Demonstration, Contents and Results End User Meeting 30 March 2010

Demonstration, Contents and Results

End User Meeting 30 March 2010

Cross Compliance Assessment Tool


Expected compliance based on:

- Actual implementation

- If available: National / regional legislation

- Else: EU regulations (2005-2009)






Baseline Implementation of directives and GAECs 2005 - 2009






Voluntary compliance level (range from 0-100%) + actual implementation

Halve way between baseline and 100% compliance + actual implementation

100% compliance level + actual implementation

100% compliance and implementation based on available national / regional legislation specifications only

All mandatory SMRs and GAECs are fully implemented according to the EU regulations

Hypothetical: also all non mandatory SMRs and GAECs are fully implemented (test).


Implementation national/regional legislation

Characterise the national standards (for assessing potential impacts)

Help translate SMRs/GAECs to potential practices and costs (as input for modelling)

Represent ‘national diversity’ in EU as a manageable set of categories.

Contains:

SMRs: 160 measures and 66 specifications

GAECs: 35 different standards (relating to 5 issues)

A total of 2680 national SMRs and 590 national GAECs


Implementation national/regional legislation

1) Characterise the national standards (for assessing potential impacts)

2) Help translate SMRs / GAECs to potential practices and costs (as input for modelling)

3) Represent ‘national diversity’ in EU as a manageable set of categories









How do we translate the implementation specifications at EU, national and regional level into input for the models?


indicators

indicators

Pot. effect B

iodiv & Lands

National / regional

SMR & GAEC

obligations

EURegulationOn SMR &

GAEC

To be transposed into national/regional legislation

No assessment

Per region + activity (per crop, animal type)

Compliance level/scenario

Cost level

YESNO (data)

Imple-mented?

YESNO

Obliga-tory?

CAPRI

MiterraInput data

Input data

Translation of the implementation specifications into indicators


Environmental indicators / scenario- Air : NH3, N2O, CH4, GHG emissions- Water: N leaching, runoff, NO3concentration- Soil : C stock, N, P and metal balances

Comparison

Models in CCAT

Per region + activity

(per crop, animal type)

Compliance level/scenario

Cost level

Market response / scenario:1) Changes in cropping shares 2) Change in livestock type/number

N leaching, runoff, erosionBarley & Maize

EPIC metamodel

N leaching, runoff, N2O emissionsBarley & Maize

DNDCmetamodel

Miterra

Biodiversity indicators / scenario:

Animal Welfare Index / scenarioEconomic indicators (Market, Income) / scenarioCAPRI







• Strongly varied among regions.• 6 Directives are included:

Birds Directive Highest: Sweden, Scotland, Finland, Germany and some Austrian regions.

Nitrates Directive Highest: Italy and Western France. Habitat Directive Only important effects in some Austrian regions

and Navarra (ES). Groundwater Directive Low potential effect in most regions (only in

Germany it has a higher effect) Sewage Sludge Directive Highest in Italy and Germany. Plant Protection Products Directive Low potential effect.

• Highest contribution from Birds and Nitrate Directives.



• Overall highest effectiveness from minimum level of maintenance and soil erosion issues

• Soil structure and additional farmer’s obbligations issues lowest overall effectiveness:

• Only Finland, France, England, Wales, Ireland, Belgium, Spain (except Madrid and Murcia), Portugal and Austria have implemented additional obligations.


Modelled results


Cost of compliance


Cost Implication at EU level


Regional Cost Implication

Total cost per UAA Crop related cost per UAA Animal related cost per LU


Regional Cost Implication

Total cost per UAA Crop related cost per UAA Animal related cost per LU

• Animal production more affected than crops

• Dir 4 (crops and animals) and Dir16-18 (only animals) major cost drivers

• Significant regional difference in cost effects (especially for animals)


Income effect


Income Effects (EU27)Zero Compliance Reference 2005 Compliance100pct

Agricultural Income [Mio €] 223219 217729 216503[% diff] -2,5% -3,0%

Premiums [Mio €] 34293 34284 34279Total Output Value [Mio €] 327671 327951 327931

