The CAP reform process in perspective: issues of the post-2013 debate Carina Folkeson Directorate...

The CAP reform process in perspective:The CAP reform process in perspective:issues of the post-2013 debateissues of the post-2013 debate

Carina Folkeson

Directorate for Economic Analysis, Perspectives and Evaluations

DG for Agriculture and Rural Development

European Commission

C. Folkeson CAP perspectives 2

The long-term CAP perspectiveThe long-term CAP perspective

The general context of the CAP debate– The question about “P” in the CAP

– The question about the "C" in the CAP

– The debate about the two pillar structure of the CAP

The post HC context of the CAP debate– Volatility in agricultural production and prices

– Impact of the economic crisis on agriculture

– Food security in the context of climate change and limited resources

The institutional context of the CAP debate – New European Parliament and Commission

– Lisbon Treaty

– WTO prospects


BudgetBudget

Economiccrisis

Economiccrisis

ClimatechangeClimatechange

The CAP debate at a glanceThe CAP debate at a glance


Different regional impacts from Different regional impacts from Climate Change Climate Change

Warming water availability drought risk yields suitable crop areas

floods hotter and drier summers summer drought forage sea levels

floods hotter and drier summers crop yields, range forage sea levels

summer rainfall storms, floods growing seasons, crop potential pests

winter rainfall (floods) summer rainfall drought, water stress Soil erosion yields, range of crops


BudgetBudget

Economiccrisis

Economiccrisis




( Index 2000 = 100 )

60

70

80

90

100

110

120

130

140

150

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

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

EU developments in agricultural incomeEU developments in agricultural income (agricultural income/AWU in real terms)(agricultural income/AWU in real terms)

Source: Eurostat

EU-15

EU-12


Evolution of agricultural income as a share ofEvolution of agricultural income as a share ofaverage income in the economyaverage income in the economy

Source: European Commission - DG Agriculture and Rural Development, based on Eurostat data on national and agricultural accounts.

*EU-15 average calculated with: EL, ES, FR, IT, NL, AT, PT; EU-10 average calculated with: CZ, EE, HU, PL, SK; EU-25 average = EU-15 + EU-10 countries.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008

EU-25 average* EU-15 average* EU-10 average*


BudgetBudget

Economiccrisis

Economiccrisis




CAP budget trends in perspectiveCAP budget trends in perspective

( % share of GDP )

30%

35%

40%

45%

50%

55%

60%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0,30%

0,35%

0,40%

0,45%

0,50%

0,55%

0,60%

% of public expenditure in EU GDP (left axis) % of CAP expenditure in EU GDP (right axis)

Source: European Commission – DG Agriculture and Rural Development


CAP expenditure and CAP reform pathCAP expenditure and CAP reform path

2007 constant prices

0

10

20

30

40

50

60

70

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

% GDPbillion €

0,00%

0,10%

0,20%

0,30%

0,40%

0,50%

0,60%

0,70%

Export subsidies Other market support Coupled direct paymentsDecoupled direct payments Rural development % of EU GDP

EU-10 EU-12 EU-15 EU-25 EU-27



RuralDevelopment

Direct payments

Markets

Pillar I

Pillar II

The CAP and the budgetThe CAP and the budget

Modulation


BudgetBudget

Economiccrisis

Economiccrisis




Directpayments

Markets

Ruraldevelopment

Income

Structural

adjustment

Public

go

ods

BudgetBudget

Economiccrisis

Economiccrisis




Directpayments

Markets

Ruraldevelopment

Income

Structural

adjustment

Public

go

ods

Riskmanagement

Marketinstruments

Food chainissues

BudgetBudget

Economiccrisis

Economiccrisis




Cumulative reductions in EU price supportCumulative reductions in EU price support

Cumulative % reduction in price support from 1991 to 2009

-100

-80

-60

-40

-20

0

Soft wheat Durumwheat

Beef Rice Butter SMP Sugar

In nominal terms In real terms

Source: European Commission - DG Agriculture and Rural Development


The evolving role of EU support prices - wheat The evolving role of EU support prices - wheat

0

50

100

150

200

250

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

( in € per metric tonne )

EU intervention price EU common wheat market price US (SRW Gulf)

Sources: European Commission - DG Agriculture and Rural Development and World Bank


Impact of CAP reforms on EU net production surplusImpact of CAP reforms on EU net production surplus

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Wheat Barley Maize Beef Pork Poultry SMP Butter Cheese Sugar

Production as % of consumption

Net production surplus: 1990/1994 avg Net production surplus: 2005/2009 avg

Sources: European Commission – Eurostat and DG Agriculture and Rural Development


Long-term price evolution along the food supply chainLong-term price evolution along the food supply chain

