CAP Perspectives in the light of WTO

Dirk AhnerDirectorate General for Agriculture and Rural Development

Prague, 26 May 2006

Visions of long-term agricultural and rural development in the EU

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The Future of the CAP

Three different angles

The financial perspective

The balance between pillar 1 and pillar 2

and the future of rural development policy

The development of CAP market and

income support policies

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The Financial Perspective

The Financial Perspective 2007-2013

=> Budget stabilisation and burden sharing

=> Decrease of expenditure for agriculture and

rural development in real terms

The financial review of 2008/09

=> « Reassessment of the financial framework »,

=> including the CAP

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The Financial Review 2008/09

→ Possible subjects based on Agenda 2000

discussions

– Cofinancing of direct payments

– Progressive reduction of direct payments over time

– Reduction thresholds applied to direct payments

– Capping

→ Modulation

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Modulation

AGENDA 2000 - Optional Modulation (I) CAP Reform 2003 – Compulsory

Modulation European Council 2005 – Optional

Modulation (II) Review 2008 – Common approach?

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The Future of Rural Development Policy

Strengthening of pillar 2

Rural development policy 2007-2013

Tasks and challenges for the future

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Reasons to strengthen 2nd Pillar

Rural development measures allow targeted, proactive actions

Rural development policy works in a flexible and de-centralised way, in a framework of partnership

Rural development policy is perceived positively by the public

Rural development policy can be defended as “Green Box” compatible

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Rural Development

2007-2013

« LEADER Approach »

Objective 1 Competi -tiveness

Objective 2 Environment

+ Land

Management

Objective 3 Economic

Diver. +

Quality of Life

National co-financing

Rural Development Fund

Overall Architecture

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Rural Development Policy in the EU

Challenges and questions for the future:

Analytical and conceptual questions

Policy content

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Market Policy and Direct Payments (Pillar I)

The international trade environment

WTO Doha Round

Bilateral agreements

Unilateral commitments

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Market Policy and Direct Payments

Perspectives

Direct payments – continuation of reform path

Market management instruments – reflection needed

- for external reasons (phasing out of subsidised exports)

- for internal reasons (growing regional imbalances in an enlarged internal market)

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Market Opportunities

High quality/high value added production- geographical designations; traditional products- quality policy

Biomass for industry and energy=> New opportunities - climate change and high oil prices - ambitious policy targets - significant impacts=> But also uncertainties …

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Thank you very much for your attention.