the cap after the health check agricultural policy analysis and perspectives dg for agriculture and...

The CAP after the Health CheckThe CAP after the Health Check

Agricultural Policy Analysis and Perspectives

DG for Agriculture and Rural Development

European Commission

AGRI-L1 CAP perspectives 2

1. The CAP today

2. The CAP until 2013

3. The CAP beyond 2013


1. The CAP today1. The CAP today

A substantially reformed policy …– Farm support is mainly decoupled and subject to cross-compliance

– Role of market intervention mechanisms is significantly reduced

– Rural Development policy is strengthened with funds and policy instruments

… … and better performingand better performing– Surpluses belong to the pastSurpluses belong to the past

– Competitiveness is improvedCompetitiveness is improved

– Better value for moneyBetter value for money


CAP expenditure and CAP reform pathCAP expenditure and CAP reform path

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 €

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

Export subsidies Market support Direct aidsDecoupled payments Rural development % of EU GDP

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


0%

10%

20%

30%

40%

50%

% of GDP

CAP expenditure All EU public expenditure

… … and alternative views on its costand alternative views on its cost

0

20

40

60

80

100

120

Billion of euros

CAP expenditure EU budget

CAP cost in 2008 (in relative terms)

CAP cost in 2008 (in absolute terms)

0.43% ofEU GDP

45.9% of EU budget


1. The CAP today1. The CAP today

A substantially reformed policy …A substantially reformed policy …– Farm support is mainly decoupled and subject to cross-complianceFarm support is mainly decoupled and subject to cross-compliance

– Role of market intervention mechanisms is significantly reducedRole of market intervention mechanisms is significantly reduced

– Rural Development policy is strengthened with funds and policy instruments Rural Development policy is strengthened with funds and policy instruments

… and better performing– Surpluses belong to the past

– Competitiveness is improved

– Better value for money


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

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Wheat Barley Maize Beef Pork Poultry SMP Butter Cheese Sugar

Net production surplus as % of consumption / Net exports as % of World exports

Net production surplus: 1990/94 ol avg Net production surplus: 2004/08 ol avgNet exports: 1990/94 ol avg Net exports: 2004/08 ol avg


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

( in € per metric tonne )

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


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

0

500

1000

1500

2000

2500

3000

3500

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


EU intervention price EU safety net EU market price Argentina


The evolving role of EU support prices - butterThe evolving role of EU support prices - butter

0

500

1000

1500

2000

2500

3000

3500

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


EU intervention price EU market price Oceania


The evolving role of EU support prices - SMPThe evolving role of EU support prices - SMP

0

500

1000

1500

2000

2500

3000

3500

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


EU intervention price EU market price Oceania


2. 2. The CAP until 2013The CAP until 2013

“Health Check” – fine tuned the reform process

Direct aids

– Further decoupling

– MS allowed to move to flatter rates of support

– New article “68” • Targeted measures to economic/environmental disadvantages in certain regions/sectors• Risk management measures

Market mechanisms

– Increase milk quotas by 1% annually

– Intervention streamlined and simplified

Rural development

– “New challenges” (Climate change, bioenergy, water management, biodiversity, innovation, dairy)

– Modulation increase


3. The CAP beyond 20133. The CAP beyond 2013

General context– Volatility in production and prices

– Economic crisis

– Food security, climate change, limited resources

Institutional context Institutional context – New European Parliament and CommissionNew European Parliament and Commission

– Lisbon TreatyLisbon Treaty

– WTOWTO

– New financial perspectivesNew financial perspectives• New priorities for EU budgetNew priorities for EU budget• Budget for CAP?Budget for CAP?