[% diff] 0,1% 0,1%

Total Input Value [Mio €] 138745 144506 145707[% diff] 4,2% 5,0%

of which related to CC [Mio €] 5919 7183Crop Production Output [Mio €] 161460 161315 161259

[% diff] -0,1% -0,1%

Crop Production Input [Mio €] 40619 42835 43270[% diff] 5,5% 6,5%

of which related to CC [Mio €] 2359 2755Animal Production Output [Mio €] 166211 166636 166672

[% diff] 0,3% 0,3%

Animal Production Input [Mio €] 29555 33148 34022[% diff] 12,2% 15,1%

of which related to CC [Mio €] 3559 4428


Regional Income Effects


Regional Income Effects

• Agricultural Income decreases compared to a situation without regulation ( ~ -3%)

• No significant difference in income change between animal and crop sector

• Minor effect on income of additional compliance (baseline (+90%) to 100% compliance)

• Output value of animal products goes up with increasing cost

• (market effects can partially compensate)

• Output value of crops slightly decreasing (at most stable)


Production effect


Market effects for selected activities/products

Production Revenue CC Cost Price Supply Demand Net Trade[1000 ha or heads] [€ / ha or head] [€ / ha or head] [€ per ton] [Mio tion] [Mio tion] [Mio tion]

22501 589,24 13,9 98,62 127961 121780 60300,40% -3,03 -0,44% 1118 1032 8614044 451,67 13,2 98,62 61235 57908 33270,93% -3,66 -0,62% 887 822 644586 667,06 29,1 200,16 14194 14154 29

-1,13% 2,25 0,37% -288 -286 -12306 3362,24 46,7 122,65 62272 56572 5701

-0,45% 13,42 0,37% -584 -530 -5412294 23,2-1,87%25267 2018,12 45,8 280.53 143568 143568 0-0,02% 2,39 0.25% -10 -10 0239122 117,63 3,1 1302,23 21497 18575 2923-1,33% 2,28 2,01% -624 -566 -58

Dairy cows / Raw milk

Pig fattening / Pork

Selcted Indicators in 100% Compliance Scenario (2005) - absolut or relative diff. to Zero Compliance

Soft wheat

Barley

Rape seed

Potatoes

Fallow Land


Market effects for selected activities/products

Production Revenue CC Cost Price Supply Demand Net Trade[1000 ha or heads] [€ / ha or head] [€ / ha or head] [€ per ton] [Mio tion] [Mio tion] [Mio tion]

22501 589,24 13,9 98,62 127961 121780 60300,40% -3,03 -0,44% 1118 1032 8614044 451,67 13,2 98,62 61235 57908 33270,93% -3,66 -0,62% 887 822 644586 667,06 29,1 200,16 14194 14154 29

-1,13% 2,25 0,37% -288 -286 -12306 3362,24 46,7 122,65 62272 56572 5701

-0,45% 13,42 0,37% -584 -530 -5412294 23,2-1,87%25267 2018,12 45,8 280.53 143568 143568 0-0,02% 2,39 0.25% -10 -10 0239122 117,63 3,1 1302,23 21497 18575 2923-1,33% 2,28 2,01% -624 -566 -58

Dairy cows / Raw milk

Pig fattening / Pork

Selcted Indicators in 100% Compliance Scenario (2005) - absolut or relative diff. to Zero Compliance

Soft wheat

Barley

Rape seed

Potatoes

Fallow Land

Animals:

• Overall decrease in herds;

• Increasing prices almost compensate CC cost (… but not loss of production)

Crops:

• Cereal production increasing (“best alternative”);

• Cereal prices go down due decreasing (feed) demand and increasing acreage

• Additional cereal production is processed to bio fuels (at lower prices)

• “demanding” crops go down (costs can be partially compensated by price effects)

• Set aside and fallow land decrease (due GAEC enforcing minimum maintenance)


Environmental and biodiversity effects


Intensity effects


% Change in share of extensive & % Change in share of extensive & intensive livestock: intensive livestock: Compliance gap 0-Compliance gap 0-

100%100%


Extensive Intensive

-Increases in intensive livestock group mostly in regions in UK, central France, Spain,

Southern Italy, Greece, Bulgaria, Romania going together with loss of extensive group.

