presentation_cap_iceland

The Common Agricultural PolicyThe Common Agricultural Policy

Dušan Chrenek, Head of Unit for Enlargement Directorate General for Agriculture and Rural Development

European Commission

Reykjavik, 22-6-2011

Directorate General for Agriculture and Rural Development 2

Structure of the presentationStructure of the presentation

Introduction

Pillar I - agricultural markets and direct payments

Pillar II – rural development

Budget

Closing remarks


EU agricultureEU agricultureEU Iceland

Number of farmers 13.5 million 3.366Agriculture as % of GDP

1,6% 1,3%

Agriculture as % of employment

5% 2.6%

Production (000 head): Sheep Cattle (dairy) Pigs

91.15488.837 (24.000)

153.067

45972 (26,2)

4Agricultural tradeEU agricultural imports from ISEU agricultural exports to IS

Total Export : 90.6 billion36.7 mio euro 99.9 mio euro

Land (UAA; 000 ha) 178.813 129


Initial measures

4

Foundations of the CAPFoundations of the CAP

Community preference

Financial solidarity

Initial principlesMarket unity

Price support measuresIntervention buying

Import tariffsImport quotasExport refunds


Origins and principlesOrigins and principles

The CAP’s objectives

a) Increase agricultural productivity b) Ensure a fair standard of living for the

agricultural communityc) Stabilise marketsd) Assure the availability of suppliese) Ensure that supplies reach consumers at

reasonable prices

Pillar IPillar I

Agricultural markets and Agricultural markets and direct paymentsdirect payments


11stst Pillar: markets and income support Pillar: markets and income support

Market support (Council Regulation 1234/2007)– Price support via public storage, private storage, production limitations, import tariffs,

export refunds, producer organisations, wine envelope, disturbance clause, …– Reference prices (≠ intervention price and ≠ guaranteed price!)

– Private storage: (mandatory) butter and (optional) white sugar, olive oil, beef pig meat, sheep meat

– Production limitations: milk, sugar, wine (until 2015), potato starch (until 2012)

reference price (euro/tonne) intervention period (months) quantitative limit (tonnes)wheat 101,31 7 3.000.000other cereals 101,31 7 0rice 150,00 4 0beef/veal 2224,00 12 unlimitedbutter 2463,90 6 30.000SMP 1698,00 6 109.000pigmeat 1509,39


Development of market support since 1990Development of market support since 1990

Abandon structural nature of support towards use only in times of severe market difficulties by:– Reduction of guaranteed prices– Intervention limited in time and quantity, turning guaranteed

prices into reference prices.– Gradually moving away from micro management of

individual markets.– More market: more price volatility.


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

Reductions in EU price support, bringing EU prices in Reductions in EU price support, bringing EU prices in line with world prices line with world prices

Source: European Commission – DG AGRI


11stst Pillar: market and income support Pillar: market and income support

Income support (Council Regulation 73/2009)– Basic direct payment linked to eligible land– Support and stabilize farmers’ incomes making them less vulnerable to fluctuations in

prices– Farmers production decisions more market driven than subsidy driven – Contribute to ensuring the longer term economic viability of farms

Subject to meeting certain requirements (cross compliance) – Areas covered: public-, animal- and plant health, environment and animal welfare.– Contribute to rendering farming sustainable and providing basic public goods


0

100

200

300

400

500

600

700

Aus

tria

Bel

gium

Bul

garia

Cyp

rus

Cze

ch R

epub

lic

Den

mar

k

Est

onia

Finl

and

Fran

ce

Ger

man

y

Gre

ece

Hun

gary

Irela

nd Italy

Latv

ia

Lith

uani

a

Luxe

mbo

urg

Mal

ta

Net

herla

nds

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

EUR/ben.EUR/ha

0

8000

16000

24000

32000

40000

48000

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

Average payments per ha (UAA) and per beneficiaryAverage payments per ha (UAA) and per beneficiary



Share of Direct Payments and total subsidies in agricultural Share of Direct Payments and total subsidies in agricultural income income