90

100

110

120

130

140

2000

Q01

2000

Q02

2000

Q03

2000

Q04

2001

Q01

2001

Q02

2001

Q03

2001

Q04

2002

Q01

2002

Q02

2002

Q03

2002

Q04

2003

Q01

2003

Q02

2003

Q03

2003

Q04

2004

Q01

2004

Q02

2004

Q03

2004

Q04

2005

Q01

2005

Q02

2005

Q03

2005

Q04

2006

Q01

2006

Q02

2006

Q03

2006

Q04

2007

Q01

2007

Q02

2007

Q03

2007

Q04

2008

Q01

2008

Q02

2008

Q03

2008

Q04

2009

Q01

Source: European Commission – DG Economic and Financial Affairs, based on Eurostat and Agriview data

Agriculturalcommodity prices

Food producer prices

Food consumer prices

Overall inflation(HICP)


Directpayments

Markets

Ruraldevelopment

Income

Structural

adjustment

Public

go

ods

Riskmanagement

Marketinstruments

Food chainissues

BudgetBudget

Economiccrisis

Economiccrisis




Directpayments

Basic rate

Markets

Ruraldevelopment

Income

Structural

adjustment

Public

go

ods

Riskmanagement

Marketinstruments

Food chainissues

Other criteria

GAEC

BudgetBudget

Economiccrisis

Economiccrisis




0

100

200

300

400

500

600

700

Mal

ta

Gre

ece

Net

herla

nds

Bel

gium

Cyp

rus

Den

mar

k

Ital

y

Ger

man

y

Hun

gary

Irel

and

Slo

veni

a

Fra

nce

EU

-15

Bul

garia

Luxe

mbo

urg

Cze

ch R

epub

lic

EU

-27

Fin

land

Sw

eden

Aus

tria

Uni

ted

Kin

gdom

Slo

vaki

a

Spa

in

Pol

and

EU

-12

Por

tuga

l

Lith

uani

a

Rom

ania

Est

onia

Latv

ia

EUR/ha

DP net ceilings fully phased-in (EUR/ha) EU flat rate

Average payments per haAverage payments per ha



Share of DP and total subsidies in agricultural income Share of DP and total subsidies in agricultural income


EU-15 EU-12

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009

Share of DP in agricultural income Share of total subsidies in agricultural income


Recent evolution of agricultural input and output pricesRecent evolution of agricultural input and output prices

75

90

105

120

135

150

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

( 2000 = 100 )

Input prices (nominal) - EU-27 Output prices (nominal) - EU-27Input prices (deflated) - EU-27 Output prices (deflated) - EU-27

Source: Eurostat


Directpayments

Basic rate

Markets

Ruraldevelopment

Income

Structural

adjustment

Public

go

ods

Riskmanagement

Marketinstruments

Food chainissues

Other criteria

GAEC

BudgetBudget

Economiccrisis

Economiccrisis




Directpayments

Basic rate

Markets

Ruraldevelopment

Innovation

Environment

Territory

Income

Structural

adjustment

Public

go

ods

Riskmanagement

Marketinstruments

Food chainissues

Other criteria

GAEC

BudgetBudget

Economiccrisis

Economiccrisis




The three 2007-2013 RD thematic axes in the MSThe three 2007-2013 RD thematic axes in the MS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aus

tria

Bel

gium

Bul

gari

a

Cyp

rus

Cze

ch R

epub

lic

Den

mar

k

Est

onia

Fin

land

Fra

nce

Ger

man

y

Gre

ece

Hun

gary

Irel

and

Ital

y

Lat

via

Lit

huan

ia

Lux

embo

urg

Mal

ta

Net

herl

ands

Pol

and

Por

tuga

l

Rom

ania

Slo

vaki

a

Slo

veni

a

Spa

in

Sw

eden

Uni

ted

Kin

gdom

EU

-27

EU

-15

EU

-12

Axis 1: Competitiveness Axis 2: Environment and land management Axis 3: Quality of life and diversification

Source: European Commission - DG Agriculture and Rural Development


Directpayments

Basic rate

Markets

Ruraldevelopment

Innovation

Environment

Territory

Income

Structural

adjustment

Public

go

ods

Riskmanagement

Marketinstruments

Food chainissues

Other criteria

GAEC

BudgetBudget

Economiccrisis

Economiccrisis




For further informationFor further information

The CAP after 2013 http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm

EU agriculture and CAP reformhttp://ec.europa.eu/agriculture/index_en.htm

Economic Analysis and Evaluation http://ec.europa.eu/agriculture/analysis/index_en.htm

Agricultural Policy Analysis and Perspectiveshttp://ec.europa.eu/agriculture/analysis/perspec/index_en.htm


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The CAP reform process in perspective: issues of the post-2013 debate Carina Folkeson Directorate...

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