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The CAP reform process in perspective: issues of the post-2013 debate. Tassos Haniotis, Director Directorate for Economic Analysis, Perspectives and Evaluations DG for Agriculture and Rural Development European Commission. The long-term CAP perspective. The general context of the CAP debate - PowerPoint PPT Presentation
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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, May 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
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Wheat Barley Maize Beef Pork Poultry SMP Butter Cheese Sugar
Production as % of consumption
Net production surplus: 1990/1994 avg Net production surplus: 2005/2009 avg
Sources: European Commission – Eurostat and DG Agriculture and Rural Development
T. Haniotis CAP perspectives 14
Recent trends in some commodity market pricesRecent trends in some commodity market prices
Sources: European Commission - DG Agriculture and Rural Development and World Bank
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
T. Haniotis CAP perspectives 15
Long-term price evolution along the food supply chainLong-term price evolution along the food supply chain
90
100
110
120
130
140
2000
Q01
2000
Q02
2000
Q03
2000
Q04
2001
Q01
2001
Q02
2001
Q03
2001
Q04
2002
Q01
2002
Q02
2002
Q03
2002
Q04
2003
Q01
2003
Q02
2003
Q03
2003
Q04
2004
Q01
2004
Q02
2004
Q03
2004
Q04
2005
Q01
2005
Q02
2005
Q03
2005
Q04
2006
Q01
2006
Q02
2006
Q03
2006
Q04
2007
Q01
2007
Q02
2007
Q03
2007
Q04
2008
Q01
2008
Q02
2008
Q03
2008
Q04
2009
Q01
Source: European Commission – DG Economic and Financial Affairs, based on Eurostat and Agriview data
Agriculturalcommodity prices
Food producer prices
Food consumer prices
Overall inflation(HICP)
T. Haniotis CAP perspectives 16
Direct payments per ha eligible area Direct payments per ha eligible area (excl. Malta*)(excl. Malta*)
0
50
100
150
200
250
300
350
400
450
500
Bel
gium
Bul
garia
Cze
ch R
epub
lic
Den
mar
k
Ger
man
y
Est
onia
Irel
and
Gre
ece
Spa
in
Fra
nce
Ital
y
Cyp
rus
Latv
ia
Lith
uani
a
Luxe
mbo
urg
Hun
gary
Net
herla
nds
Aus
tria
Pol
and
Por
tuga
l
Rom
ania
Slo
veni
a
Slo
vaki
a
Fin
land
Sw
eden
Uni
ted
Kin
gdom
EUR/ha elig. area
DP net ceilings fully phased in EU-27 average EU-15 average EU-12 average
*Malta: 801.7 EUR/ha
T. Haniotis CAP perspectives 17
Share of DP and total subsidies in agricultural income Share of DP and total subsidies in agricultural income
Source: European Commission – DG Agriculture and Rural Development
EU-15 EU-12
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
T. Haniotis CAP perspectives 18
( 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 19
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
T. Haniotis CAP perspectives 20
The three 2007-2013 RD thematic axes in the MSThe three 2007-2013 RD thematic axes in the MS
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aus
tria
Bel
gium
Bul
gari
a
Cyp
rus
Cze
ch R
epub
lic
Den
mar
k
Est
onia
Fin
land
Fra
nce
Ger
man
y
Gre
ece
Hun
gary
Irel
and
Ital
y
Lat
via
Lit
huan
ia
Lux
embo
urg
Mal
ta
Net
herl
ands
Pol
and
Por
tuga
l
Rom
ania
Slo
vaki
a
Slo
veni
a
Spa
in
Sw
eden
Uni
ted
Kin
gdom
EU
-27
EU
-15
EU
-12
Axis 1: Competitiveness Axis 2: Environment and land management Axis 3: Quality of life and diversification
Source: European Commission - DG Agriculture and Rural Development