The CAP towards 2020Common Market Organisation

Regulation 1308/2013 of the European Parliament and the Council

("CMO" Regulation)

Regulation 1370/2013 of the Council ("Fixing" Regulation)

Meeting with COMAGRI: 23 September 2014

DG Agriculture and Rural DevelopmentEuropean Commission

Intervention price 101.31

US 3YC Gulf

Maize - FR Bordeaux

Wheat - FR Cl. 1 Rouen

US SRW Gulf

50

100

150

200

250

300

350

€/to

n -

FOB

Maize and Wheat prices

110.25

Source: IGC and DG AGRI

EU 28 - Cereals exports and imports from 2000 to 2014(including flour and other processed products in grain equivalent)

3

Wheat imports

Coarse grain imports

Wheat exports

Coarse grain exports

Trade balance

30

20

10

0

10

20

30

40

mio

t

Marketing Year (July-June)

IMPORTS

EXPORTS

Source: EUROSTAT

4

EU competitiveness Milk

5

452403

446401

436 429398

491 513 529565

513556

395431

380323 307

334

189

1.263

1.1711.120

825

1.028

736

598 598

481455

352292

248292

249

473

624

508454

312

0

200

400

600

800

1.000

1.200

1.400

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-Jul14

1000 Tonne

IMPORTS EXPORTS

EU trade in bovine products

46.1

35

59.7

20

71.9

37

51.6

41

63.8

00

55.9

18

56.0

77

54.4

99

72.2

76

22.6

12

21.7

30

32.3

68

43.1

79

59.8

38

51.7

89

44.1

91

36.0

87

37.1

18

33.8

45

20.6

79

881.

011

943.

405

1.08

3.23

0

1.23

8.13

8

1.55

6.96

1

1.54

5.90

7

1.33

1.80

8

1.52

6.56

3

1.50

9.30

2

1.78

0.56

8

1.93

8.45

5

2.08

9.36

3

1.91

0.90

8

2.56

9.08

7

2.38

6.24

5

2.62

7.62

1 3.13

3.57

0

3.07

2.45

7

3.10

0.88

4

1.59

4.44

3

0

250.000

500.000

750.000

1.000.000

1.250.000

1.500.000

1.750.000

2.000.000

2.250.000

2.500.000

2.750.000

3.000.000

3.250.000

3.500.000

3.750.000

4.000.000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-Jul 14

Tonn

es p

rodu

ct w

eigh

t

.

IMPORTS EXPORTS

EU trade of pig products

302 277 292 310371

676

794

480

614 616

858891 876

821857 867

813

484

1.017

1.101 1.1161.153

1.114

1.275

1.063 1.046997 997

867

9821.016

1.265

1.414 1.431 1.426

849

0

200

400

600

800

1.000

1.200

1.400

1.600

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-Jul14

in 1000 Tonnes cwe

IMPORTS EXPORTS

EU trade in Poultry products

EU Egg Trade Balance (not including Hatching eggs)

1018

2318 17

27

16

30

69

2530

3945

2330

34

21

38

20

7

144

164

186

209

231

201 205

191

142

198 198202

167

187

150

182

217

186

215

126

0

25

50

75

100

125

150

175

200

225

250

275

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Jan-Jul14

in 1000 Tonnes

IMPORTS EXPORTS

DG AGRI C2 18 September 2014

EU Wine Trade Balance66

552 20

5 14

4

528

396

512

956 72

0 70

1

432

446

383

194

200

234

177

564

158

903

204

056 37

6 68

4

900

946

856

319

1 02

8 48

3

1 17

0 16

0

1 34

9 68

1

1 25

9 07

4

1 30

9 85

9

1 17

2 79

5

1 40

2 82

7

1 52

6 08

3

1 68

2 96

3

1 80

0 39

2

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

500 000

1 000 000

1 500 000

2 000 000

2 500 000

Import in Value Export in Value

in 1 000 Eur

EU Olive oil Trade Balance66

552 20

5 14

4

528

396

512

956 72

0 70

1

432

446

383

194

200

234

177

564

158

903

204

056 37

6 68

4

900

946

856

319

1 02

8 48

3

1 17

0 16

0

1 34

9 68

1

1 25

9 07

4

1 30

9 85

9

1 17

2 79

5

1 40

2 82

7

1 52

6 08

3

1 68

2 96

3

1 80

0 39

2

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

500 000

1 000 000

1 500 000

2 000 000

2 500 000

Import in Value Export in Value

in 1 000 Eur

Taking stock …

The focus on market orientation has resulted in:

