kj poppe eu parliament cap simplification
TRANSCRIPT
Simplification of the CAP
Some suggestions for simplification – a research agenda
Krijn Poppe, research manager and senior economistLEI Wageningen UR September 2015
My guess on administrative burden over time
Environmental policy is not popularRisk of big penalty
Greening not seen as very useful
One flat rate for EU-28 is not a solution: Does not reduce (perceived) administrative burden No relation with public interests Could be unfair and economically distortive:
●Yield common wheat in ton per ha (2010-2012)●Germany: 7.0 <> Bulgaria 3.5
●Land values in Euro per ha (2009)●Dk 25.900; Spain 10.500; Lithuania 1.000
●Labour cost in euro / hour, non-ag. industry●France € 34.60 < > Hungary € 7.30
●And many large farms are in eastern Europe “Decoupled” is a legal WTO term, does not guarantee
that there are no economic effects !
Average share of CAP payments in Farm Net Value AddedFor farms with a payment, 2009-2011 (source: FADN)
Share of decoupled CAP payments in Farm NVA
Duitsland
Grieke
nlandSp
anje
Frankri
jk
Ierland
Italië
Nederland
Zweden
Groot Britt
anië
hongarije
polen0
20
40
60
80
100
grootste bedr. kleinste bedr.
Perc
enta
ge
per farm in 2009-2011
United
King
dom
Farming is very concentrated: 12 mln. farms but:3 mln. produce 75%, 5 mln > 90%.
0 20 40 60 80 100 1200
20
40
60
80
100
120
FranceGermanyUKSpainItalyPolandSweden
percentage farms
perc
enta
ge s
tand
aard
outp
ut
0 5 10 15 20 250102030405060708090
FrancePolandRomania
percentage farms
perc
enta
ge s
tand
aard
outp
ut
Could simplification be realised by separating safety net (income support) from (other) public interests, like greening?
Safety net mainly for small farmers who are uncompetitive and public interests on the bulk of the production (= large farmers)
Simplification can then be realised by: By linking the safety net to the social security and
income tax systems of the countries ? By linking the payments for cross compliance, greening
and other environmental and animal welfare actions of farmers to market initiatives ?
Safety net would cost about 14 bln. (1/3rd pillar I)(simulated on FADN, so a bit more for all farms)
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0
-20000
0
20000
40000
60000
80000
100000
gezinsinkomen minimum inkomen
percentage farms
Fam
ily in
com
e
Family income
Mimimum income (safety net)
Linking to the social security / tax system
Administrative system is in place●If not: does it not become time that farmers are in
the tax and social security system (to be a CAP beneficiary) ?
‘Means-testing’ and testing on ‘Active farmer’ becomes an option
------------------------------------------------------------ The rest of the budget is available for greening or other
public policies on the 3 – 5 million ‘professional’ farms. A multiplier can be reached by linking these payments to
existing sustainability programs of the industry.●Where part of the costs of greening / sustainability
are paid by the marketing of the products
Professional farms are (ICT-) integrated in supply chains
Precision Farming/Advice Segment Cons. supportService ++
• Prescriptive farming• Predictive maintenance• Eco-systems of apps• Regionally pooled big data
analysis for science and advise (and risk mgt.)
• Personalized advise by apps
• Online shops
• Integrated supply chains• Feedback consumer-producer
• Measure, pay sustainability
• Better T&T
• Paperless chain• Store
replenishment• Category
management
Sustainability HealthFood SafetyFood Security
LoyaltySMEs Cost priceGRIN Cope with retail
Transport
Input industriesFarmer Food processor Retail / consumerSoftware
Provider
Logistic solution providers
Transport+
Collaboration and Data Exchange become reality!
Sustainability programs Dutch examples 2012
Company Sustainability report Sustainability program
Unilever yes Unilever Sustainable Living Plan (USLP)
Heineken yes ‘supplier code’, Brewing a Better Future
Friesland-Campina CSR report Route2020
VION Food Group CSR in Annual report Strategic plan “Balancing the Future”
Nutreco ? Sustainability vision 2020
Wessanen ? Supplier Quality Approval (SQA) policy
Van Drie Group yes
Cosun yes
Coupling the CAP with sustainability programs: can it be done? Develop criteria under which condition a sustainability
program qualifies (e.g greening criteria, cross compliance aspects, auditing procedures by certification bodies)
If a sustainability program qualifies, participating farmers get a voucher that they can cash with a paying agency
Potential effects:●Incentive for food chain to work on sustainability in
stead of shifting environmental costs to society●Reduction in administrative burden for farmers due
to integration of public and private demands●Less administrative burden in governments due to
shift from public administration to commercial audits with public audits at a higher level (the programs)
Take home messages Simplification is an issue – that is not solved by changing
some rules on catch crops or Ecological Focus Area One flat rate for EU-28 is not a solution for this problem
It could make sense to separate the policy objectives to reduce the administrative burden:
●Safety net >> integrate with social security / tax●Sustainability (greening, cross compliance) >>
integrate with sustainability programs ICT platforms to exchange data between farmers, agri-
business, audit companies and paying agencies needed This is not done overnight – more exploration of these
options is needed
