Ⓒ

Olo

f S

.

Hvordan ser den kommende reform af den fælles europæiske landbrugspolitik ud?

Europa-Konference, Vejle, 29. oktober 2010

Lars Hoelgaard, vicegeneraldirektørGeneraldirektoratet for landbrug og udvikling af

landdistrikterne Europa-Kommissionen

2

Importance of agriculture in the EU territory

• 13.7 million farms (70% with less than 5 ha)

• The agrifood sector has 17.5 million employees (7.7% of total employment)

3

Recent evolution of agricultural input and output prices

Source: Eurostat

75

90

105

120

135

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

( 2005 = 100 )

Input prices (nominal) - EU-27 Output prices (nominal) - EU-27Input prices (deflated) - EU-27 Output prices (deflated) - EU-27

4

EU developments in agricultural income (agricultural income/AWU in real terms)

( Index 2000 = 100 )

60

70

80

90

100

110

120

130

140

150

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EU-15

20

40

60

80

100

120

140

160

180

200

EU-12

Source: Eurostat

EU-15

EU-12

5

5

CAP’en p.t. - instrumenterCAP’en p.t. - instrumenter

Direct payments

Adjusted SPS

GAEC

Markets

Price support/Quotas reform

Rural development

Competitiveness& innovation

Environment andland management

Quality of life,diversification

Income

Structural

adjustment

Public

goods

Income safety net

6

6

RuralDevelopment

Direct payments

Markets

Pillar I

Pillar II

Instrumenternes budgetvægtInstrumenternes budgetvægt

Modulation

7

1992 CAP cost

0

20

40

60

80

100

120

140

Billion EUR

CAP expenditure EU budget

2007 CAP cost

0

20

40

60

80

100

120

140

Billion EUR

CAP expenditure EU budget

Evolution of CAP share in EU budget…

8

… and alternative views on its cost

0%

10%

20%

30%

40%

50%

60%

% of GDP

CAP expenditure All EU public expenditure

0

20

40

60

80

100

120

140

Billion of euros

CAP expenditure EU budget

CAP cost in 2009 (in relative terms)

CAP cost in 2009 (in absolute terms)

0.5% ofEU GDP

41% of EU budget

Source: European Commission - DG Agriculture and Rural Development

9

CAP reform fra Gul til Grøn WTO Box

0

10

20

30

40

1993 2000 2010

billion €

Market measures Area/animal payments (coupled payments) Single Farm Payment (decoupled payments)

EU-12 EU-15 EU-27

10

What are the objectives with the reform?

Viable foodproduction

Sustainable management of

natural resources

Balanced territorialdevelopment

• to contribute to farm income and limit its variability

• to improve sector competitiveness and share in food chain value-added

• to compensate areas with natural constraints

• to guarantee the provision of public goods

• to foster green growth through innovation

• to pursue climate change mitigation and adaptation

• to support rural vitality and employment

• to promote diversification

• to allow social and structural diversity in rural areas

Common EU response needed

11

Climate change- Possible impacts on EU agriculture

▲ Floods risk▲ Hotter and drier summers▲ Sea levels▲ Risk crop pests, diseases▲ Crop, forage yields▼ Animal health, welfare

▼ Water availability ▲ Risk drought, heat spells▲ Risk soil erosion▼ Growing season, crop yields ▼ Optimal crop areas

▼ Summer rainfall▲ Winter storms, floods▲ Length growing season, yields▲ Suitable farmland▲ Pests, diseases risks

▲ Winter rainfall, floods ▼ Summer rainfall ▲ Risk drought, water stress ▲ Soil erosion risk ▲ Yields, range of crops

Source: DG Agriculture and Rural Development, based on EEA reports, JRC and MS academic studies

12

Average direct payments per potentially eligible area and beneficiary

Direct payments net ceilings fully phased-in (in 2016)