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

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


EU-15 EU-12


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

( 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

200EU-12

Source: Eurostat

EU-15

EU-12

Pillar IIPillar II

Rural developmentRural development

Rural development policy 2007-2013 (€ 96.2 billion):

Objectives and Priorities

« LEADER Axis » local development / governance

Axis 1: Com-petitiveness :

Axis 2: Environmentand Land

Management :- Eco-systems (Natural Resources/ Biodiversity /Habitats)

- Landscape Amenities- Climate Change

Axis 3: Diversification and quality of life :

EAFRD: European Agricultural Fund for Rural Development

- Human and physical capital- Innovation- Knowledge-transfer- IT technologies

- Diversification of economic activities

- Quality of life

(€ 34.4 billion)* (€ 18.1 billion)(€ 43.7 billion)

* Figures in parantheses are indicative expenditures per axis 2007-13 as programmed by all 27 Member States including expenditures for technical assisstance and DP Romania and Bulgaria


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%A

ustri

a

Belg

ium

Bulg

aria

Cypr

us

Czec

h Re

publ

ic

Den

mar

k

Esto

nia

Finl

and

Fran

ce

Ger

man

y

Gre

ece

Hun

gary

Irel

and

Italy

Latv

ia

Lith

uani

a

Luxe

mbo

urg

Mal

ta

Net

herla

nds

Pola

nd

Port

ugal

Rom

ania

Slov

akia

Slov

enia

Spai

n

Swed

en

Uni

ted

Kin

gdom

EU-2

7

EU-1

5

EU-1

2

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


Share of each axis of total EAFRD expenditure EU-27*

Axis 1: 35.8% Axis 2: 45.4% Axis 3: 18.8%

* Including funds allocated for Technical Aid and DP ROM

BudgetBudget


EU Agricultural Budget 2011EU Agricultural Budget 2011

• Total budget € 58 billion

• Direct payments: € 40 billion• Market management: € 3.5 billion• Rural Development: €14.5 billion

• Council Regulation 1290/2005 on the financing of the common agricultural policy which regulates:

• Paying agency ;• Controls;•“financial discipline” to respect the ceiling for direct payments and market management (in 2013: € 44.9 billion).


CAP expenditure and CAP reform pathCAP expenditure and CAP reform path(2007 constant prices)(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

2009

% 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 AGRI. 2009 data are provisional

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


0%10%20%30%40%50%60%70%80%90%

100%

Den

emar

ken

Ned

erla

nd

Bel

gië

Fran

krijk

Grie

kenl

and

Dui

tsla

nd

Ver

enig

d K

onin

krijk

Spa

nje

Italië

Ierla

nd

Zwed

en

Luxe

mbu

rg

Finl

and

Cyp

rus

Hon

garij

e

Oos

tenr

ijk

Por

tuga

l

Tsje

chië

Pol

en

Lito

uwen

Slo

wak

ije

Slo

veni

ë

Est

land

Letla

nd

Bul

garij

e

Roe

men

ië

Mal

ta

% van de totale uitgaven

Eerste pijler Tweede pijler

Source: European Commission - DG Agriculture and Rural Development

Division CAP expenditure between two pillarsDivision CAP expenditure between two pillars (in 2009)(in 2009)


Total indicative Rural Development expenditures for EU-27 Total indicative Rural Development expenditures for EU-27 (2007-2013)(2007-2013)

• EAFRD: € 96.2 billion*41.4%

• National co-financing: € 57.3 billion**24.7%

• Private expenditures: € 66.2 billion**28.5%

• National measures: € 12.4 billion**5.3%

• TOTAL: € 232.1 billion100.0%

* This figure includes the additional amounts from Health Check and Recovery Package ** These figures are based on the revised programmes approved end of December 2009.


The CAP todayThe 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


The CAP in one clickThe CAP in one click

http://ec.europa.eu/agriculture/index_en.htm

http://ec.europa.eu/agriculture/capexplained/sustain/index_en.htm

http://ec.europa.eu/agriculture/index_en.htm

http://ec.europa.eu/agriculture/capexplained/sustain/index_en.htm


Thank you for your attention.Thank you for your attention.

presentation_cap_iceland

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