the future of cap...side event to the wto committee on agriculture. eighth session of the amis rapid...
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Side event to the WTO Committee on AgricultureEighth Session of the Amis Rapid Response Forum 26 February 2019, Geneva
The Future of CAPand the shift towards performance
Tassos HaniotisDirector - DG AGRIEuropean Commission
#FutureofCAP
The Future CAP in a nutshell
2
Agriculture andRural Development
• THE FUTURE CAP PRIORITIES AT A GLANCE
Simplification and modernisation of the CAP …
… and a fairer and more effective distribution of support across MS and farmers
Support to the development of a knowledge-based agriculture …
… with higher ambition on environment and climate action
A more balanced way of working together between EC and MS …
… and a shift from compliance to performance
3
How much: CAP budget in perspective
4
Agriculture andRural Development5
THE CAP GRADUAL SHIFTED FROM PRICE SUPPORT…
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0
10
20
30
40
50
60
70
801
98
01
98
11
98
21
98
31
98
41
98
51
98
61
98
71
98
81
98
91
99
01
99
11
99
21
99
31
99
41
99
51
99
61
99
71
99
81
99
92
00
02
00
12
00
22
00
32
00
42
00
52
00
62
00
72
00
82
00
92
01
02
01
12
01
22
01
32
01
42
01
52
01
62
01
72
01
82
01
92
02
02
02
12
02
22
02
32
02
42
02
52
02
62
02
7
as share of GDPin billion EUR
Export subsidies Other market measures Coupled supportDecoupled support of which direct payments of which green paymentsRural development - environment/climate Rural development - other measures Pillar I 2021-2017 proposal (excl. mkt)Pillar II 2021-2027 proposal Current CAP excl UK CAP as share of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27 EU-28 EU-27
Source: EC-DG AGRI.Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027.
Agriculture andRural Development6
…TO COUPLED PRODUCER SUPPORT…
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0
10
20
30
40
50
60
70
801
98
01
98
11
98
21
98
31
98
41
98
51
98
61
98
71
98
81
98
91
99
01
99
11
99
21
99
31
99
41
99
51
99
61
99
71
99
81
99
92
00
02
00
12
00
22
00
32
00
42
00
52
00
62
00
72
00
82
00
92
01
02
01
12
01
22
01
32
01
42
01
52
01
62
01
72
01
82
01
92
02
02
02
12
02
22
02
32
02
42
02
52
02
62
02
7
as share of GDPin billion EUR
Export subsidies Other market measures Coupled supportDecoupled support of which direct payments of which green paymentsRural development - environment/climate Rural development - other measures Pillar I 2021-2017 proposal (excl. mkt)Pillar II 2021-2027 proposal Current CAP excl UK CAP as share of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27 EU-28 EU-27
Source: EC-DG AGRI.Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027.
Agriculture andRural Development7
…AND THEN TO DECOUPLED SUPPORT…
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0
10
20
30
40
50
60
70
801
98
01
98
11
98
21
98
31
98
41
98
51
98
61
98
71
98
81
98
91
99
01
99
11
99
21
99
31
99
41
99
51
99
61
99
71
99
81
99
92
00
02
00
12
00
22
00
32
00
42
00
52
00
62
00
72
00
82
00
92
01
02
01
12
01
22
01
32
01
42
01
52
01
62
01
72
01
82
01
92
02
02
02
12
02
22
02
32
02
42
02
52
02
62
02
7
as share of GDPin billion EUR
Export subsidies Other market measures Coupled supportDecoupled support of which direct payments of which green paymentsRural development - environment/climate Rural development - other measures Pillar I 2021-2017 proposal (excl. mkt)Pillar II 2021-2027 proposal Current CAP excl UK CAP as share of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27 EU-28 EU-27
Source: EC-DG AGRI.Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027.