• An EU agricultural sector that is competitive with prices in most sectors in line with world prices, other than butter.

• The EU being an open market – the biggest importer of agricultural products, but also a net exporter in recent years.

The main developments to EU agricultural markets are:

• Increased volatility, also due to further integration into world market.

• Shocks from market disruptions (e.g. Russian embargo, diseases, adverse weather).

• End of quotas for milk and sugar – no shocks expected.

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The new CMO Regulation

Role of new CMO Regulation is to:

• Provide an effective safety net (public intervention/private storage) and to intervene in crisis situations (new crises reserve - €400M p.a. in 2011 prices).

• Encourage producer cooperation to improve bargaining power in a situation where consolidation in downstream sectors is increasing.

• Aid schemes for certain sectors (fruit and vegetables, wine, olive oil, apiculture) and specific purposes (schools).

• Marketing standards for agricultural products – important element.

Note: limited budget for market measures - around €2.7 billion p.a.

13

The crises measures in use – Russian embargo

Measures introduced already, on basis of Article 219 CMO, in response to Russian embargo:

Fruit and vegetables sector:• Possibility to use safety net with improved conditions for POs and

individual producers for withdrawal, green harvesting and non-harvesting operations.

• More targeted measure, taking into consideration exported quantities to Russia, covering withdrawal, green harvesting and non-harvesting operations.

Dairy sector:• Specific private storage aid scheme for certain cheeses.• Private storage aid scheme for butter and skimmed milk powder (Article

17 CMO).• Extension of the public intervention period buying-in period for butter and

SMP until end-2014.

Crises provisions have worked, additional experience to be gained14

The CAP and competition law

Competition law applies to agriculture unless otherwise provided

CMO contains derogations:•Farmers' agreements on production, sale and storage unless risk for CAP objectives (Art 209 CMO).•Collective negotiations by Producer Organisations in certain sectors: milk, beef & veal, olive oil, arable crops (Art 169-171 CMO).•Special regimes such as fruit & vegetables, sugar.

DG COMP drafts guidelines on Art 169-171 CMO•Aiming at legal certainty.•Interpretation of conditions of applicability of collective negotiations.•Continued role for National Competition Authorities.

Improving producer cooperation

16

OR

oCMO promotes increased cooperation between producers through the producer organisation (PO) and interbranch organisations (IBO) model – all sectors.

oPossibility for MS to regulate the supply of cheese or ham covered by a PDO or PGI, at the request of producers and subject to certain conditions and safeguards.

oPossibility for MS to introduce mandatory written delivery contracts for all sectors, with certain minimum contractual elements, subject to certain conditions and safeguards.

oContinuation of sugar sector agreements and contracts after end of quotas in 2017.

Lisbon Treaty issues

Ordinary legislative procedure (OLP)•First experience of OLP under Article 43(2) of the Treaty confirms tendency of Legislators to put detailed provisions in basic act, rather than give delegated powers to COM.•Risk – less operational, lack of future flexibility and slow reaction to technological developments.

New CMO delegated and implementing acts•Over 200 Commission Regulations with legal base CMO. Aim is to "reduce" to less than 40 new delegated and implementing acts.•Task Force set-up – new open working method involving active engagement with the EP, Member States and stakeholders.•Aim is simplification, lower administrative burden, and fewer errors.

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Thank you for your attention, any questions?

18

European CommissionDG Agriculture and Rural Development