Recent trend of EU agricultural market pricesRecent trend of EU agricultural market prices

EUR/t for cereals; EUR/100 kg for beef and dairy

0

50

100

150

200

250

300

350

400

450

500

Jan-

00

May

-00

Sep-

00

Jan-

01

May

-01

Sep-

01

Jan-

02

May

-02

Sep-

02

Jan-

03

May

-03

Sep-

03

Jan-

04

May

-04

Sep-

04

Jan-

05

May

-05

Sep-

05

Jan-

06

May

-06

Sep-

06

Jan-

07

May

-07

Sep-

07

Jan-

08

May

-08

Sep-

08

Jan-

09

May

-09

Source: DG AGRI (Agriview)

Commom wheat Maize Beef SMP Butter Cheese


3. The CAP beyond 20133. The CAP beyond 2013

General contextGeneral context– Volatility in production and pricesVolatility in production and prices

– Economic crisisEconomic crisis

– Food security, climate change, limited resourcesFood security, climate change, limited resources

Institutional context – New European Parliament and Commission

– Lisbon Treaty

– WTO

– New financial perspectives• New priorities for EU budget• Budget for CAP?


3. The CAP beyond 2013: the debate3. The CAP beyond 2013: the debate

Do we need the “C” and the “P” of the CAP? Current structure (I and II pillar)? If yes

1. Direct payments– Income support vs. public goods

– Redistribution within and among Member States

2.2. Market mechanismsMarket mechanisms– Safety net Safety net

– Other instrumentsOther instruments

3.3. Rural development Rural development – Balance between competition, environmental and rural economy challengesBalance between competition, environmental and rural economy challenges

– The 3rd axis of RD an integral part of the CAP reform?The 3rd axis of RD an integral part of the CAP reform?

4.4. FinancingFinancing – Distribution between pillars and areasDistribution between pillars and areas

– Co-financingCo-financing


Average payments

0

100

200

300

400

500

600

Gre

ece

Mal

ta

Net

herla

nds

Bel

gium

Den

mar

k

Cyp

rus

Ger

man

y

Ital

y

Irel

and

Hun

gary

Fra

nce

Slo

veni

a

EU

15

Luxe

mbu

rg

EU

27

Cze

ch R

epub

lic

Fin

land

Sw

eden

Uni

ted

Kin

gdom

Aus

tria

Spa

in

Slo

vaki

a

Pol

and

EU

12

Por

tuga

l

Bul

garia

Lith

uani

a

Rom

ania

Est

onia

Latv

ia

EUR/ben.EUR/ha

0

8000

16000

24000

32000

40000

48000

Status quo in 2016 (EUR/ha) EU flat rate (EUR/ha) Status quo in 2016 (EUR/beneficiary)


3. The CAP beyond 2013: the debate3. The CAP beyond 2013: the debate

Do we need the “C” and the “P” of the CAP?Do we need the “C” and the “P” of the CAP? Current structure (I and II pillar)? If yesCurrent structure (I and II pillar)? If yes

1.1. Direct paymentsDirect payments– Income support vs. public goodsIncome support vs. public goods

– Redistribution within and among Member StatesRedistribution within and among Member States

2. Market mechanisms– Safety net

– Other instruments

3. Rural development – Balance between competition, environmental and rural economy challenges

– The 3rd axis of RD an integral part of the CAP reform?

4. Financing – Distribution between pillars and areas

– Co-financing


In a nutshell, CAP policy In a nutshell, CAP policy questions...questions...

Direct payments

Adjusted SPS

GAEC

Markets

Price support/Quotas reform

Safety net

Rural development

Axis 1(structural

adjustment)

Axis 2(environment)

Axis 3(territory and

diversification)

Phase-out ?Revenue insurance ?

Phase-out ?

Income

Structural

adjustment

Public

goods

Future ?


RuralDevelopment

Direct payments

Markets

Pillar I

Pillar II

Post-2013 BUDGET ??

… …and CAP budget and CAP budget questionsquestions

Modulation


For further informationFor further information

CAP Health Check http://ec.europa.eu/agriculture/healthcheck/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


Thank youThank you

the cap after the health check agricultural policy analysis and perspectives dg for agriculture and...

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