Agriculture andRural Development8
…WITH MORE FLEXIBILITY EXPECTED IN THE FUTURE
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0
10
20
30
40
50
60
70
801
98
01
98
11
98
21
98
31
98
41
98
51
98
61
98
71
98
81
98
91
99
01
99
11
99
21
99
31
99
41
99
51
99
61
99
71
99
81
99
92
00
02
00
12
00
22
00
32
00
42
00
52
00
62
00
72
00
82
00
92
01
02
01
12
01
22
01
32
01
42
01
52
01
62
01
72
01
82
01
92
02
02
02
12
02
22
02
32
02
42
02
52
02
62
02
7
as share of GDPin billion EUR
Export subsidies Other market measures Coupled supportDecoupled support of which direct payments of which green paymentsRural development - environment/climate Rural development - other measures Pillar I 2021-2017 proposal (excl. mkt)Pillar II 2021-2027 proposal Current CAP excl UK CAP as share of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27 EU-28 EU-27
Source: EC-DG AGRI.Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027.
Achievements and challenges at a glance
9
Agriculture andRural Development
• WHY: LESSONS LEARNT FROM ASSESSING THE CAP Analysis and wide public consultation confirm major achievements of the CAP…• Increase in EU competitiveness turned the EU into a net agro-food value-added exporter
• Positive impact on jobs, growth and poverty reduction spread in all EU rural areas
• Relative income stability within a very volatile farm-income and commodity-price environment
…but analysis and public opinion also reveal shortcomings to be addressed…• Despite progress, the environmental performance of EU agriculture requires improvement
• Productivity growth is mainly driven by labour outflow and less by R&I or investment
• Equity, safety net and simplicity questions persist despite CAP efforts to address them
…in a changing broader environment within which the CAP operates• Expectations about the level of agricultural and commodity prices changed from CAP post-2013
• The world trade environment has shifted from multilateral to bilateral/regional agreements
• New climate change, environmental and sustainability commitments stem from COP21 and SDGs
10
Agriculture andRural Development11
GAP BETWEEN EU AND WORLD PRICES
0%
50%
100%
150%
200%
250%
300%
350%1
99
1
19
92
19
93
19
94
19
95
19
96
19
97
19
98
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99
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00
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01
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20
17
EU price as percentage of world price
Wheat Milk Beef (AU) Beef (BR) Sugar
Source: DG AGRI.
Agriculture andRural Development12
EU 28 AGRI-FOOD (2005-17)
-150
-100
-50
0
50
100
150
200
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EU agricultural exports and imports 2005-17 (in billion €)
Commodities Other primary Processed (incl. wine) Food preparations Beverages Non-edible Balance
Source: DG AGRI.
Agriculture andRural Development13
EVOLUTION OF NOMINAL FARM INCOME
Source: DG AGRI, based on Eurostat and USDA data.
50
75
100
125
150
175
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EU and US nominal farm income (2010=100)
EU net cash income US net cash income EU entrepreneurial income US net farm income
Agriculture andRural Development14
PROGRES ON CLIMATE AND ENVIRONMENT
70
80
90
100
110
120
130
140
150
19
90
19
91
19
92
19
93
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94
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95
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96
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98
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99
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00
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01
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02
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05
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08
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09
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10
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11
20
12
20
13
20
14
20
15
Reduction in environmental impact indicators (2010=100)
Ammonia emissions from agriculture GHG emissions from agriculture Gross nitrogen balance
Source: Eurostat.
Agriculture andRural Development15
FOR WHOM: CONVERGENCE OF DIRECT PAYMENTS (2027)
Source: EC-DG AGRI.Note: Direct payment amounts exclude payments for cotton.
0
100
200
300
400
500
600
MT EL NL BE IT HR CY DK DE SI FR EU27
LU AT IE HU CZ ES SE FI PL BG SK RO PT LT LV EE
EUR/ha
Average DP/ha baseline Average DP/ha after cut before convergenceAverage DP/ha after cut after convergence (2027) New EU averageBaseline EU average 90% of EU average after cut before convergence
Agriculture andRural Development16
DISTRIBUTION OF DIRECT SUPPORT TO EU FARMERS
Source: EC-DG AGRI.
