Transcript Slide 1

Future directions of EU agricultural policies
The CAP towards 2020
Tassos Haniotis, Director
Economic Analysis, Perspectives and Evaluations
DG for Agriculture and Rural Development
European Commission
Ⓒ Olof S.
ABARES Outlook 2011, 2 March 2011
Outline
1. The objectives of CAP reform
2. The context of CAP reform
3. The CAP at a glance
4. Policy challenges and options
5. Next steps
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Haniotis - ABARES Outlook 2011
CAP reform objectives at a glance
Future challenges
Economic
challenges
Environmental
challenges
Territorial
challenges
• Food security
• GHG emissions
• Vitality of rural areas
• Price volatility
• Soil depletion
• EU rural diversity
• Economic crisis
• Water/air quality
• Regional growth
• Habitats/biodiversity
CAP2020 reform objectives
Viable food production
Sustainable management
of natural resources
Balanced territorial
development
Equity and balance of support
Contribution to Europe 2020 strategy
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Haniotis - ABARES Outlook 2011
The wider context of CAP reform
The future of the CAP is debated within the context of:
•
A cost-driven commodity price boom
–
•
A new set of EU institutional realities
–
•
the “baseline” to assess the impact of potential policy changes is full of major
uncertainties, mostly of uncertainties outside agriculture
co-decision after the Lisbon Treaty increases the role not just of the EP in the
decision process, but also of the wider public in the consultation process
A parallel process of multiple EU policy decisions
–
CAP reform is linked to the debate about the future EU budget and the wider EU 2020
strategy of “smart, sustainable and inclusive growth”
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Haniotis - ABARES Outlook 2011
Real commodity prices
(World Bank real price indices, 2000 = 100)
500
400
300
200
100
Agriculture
Food
Energy
Fertilizers
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
0
Metals/minerals
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Haniotis - ABARES Outlook 2011
Energy and agricultural prices
(nWorld Bank nominal price indices, 2000=100)
400
350
Agriculture + 50 %
Energy + 223 %
300
250
200
150
100
50
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0
Source: World Bank.
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Haniotis - ABARES Outlook 2011
Price developments in the EU food chain
FOOD PRICE
CRISIS
PRODUCER
LAG
RETAIL LAG
DEJA VU?
120
Agricultural
commodity prices
Food consumer prices
115
Food producer prices
110
105
100
Overall inflation
(HICP)
Nov-10
Sep-10
Jul-10
May-10
Mar-10
Jan-10
Nov-09
Sep-09
Jul-09
May-09
Mar-09
Jan-09
Nov-08
Sep-08
Jul-08
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
95
Source: European Commission – DG Economic and Financial Affairs, based on Eurostat data
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Haniotis - ABARES Outlook 2011
EU agricultural prices
(real price index, 1996 = 100)
110
100
90
80
70
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Output prices - EU-27
Input prices - EU-27
Source: Eurostat
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Haniotis - ABARES Outlook 2011
The policy outcome of CAP reform…
CAP expenditure and CAP reform path (2007 constant prices)
70
billion €
EU-10
% GDP
EU-12
EU-15
EU-25
EU-27
0,7%
0,6%
50
0,5%
40
0,4%
30
0,3%
20
0,2%
10
0,1%
0
0,0%
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
60
Export subsidies
Decoupled direct payments
Other market support
Rural development
Coupled direct payments
% of EU GDP
Source: European Commission - DG Agriculture and Rural Development
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Haniotis - ABARES Outlook 2011
…and its market impact
EU production surplus as % of consumption
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
Wheat
Barley
Maize
Beef
Pork
Poultry
Production surplus: 1990/1994 avg
SMP
Butter
Cheese
Sugar
Production surplus: 2005/2009 avg
Sources: European Commission – Eurostat and DG Agriculture and Rural Development
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Haniotis - ABARES Outlook 2011
The evolving role of EU support prices - wheat
250
EUR/ton
200
150
100
50
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*
EU intervention price
EU market price
US (SRW Gulf)
Sources: European Commission - DG Agriculture and Rural Development and World Bank
Note: years are market years July-June. 2010* = average July 2010-January 2011.
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Haniotis - ABARES Outlook 2011
The evolving role of EU support prices - SMP
3500
EUR/ton
3000
2500
2000
1500
1000
500
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20092010*
EU intervention price
EU market price
Oceania
Sources: European Commission - DG Agriculture and Rural Development and World Bank
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Haniotis - ABARES Outlook 2011
The CAP today – budget relevance
Markets
Direct payments
Rural
Development
Modulation
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Haniotis - ABARES Outlook 2011
The CAP today – policy relevance
Direct
payments
Economic
crisis
Income
Markets
Market
instruments
Price
volatility
Basic rate
Other criteria
Food chain
issues
GAEC
Rural
development
Budget
Innovation
Environment
Climate
change
Territories
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Haniotis - ABARES Outlook 2011
Drivers of the broad CAP reform 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
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Haniotis - ABARES Outlook 2011
Main priority the “greening” of the CAP
A greener CAP
within
Resource Efficient Europe
(Europe 2020)
Greener
Direct Payments
Stronger
Rural Development
Enhanced
cross compliance
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Haniotis - ABARES Outlook 2011
The debate about policy instruments
Better targeted to objectives
Direct payments
• Redistribution
• among MS
• within MS
• Redesign
• basic uniform rate
• “greening” of direct
payments
• coupled support
provisions
Based on two pillar structure
Market measures
• Continue market
orientation
• Streamline and
simplify safety nets
• Improve food chain
functioning
Rural development
• Main guideline themes
• environment
• climate change
• innovation
• Improvements in
• coherence with other
policies
• delivery mechanisms
• Address risk management
• Better targeting
• areas with specific
natural constraints
• capping payments
• small farmers
• New distribution criteria
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Haniotis - ABARES Outlook 2011
Average direct payments per potentially
eligible area and beneficiary
Direct payments net ceilings fully phased-in (in 2016)
EUR/ha
EUR/ben.
800
48000
700
40000
600
32000
500
400
24000
300
16000
200
8000
100
Latvia
Estonia
Lithuania
Portugal
Romania
Slovakia
EU-12
Poland
Bulgaria
United Kingdom
Sweden
Finland
Spain
Czech Republic
Hungary
Austria
Ireland
EU-27
Luxembourg
EU-15
France
Germany
Slovenia
Denmark
Cyprus
Greece
Italy
Netherlands
Belgium
0
Malta
0
DP net ceilings fully phased-in (EUR/ha)
EU-27 average (EUR/ha)
DP net ceilings fully phased-in (EUR/beneficiary)
Source: European Commission - DG Agriculture and Rural Development
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Next steps
Inter-institutional debate on the Commission Communication
Preparation of Impact Assessment (IA)
• In-depth Commission analysis of new policy settings, options and their
economic, social, environmental and administrative impacts
• Stakeholders consultation: analytical contributions from stakeholders
based on a Consultation document
Preparation of Legal Proposals
Legal proposals presented in 2011
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Haniotis - ABARES Outlook 2011
Thank you
http://ec.europa.eu/agriculture/cap-post-2013
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Haniotis - ABARES Outlook 2011