Overview of current policy and implications of CAP

reform

Janet Dwyer Professor of Rural Policy

Co-Director CCRI, University of Gloucestershire

Outline• Strategic needs: Challenges for agriculture

and rural areas in the EU, 2020 and beyond

• Prospects for the English uplands and the commons

• The role of current policy – successes and messes…..

• The CAP reform process: likely outcomes at EU and England levels

• Reflections on possible tactics and priorities

Food

Biodiversity Habitats Economic

Viability

Climate Change

Resource-management

BioeenergyBiomass

Supply ChainIntegration

EC Challenges and Opportunities (courtesy Martin Scheele, DG Agri)

• Increasing fossil fuel prices – higher global

demand, lower / more costly / less secure supplies

• Growing global food demand (+70% by 2050)

• Climate change - pressures from temperature and

rainfall shifts

• Demographic change – shrinking workforce,

ageing population

• Continuing austerity in public finances –

reduced financing for land and people?

Strategic challenges: EU agriculture & rural areas

 

highest negative impact

medium negative impact low negative impact no/marginal impact low positive impact No data* reduced data*ESPON CLIMATE study 

EU regions: climate change vulnerability

EU: Implications for rural activities & resources

• Agriculture and the food sector must become

much more resource-efficient: using fewer non-

renewable inputs, conserving carbon, soil and water,

and reducing or eliminating waste

• ‘Multi-functionality’ of rural land must be maintained & increased, taking on energy generation and non-food products, AND sustaining food production and leisure (all these demands will not shrink, but grow)

• Ecosystem services (water, carbon) will require long-term planning and much better ground-level co-ordination between actors and policies

• Rural communities will face reduced central support, but enhanced information:

- Eroding transport options- Increased scope for distance

learning and exchange of ideas- Continuing challenges from

ageing: capacity to cope- Some ‘renewal’ via in-migration

(potential social, environmental and economic gains)

Prospects for farming and the commons

• Higher prices for finished products, but also for inputs – low energy / lower-input systems favoured

• Strong public support for land management, access, but poor understanding of issues

• Juggling to survive?: most farm household incomes are diverse – this need won’t go away

Prospects for farming and the commons• Pressures and opportunities from other

land uses – energy, carbon?• Continued growth in local food

networks but barriers to access / lack of capacity to respond?

The role of policy

CAP Single Payment Scheme – has underpinned farm incomes for many decades, in SW uplands and for most sheep and beef farms across the region

For many, SPS aid has reduced since 2000 in real terms due to growing modulation and exchange rate effects (though some upswing in recent years)

Agri-environment – most farms now in schemes, but lots of issues about proper design and delivery tailored to local conditions

Disease control policy uses ‘all or nothing’ tactics, insensitive to wider impacts, ineffective at control….

Policy: successes & messes• A legacy of environmental management: long-

term commitment to commons, better legislation• Strong regional actors and networks borne of the

many ‘partnerships’ in recent years

BUT• Too many disconnected schemes and initiatives

acting in opposite ways – SPS and BTB versus ES/UES, RDPE versus laissez-faire approach to market concentration, housing, transport –

The mix is a mess: is this promoting resilience at a local level?

CAP reform – where are we?

• Main thrust of these reforms was about redistribution across the EU = more funding, more access to Pillar 1 support for new Member States

• Greening seen as a necessary ingredient for interest groups in the EU-15

• There is agreement on both these principles, but no one wants to lose out

• Difficult wider financial climate, but most countries not (yet?) willing to make big changes

CAP reform – where are we?

