What future for the CAP?

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Two very different visions of the CAP post-2013 have landed on my desk in recent days - one from a consortium of leading agricultural economists and one from the soon-to-be-replaced agriculture commissioner Mariann Fischer Boel.

The first was actually published a couple of weeks ago on a new website called Reform the CAP It takes the form of a joint declaration signed by 23 eminent economists, including my old lecturer from Reading University, Alan Swinbank.

slovakia cows.JPGAs might be expected, it contains some pretty radical suggestions. In particular, they argue that the first pillar of the CAP - single farm payments and market intervention - should be abolished. These payments have been unbalanced and have not benefited rural development or the environment, they argue. Market supports also continue to hurt the EU's trading partners, so get rid of them too!

The declaration also calls for a thorough reassessment of all second pillar measures. "Only those policies that promote genuine European public goods and avoid excessive payments should be retained," it says...

The economists suggest well functioning markets rather than state intervention are the best way of developing a competitive farm sector. And they say food security can be best achieved by giving poor people more social welfare cash rather than giving farmers subsidies.

Furthermore, they say any public funding for agriculture should only be used to fight climate change and provide biodiversity. And there should be more national rather than EU control over how this money is spent.

Needless to say, Mrs Fischer Boel's vision is somewhat less radical, though even she seems to be throwing caution to the wind a bit, given that she only has a few more weeks in office.

Presenting her ideas to Swedish farmers this week, she maintained that there was still a place for Pillar 1 as well as Pillar 2 supports, though she would like to see a more even distribution of funds than the current 80:20 split. This should be set out in the next EU budget rather than rely on modulation.

The single farm payment will continue to be a crucial instrument, she argued, providing a straightforward mechanism for keeping farmers viable and keeping them on the land.

But the way it is paid will need to change, and here she suggested a new base rate area payment for the whole of Europe, with top-ups to reflect local economic or environmental conditions. Certainly, any link with historic subsidy receipts should be broken.

Export subsidies will go as part of the WTO talks, she added, but intervention may still be available, though through tendering rather than fixed prices. Developing futures markets was another way of living with price volatility, she said.

Above all, Mrs Fischer Boel stressed the need for a sufficient budget to reflect the importance of agriculture in producing food, while delivering other landscape and climate change benefits.

The debate on the next round of CAP reform is clearly gathering momentum. Mrs Fischer Boel will have long departed by the time final deals are struck late in 2012. But I wouldn't mind betting at this early stage that the final outcome will be a lot closer to her vision than that of those eminent agricultural economists.

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About this Entry

This page contains a single entry by Philip Clarke published on November 26, 2009 1:03 PM.

Internet solutions for the modern dairy farmer was the previous entry in this blog.

Peas and beans still a safe bet is the next entry in this blog.

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