping of
payments• Small farmers
support• Areas with
specific natural constraints
19
4c. What policy options?
Option 1
• Continue the gradual reform process• Adjust the most pressing shortcomings (e.g.
more equity in the distribution of direct payments)
Option 2
• Capture the opportunity for reform• More sustainable and balanced CAP (between
policy objectives, MS and farmers)• More ‘green’ targeted measures
Option 3
• More fundamental reform• Focus on environmental and climate change
objectives through rural development• Move away from income support and most
market measures
20
5. Next steps
Inter-institutional debate on the Communication
Preparation of Impact Assessment (IA)
Preparation of Legal Proposals
• In-depth Commission analysis of new policy settings, options and their economic, social and environmental impacts
• Stakeholders consultation: analytical contributions from stakeholders based on Consultation document published on the 23th of November
Legal proposals presented by mid-2011
21
For further information
• The CAP after 2013
http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm
• The Communication on the future of the CAP
http://ec.europa.eu/agriculture/cap-post-2013/communication/ index_en.htm
• Public consultation
http://ec.europa.eu/agriculture/cap-post-2013/consultation/ index_en.htm
22
Thank you