Cross Compliance Assessment ToolCross Compliance Assessment Tool

ExtensiveExtensive

MediumMedium

IntensiveIntensive

Compliance gap Compliance gap between between 0 and 100%0 and 100%Relative Relative differencesdifferences

Share of Share of land useland use

Cross Compliance Assessment ToolCross Compliance Assessment Tool

ExtensiveExtensive

MediumMedium

IntensiveIntensive

Compliance gap Compliance gap between between 0 and 100%0 and 100%Relative Relative differencesdifferences

Share of Share of land useland use

Landuse intensity Extensification in Mediterranean, Scandinavian and Eastern countries vs. Intensification in Central European countries.


Environmental effects:changes in emissions


Comparison scenarios

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%NH3 emission N2O emission N balance N leaching P balance

% change 2005 vs zero compl.

% change full versus zero compl.


NO3 concentration groundwater

% diff. baselinevs 0-compl.

baseline


N2O emission% diff. baseline

vs 0-compl.baseline


Critical N load exceedanceExceedance CL

baseline% diff. baseline

vs 0-compl.


Soil organic carbon stocksbaseline abs diff. baseline

vs 0-compl.


Main conclusion on emissions

• Changes in agricultural emissions due to cross compliance obligations range between 1%-6% (0-100% compliance)

• Largest decrease in N-leaching • Nitrate Directive clearly improved environmental quality • Balanced fertilization can significantly reduce N

emissions• Overall regional effects are positive with some

exceptions for certain regions (e.g. Poland, Bulgaria, Romania) and Mediterranean (Alpes-Mediteranee) for different emissions.


Overall initial conclusionsand recommendations


Overall initial conclusions (1)

• Overall effects of cross compliance obligations are larger in economic than in environmental and biodiversity terms. However, clear regional diversity.

• Effects of additional compliance (gap-closure between baseline and 100% compliance) are limited as baseline compliance is already high (average at 90%).

• Potential effectiveness of CC standards on biodiversity and landscape generally very positive but very strong regional variation due to large differences in implementation at national and regional levels (both for SMRs and GAECs)


Overall initial conclusions (2)

• CC Cost are almost not compensated by market effects

• Divergent effects in crop and animal sectors: – Crops: Production and prices rather constant.– Animals: Production decreases and prices go up – Livestock intensity: In selection of regions increase in intensive livestock

group – Land use intensity: Extensification in Mediterranean, Scandinavian and

Eastern countries vs. Intensification in Central European countries– In most regions limited but positive changes in agricultural emissions.

However, a selection of regions experience negative environmental externalities: Soil C (Poland, Southern Portugal), Ammonia (Poland, Bulgaria, Romania, Alpes-Mediterannée).


Recommendations

• Public service payments might need to be targeted more strongly to livestock sectors (also in the light of important positive and negative externalities to environment by these sectors)

• More and/or stricter measures (e.g. balanced fertilization) can further enhance GHG and N-leaching mitigation as long as they do not involve significantly higher cost levels. Otherwise contrary effect may be sorted through production increase response.

• Further studies needed on:– Changes in permanent grassland area and management in wider

context then Cross Compliance (Bioenergy targets)– Improved compliance data and compliance costs (tool allows for

adjustment in scenario specifications).• CCAT tool can easily be adapted to assess:

– Climate policy options (climate proof GAEC's)– Public services and their potential effects


END of Plenary presentation


Follow-up CCAT

- Present CCAT tool: is publicly available (May 2010) and enables: - Viewing all stored data + results- Adding new scenarios: editing implementation,

compliance levels, costs (some training required)

- More complex changes (complex scenarios, model adaptations, new indicators, new applications):- JRC who becomes user of system- Framework contract with DG-AGRI/DG-ENV- New EC tender (direct or via FP7)

Documents

Demonstration, Contents and Results End User Meeting 30 March 2010