• Cyprus presidency (2nd half of 2012) focused upon securing agreement on the EU budget for 2020 – agreement by end November 2012

• European Parliament tabled a large number of proposed amendments – these will take some time to be considered, even if all are rejected

• So, new CAP legislation will not be agreed before the new budget: most likely in March 2013, under Irish Presidency – only then will UK funding be fixed

Current state of play

• Budget – countries split between those wanting increased funding for CAP and those wanting significant cuts, but

• 9 October joint statement by French and German Agriculture Ministers confirms a wish to hold to the Commission’s proposal – a freeze in nominal terms (c.7% cut in real terms) – this appears now the most likely outcome

Current state of play Allocations and shape of Pillar 1 (SPS),

among the Member States

• likely to be based upon historic aid amounts, with redistribution towards more ‘equal’ rates per hectare: implies a modest cut for UK farmers

• BUT this doesn’t include modulation – England currently takes 20% from pillar 1 to fund pillar 2

• Defra is committed to continuing modulation: at present, max. proposed rate is 10% but this could be increased / made more flexible

Current state of play

Allocations and shape of Pillar 2 aids (RDP), among the Member States • likely to be based upon historic aid / spending,

some adjustment (upwards, for UK) to include more ‘objective’ criteria - i.e. not much change to the basic allocation

BUT

RDPE is almost 50% funded by modulation: Reduced modulation to 10% could prevent any more new agreements in ES

Pillar 1• 30% SPS conditional on ‘greening’ is accepted

as a principle, but big arguments now about what it should mean

• UK doesn’t like the EC options, not least because it can’t actually monitor and control them (more disallowance)

• RPA functions may be outsourced – opportunity or threat? Better maps would help…

• Possibility of ELS elements / some other basic model being accepted as ‘greening equivalence’ (reduces need for modulation)?

Pillar 2 • Likely to be agreed more or less unchanged

from the draft regulations

• Fewer measures, each more flexible than the current measures

• Higher rates of co-financing for certain types: young farmers, collaborative groups, ‘innovation partnerships’

• At least 25% of spending must go to climate change action and/or agri-environment

• Assumption of multiple measures to reach strategic goals: scope for more integrated approaches, going forwards?

New Pillar 2 measures

‘Co-operation’ article 36: funding to help set up groups (which can get higher co-funding)• Partnerships among different actors in the

agriculture and food chain or forestry sector and/or with other actors, to contribute to the aims of rural development policy

• Creation of clusters and networks• For pilot projects, new products and processes,

sharing facilities, short supply chains, local markets, also landscape or water management groups

• Can fund meetings, equipment, visits, market research, facilitation support, for up to 7 years

New Pillar 2 Measures

European Innovation Partnership

An initiative to attempt to stimulate a ‘step-change’ in EU farming practice towards greater sustainability and competitiveness• Funding for bringing together farmers, advisors

and scientists to work in communities of practice, to address key challenges (climate, biodiversity, water, renewable energies, ecosystem services)

Farmers

NGOs Advisors

ResearchersAgri-

businessEIP

OperationalGroup

Networking support from the centre, higher co-financing, a ‘prize’ for exceptional progress

Timetable for the RDP

• If agreement in March, Defra must draft the RDP by August 2013

• The EU will publish implementing regulations in summer 2013: can’t submit RDP before these

• RDP approval time at the Commission could be up to 8 months: RDP launched spring 2014 at the earliest: more likely summer ?

There will be a gap between spending on the current programme and the new one

Reflections: SW Uplands have been building capacity, partnerships

Reflections on tactics: sorting the mess• We need smarter policies which acknowledge multiple

goals, and use integrated planning & delivery - join up environment , people and economy

• We need to control and reduce the weight of controls and bureaucracy – make policies closer to the beneficiary, more flexible, learn from on-the-ground experience

• We need to incentivise experimentation - learning, doing things differently, building confidence to act

- consider the plumber… local tailoring doesn’t have to mean higher costs

Pointers for a new recipe?

• Defra and national agencies are experimenting with pilots at ‘landscape scale’ – these are welcome, but constrained

• Local and regional networks seem stranded, or disempowered by constant cycles of institutional reorganisation – the best knowledge is probably NOT in Defra (or agencies?), now

• Pillar 2 offers scope for new groups to pick up the EU agenda, build on local partnerships and promote new approaches

• The centre needs to ‘loosen the reins’ of control

The role of policy: enabling

“a supportive and responsive government is required at a UK, devolved and local level. Action on all these levels is needed to: address regional level inequalities; build capacity in local communities; and mitigate against any unintended consequences of macro level policies at a local level.”

Carnegie Trust, 2012

- This was written about rural communities; but the same might equally be said about future

farm policies

Thank you