the cap reform process in perspective: issues of the post-2013 debate tassos haniotis, director...
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The CAP reform process in perspective:The CAP reform process in perspective:issues of the post-2013 debateissues of the post-2013 debate
Tassos Haniotis, Director
Directorate for Economic Analysis, Perspectives and Evaluations
DG for Agriculture and Rural Development
European Commission
T. Haniotis CAP perspectives 2
The long-term CAP perspectiveThe long-term CAP perspective
The general context of the CAP debate– The question about “P” in the CAP
– The question about the "C" in the CAP
– The debate about the two pillar structure of the CAP
The post HC context of the CAP debate– Volatility in agricultural production and prices
– Impact of the economic crisis on agriculture
– Food security in the context of climate change and limited resources
The institutional context of the CAP debate – New European Parliament and Commission
– Lisbon Treaty
– WTO prospects
T. Haniotis CAP perspectives 3
Directpayments
Basic rate
Markets
Ruraldevelopment
Innovation
Environment
Territory
Income
Structural
adjustment
Public
go
ods
Riskmanagement
Marketinstruments
Food chainissues
Other criteria
GAEC
BudgetBudget
Economiccrisis
Economiccrisis
ClimatechangeClimatechange
The CAP debate at a glanceThe CAP debate at a glance
T. Haniotis CAP perspectives 4
For further informationFor further information
The CAP after 2013 http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm
EU agriculture and CAP reformhttp://ec.europa.eu/agriculture/index_en.htm
Economic Analysis and Evaluation http://ec.europa.eu/agriculture/analysis/index_en.htm
Agricultural Policy Analysis and Perspectiveshttp://ec.europa.eu/agriculture/analysis/perspec/index_en.htm
T. Haniotis CAP perspectives 5
Thank youThank you
T. Haniotis CAP perspectives 6
RuralDevelopment
Direct payments
Markets
Pillar I
Pillar II
The CAP and the budgetThe CAP and the budget
Modulation
T. Haniotis CAP perspectives 7
CAP expenditure and CAP reform pathCAP expenditure and CAP reform path
2007 constant prices
0
10
20
30
40
50
60
70
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
% GDPbillion €
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
Export subsidies Other market support Coupled direct paymentsDecoupled direct payments Rural development % of EU GDP
EU-10 EU-12 EU-15 EU-25 EU-27
Source: European Commission – DG Agriculture and Rural Development
T. Haniotis CAP perspectives 8
0%
10%
20%
30%
40%
50%
% of GDP
CAP expenditure All EU public expenditure
Alternative views on the cost of the CAPAlternative views on the cost of the CAP
0
20
40
60
80
100
120
Billion of euros
CAP expenditure EU budget
CAP cost in 2008 (in relative terms)
CAP cost in 2008 (in absolute terms)
0.43% ofEU GDP
44% of EU budget
Source: European Commission – DG Agriculture and Rural Development
T. Haniotis CAP perspectives 9
CAP budget trends in perspectiveCAP budget trends in perspective
( % share of GDP )
30%
35%
40%
45%
50%
55%
60%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
0.30%
0.35%
0.40%
0.45%
0.50%
0.55%
0.60%
% of public expenditure in EU GDP (left axis) % of CAP expenditure in EU GDP (right axis)
Source: European Commission – DG Agriculture and Rural Development
T. Haniotis CAP perspectives 10
Evolution of commodity price indexes (1960-2009)Evolution of commodity price indexes (1960-2009)
(2000 = 100)
0
100
200
300
400
500
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
Source: World Bank, March 2010
Agriculture Food Energy Fertilizers Metals/minerals
T. Haniotis CAP perspectives 11
Cumulative reductions in EU price supportCumulative reductions in EU price support
Cumulative % reduction in price support from 1991 to 2009
-100
-80
-60
-40
-20
0
Soft wheat Durumwheat
Beef Rice Butter SMP Sugar
In nominal terms In real terms
Source: European Commission - DG Agriculture and Rural Development
T. Haniotis CAP perspectives 12
The evolving role of EU support prices - wheat The evolving role of EU support prices - wheat
0
50
100
150
200
250
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
( in € per metric tonne )
EU intervention price EU common wheat market price US (SRW Gulf)
Sources: European Commission - DG Agriculture and Rural Development and World Bank
T. Haniotis CAP perspectives 13
Impact of CAP reforms on EU net production surplusImpact of CAP reforms on EU net production surplus
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Wheat Barley Maize Beef Pork Poultry SMP Butter Cheese Sugar
Net production surplus as % of consumption
Net production surplus: 1990/94 ol avg Net production surplus: 2004/08 ol avg
Sources: European Commission - Eurostat, OECD-FAO, USDA and Fapri
T. Haniotis CAP perspectives 14
Recent trends in some commodity market pricesRecent trends in some commodity market prices
EUR/t for maize and fresh milk
0
50
100
150
200
250
300
350
400
Jan-
00M
ay-0
0Se
p-00
Jan-
01M
ay-0
1Se
p-01
Jan-
02M
ay-0
2Se
p-02
Jan-
03M
ay-0
3Se
p-03
Jan-
04M
ay-0
4Se
p-04
Jan-
05M
ay-0
5Se
p-05
Jan-
06M
ay-0
6Se
p-06
Jan-
07M
ay-0
7Se
p-07
Jan-
08M
ay-0
8Se
p-08
Jan-
09M
ay-0
9Se
p-09
Jan-
10
0
25
50
75
100
125
150
175
200
Crude oil, EUR/bbl
Fresh milk, EU Maize, US, Gulf Crude oil, avg spot price
Sources: European Commission - DG Agriculture and Rural Development and World Bank
T. Haniotis CAP perspectives 15
0
100
200
300
400
500
600
700
Mal
ta
Gre
ece
Net
herla
nds
Bel
gium
Cyp
rus
Den
mar
k
Ital
y
Ger
man
y
Hun
gary
Irel
and
Slo
veni
a
Fra
nce
EU
-15
Bul
garia
Luxe
mbo
urg
Cze
ch R
epub
lic
EU
-27
Fin
land
Sw
eden
Aus
tria
Uni
ted
Kin
gdom
Slo
vaki
a
Spa
in
Pol
and
EU
-12
Por
tuga
l
Lith
uani
a
Rom
ania
Est
onia
Latv
ia
EUR/ben.EUR/ha
0
7000
14000
21000
28000
35000
42000
DP net ceilings fully phased-in (EUR/ha) EU flat rate DP net ceilings fully phased-in (EUR/beneficiary)
Average payments per ha (UAA) and per beneficiaryAverage payments per ha (UAA) and per beneficiary
Source: European Commission – DG Agriculture and Rural Development
T. Haniotis CAP perspectives 16
Share of DP and total subsidies in agricultural income 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 2004 2005 2006 2007 2008
Share of DP in agricultural income Share of total subsidies in agricultural income
Source: European Commission – DG Agriculture and Rural Development
EU-15 EU-12
T. Haniotis CAP perspectives 17
( Index 2000 = 100 )
60
70
80
90
100
110
120
130
140
150
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
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
EU developments in agricultural incomeEU developments in agricultural income (agricultural income/AWU in real terms)(agricultural income/AWU in real terms)
Source: Eurostat
EU-15
EU-12
T. Haniotis CAP perspectives 18
Recent evolution of agricultural input and output pricesRecent evolution of agricultural input and output prices
75
90
105
120
135
150
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
( 2000 = 100 )
Input prices (nominal) - EU-27 Output prices (nominal) - EU-27Input prices (deflated) - EU-27 Output prices (deflated) - EU-27
Source: Eurostat
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