50.5%
4.9% 5.8%
48.4%
67.4%72.1%
1.1%
27.8% 22.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Farms Farmland managed Direct support
Big farms (> 250 ha)
Professional (family)farms (5-250 ha)
Small farms (<= 5 ha)
Agriculture andRural Development17
COMMODITY PRICE WAVES (REAL PRICE INDICES)
Source: World Bank.
0
20
40
60
80
100
120
140
160
180
200
19
60
19
61
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62
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00
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(2010 = 100)
Agriculture Fertilizers Energy Metals & minerals
Agriculture andRural Development18
WORLDWIDE EXTREME WEATHER EVENTS
0
100
200
300
400
500
600
700
8001
98
0
19
81
19
82
19
83
19
84
19
85
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86
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87
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09
20
10
20
11
20
12
20
13
20
14
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15
20
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20
17
Natural catastrophes worldwide - number of events
Meteorological events Hydrological events Climatological events
Meteorological events: Tropical storm, extra-tropical storm, convective storm, local stormHydrological events: Flood, mass movementClimatological events: Extreme temperature, drought, forest fire
Source: © 2017 Münchener Rückversicherungs-Gesellschaft,Geo Risks Research, NatCatService (January 2017)
CAP objectives and priorities
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Agriculture andRural Development20
Pw
P
Q
Farming 4.0
COP21 and SDGs
Societal demands
GlobalisationS0 S1S2
D
Pe
produce more withless (inputs)
produce less withmore (costs)
change in tastes and preferences
macro-economyand trade
Mind the gaps!KnowledgeApplicationsPerceptions
• GLOBAL CHALLENGES AND THE BIG PICTURE
Agriculture andRural Development
Ensure fair incomeIncrease Competitiveness
Rebalance power in food chains
FOSTER A BOLSTER STRENGTHENRESILIENT FARM SECTOR ENVIRONMENT AND CLIMATE FABRIC IN RURAL AREAS
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WHAT FOR: THE NEW ARCHITECTURE OF CAP OBJECTIVES
SPECIFIC CAP OBJECTIVES
BROADER CAP OBJECTIVES
Generational renewalVibrant rural areas
Food and health quality
Climate change actionEnvironmental care
Landscapes and biodiversity
Economic Environment & ClimateEnvironment & Climate Social
CROSS-CUTTING CAP OBJECTIVES
ModernisationSustainability Simplification
Agriculture andRural Development
EU Specific objectives
Set of common IndicatorsEU
Broad types of interventions
Identification of needs in MS's CAP Plan
Tailor CAP interventions to their needs
Implementation / Progress towards targets
MEMBER STATES
HOW: THE NEW DELIVERY MODEL OF THE CAP
22
Agriculture andRural Development
• IMPACT ASSESSMENT: ITS CONCLUSIONS AT A GLANCE
Redistribution and better targeting of support: income effects• Income effects are asymmetric with respect to farm size and sector affected
• Both cuts and the distribution of support matter, negatively impacting short-run competitiveness
• Flexibility in redistribution of support crucial in mitigating potentially negative income impacts
The dilemma of raising environmental ambition: mandatory or voluntary?• Voluntary measures increase flexibility and improve targeting, but introduce uncertainty in ambition
• Mandatory measures increase area coverage and improve ambition, but are by design less targeted
• The right balance, based on needs and evidence, requires appropriate administrative capacity
Risks and mitigating factors: impact on modernisation and simplification• Challenges at the EU level: Simplification of legislation and approval procedures of Strategic Plans• Challenges at the MS level: Evidence supporting a needs-based approach for Strategic Plans• Challenges at the farm level: Better link to advice and faster integration into Farming 4.0 realities
23
Agriculture andRural Development
REPORTS AND MORE INFORMATION
On MFF Material
https://ec.europa.eu/commission/publications/factsheets-long-term-budget-proposals_en
http://ec.europa.eu/budget/mff/index_en.cfm
On CAP legislative proposals, Impact Assessment and Background
https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/future-cap_en
https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/future-cap_en#documents
Thank you for your attention!24