Source: European Commission - DG Agriculture and Rural Development

0

100

200

300

400

500

600

700

800

Mal

ta

Bel

gium

Net

herla

nds

Italy

Gre

ece

Cyp

rus

Den

mar

k

Slo

veni

a

Ger

man

y

Fra

nce

EU

-15

Luxe

mbo

urg

EU

-27

Irel

and

Aus

tria

Hun

gary

Cze

ch R

epub

lic

Spa

in

Fin

land

Sw

eden

Uni

ted

Kin

gdom

Bul

garia

Pol

and

EU

-12

Slo

vaki

a

Rom

ania

Por

tuga

l

Lith

uani

a

Est

onia

Latv

ia

EUR/ben.EUR/ha

0

8000

16000

24000

32000

40000

48000

DP net ceilings fully phased-in (EUR/ha)EU-27 average (EUR/ha)DP net ceilings fully phased-in (EUR/beneficiary)

360 € = 2600 kr/ha

13

Relative situation of agricultural income in the EU

Income gap with the rest of the economy

(average 2005-2007)

Agricultural income level between Member States

(2009)

Source: European Commission - DG Agriculture and Rural Development, based on Eurostat data

(agricultural income as % of average income in the total economy)

0%

20%

40%

60%

80%

100%

EU-15 EU-27 EU-10

(agricultural income/AWU in real terms - EU-27 = 100)

0

25

50

75

100

125

150

175

200

EU-15 EU-27 EU-10

14

What policy instruments?

Better targeted to objectives Based on two pillar structure

Direct payments Market measures Rural development

• Market orientation

• Streamline and simplification

• Improved food chain functioning

• Environment, climate change and innovation as guideline themes

• Improved coherence with other EU policies

• More effective delivery mechanisms

• Address risk management

• New distribution criteria

• Redistribution

• Redesign

• Better targeting

15

4c. What policy options?

Option 1

‘Adjusting’

Continue the reform process by introducing further gradual changes while adjusting the most pressing shortcomings (e.g. more equity in the distribution of direct payments)

Option 2

‘Balancing’

Capture the opportunity for reform ensuring that CAP becomes more sustainable and balanced (between policy objectives, MS and farmers) through more targeted measures

Option 3

‘Refocusing’

More fundamental reform focusing entirely on environmental and climate change objectives through rural development, moving away from income support and most market measures

16

What policy options?D

irec

tp

aym

ents

• More equitable distribution among MS and among farmers

• More equitable distribution among MS and among farmers

• Greening of direct payments• Capping of payments• Small farmers

• Gradually phase out direct payments

Mar

ket

mea

sure

s • Streamlining and simplification of existing measures

• Streamlining and simplification of existing measures

• Phase-out most measures

• Keep disturbance clause for severe crises

Ru

ral

dev

elo

pm

ent • Continue emphasis on

climate change, biodiversity, bio energy and innovation

• Importance of environment, restructuring and innovation, local initiatives

• Risk management tools and income stabilisation tool

• New distribution criteria

• Primarily focus on measures linked to the environment and the delivery of public goods

Option 1

‘Adjusting’

Option 2

‘Balancing’

Option 3

‘Refocusing’

17

Share of DP and total subsidies in agricultural income

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009

Share of DP in agricultural income Share of total subsidies in agricultural income

EU-15 EU-12

Source: European Commission - DG Agriculture and Rural Development

18

Conclusions from Scenar 2020 - II

“Finally, the removal of Pillar 1 payments under the Liberalisation scenario would also translate into reduced agricultural land use, as an important source of revenue for farming is removed. Reducing first pillar payments leads, on the one hand, to intensification of the use of land in the core production areas to earn a decent living and, on the other hand, to land abandonment in marginal production areas, as it becomes unprofitable in these regions.”

19

Tidsplan (1)

• Kommunikation 17. november 2010• Forslag – juridiske tekster – juli 2011• Polen – formandskab - 2/2011• Danmark – formandskab - 1/2012• Cypern – formandskab - 2/2012• Irland – formandskab - 1/2013• Litauen – formandskab - 2/2013

20

Tidsplan (2)

Budget review• Kommissionens meddelelse 19. oktober 2010• Forslag – sommer 2011• Periode 2 x 5?• EP• UK – budgetrabat• FR – CAP’en• Beslutning?

21

For further information

• The CAP after 2013

http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm

• The Communication on the future of the CAP

http://ec.europa.eu/

• Impact Assessment of the Communication

http://ec.europa.eu/

• Agricultural Policy Analysis and Perspectives

http://ec.europa.eu/agriculture/analysis/perspec/index_en.htm