The CAP reform process in perspective: issues of the post-213 debate Tassos Haniotis Director - 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 The question about the "C" in the CAP The debate about the two pillar structure of the CAP The post HC context of he 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 New financial perspectives T. Haniotis The CAP reform process in perspective 2
In a nutshell, CAP policy questions... Income safety net Income Adjusted SPS Markets Direct payments Price support/ Quotas reform GAEC Axis 1 (structural adjustment) Axis 2 (environment) Rural development Axis 3 (territory and diversification) T. Haniotis The CAP reform process in perspective 3
and their budgetary relevance See CAP reform path Markets Direct payments Rural Development Modulation T. Haniotis The CAP reform process in perspective 4
Thank you T. Haniotis The CAP reform process in perspective 5
The evolving role of EU support prices - wheat 25 ( in per metric tonne ) 2 15 1 5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 EU intervention price EU common wheat market price US (SRW Gulf) T. Haniotis The CAP reform process in perspective 6
The evolving role of EU support prices - beef 35 ( in per metric tonne ) 3 25 2 15 1 5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 EU intervention price EU safety net EU market price Argentina T. Haniotis The CAP reform process in perspective 7
The evolving role of EU support prices - butter 35 ( in per metric tonne ) 3 25 2 15 1 5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 EU intervention price EU market price Oceania T. Haniotis The CAP reform process in perspective 8
The evolving role of EU support prices - SMP 35 ( in per metric tonne ) 3 25 2 15 1 5 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 EU intervention price EU market price Oceania T. Haniotis The CAP reform process in perspective 9
Impact of CAP reforms on EU net production surplus Net production surplus as % of consumption / Net exports as % of World exports 45% 4% 35% 3% 25% 2% 15% 1% 5% % -5% -1% -15% Wheat Barley Maize Beef Pork Poultry SMP Butter Cheese Sugar Net production surplus: 199/94 ol avg Net exports: 199/94 ol avg Net production surplus: 24/8 ol avg Net exports: 24/8 ol avg T. Haniotis The CAP reform process in perspective 1
Jan- May- Sep- Jan-1 May-1 Sep-1 Jan-2 May-2 Sep-2 Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Sep-5 Jan-6 May-6 Sep-6 Jan-7 May-7 Sep-7 Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Recent trend of some commodity market prices EUR/t for maize and fresh milk; EUR/1 kg for SMP and beef 4 35 3 25 2 15 1 5 Crude oil, EUR/bbl 2 175 15 125 1 75 5 25 Maize, US, Gulf Fresh milk, EU SMP, EU Crude oil, avg spot price T. Haniotis The CAP reform process in perspective 11
Jan- May- Sep- Jan-1 May-1 Sep-1 Jan-2 May-2 Sep-2 Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Sep-5 Jan-6 May-6 Sep-6 Jan-7 May-7 Sep-7 Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Recent trend of some commodity market prices USD/t for maize; EUR/t for fresh milk; EUR/1 kg for SMP and beef 4 35 3 25 2 15 1 5 Crude oil, USD/bbl 2 175 15 125 1 75 5 25 Maize, US, Gulf Fresh milk, EU SMP, EU Crude oil, avg spot price T. Haniotis The CAP reform process in perspective 12
Greece Malta Netherlands Belgium Denmark Cyprus Germany Italy Ireland Hungary France Slovenia EU-15 Luxemburg EU-27 Czech Republic Finland Sweden United Kingdom Austria Spain Slovakia Poland EU-12 Portugal Bulgaria Lithuania Romania Estonia Latvia Average direct payments EUR/ha 6 EUR/ben. 48 5 4 4 32 3 2 24 16 1 8 Status quo in 216 (EUR/ha) EU flat rate (EUR/ha) Status quo in 216 (EUR/beneficiary) T. Haniotis The CAP reform process in perspective 13
The relative weight of agricultural income Entrepreneurial income/awu in agriculture as % of wages in total economy/awu 1% 9% 8% 7% 6% 5% 4% 3% 2% 2 21 22 23 24 25 26 27 28 EU-27 EU-15 EU-12 T. Haniotis The CAP reform process in perspective 14
198 1981 1982 1983 1984 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 The paths of CAP reforms and expenditure 7 6 billion % GDP EU-1 EU-12 EU-15 EU-25 EU-27.7%.6% 5.5% 4.4% 3.3% 2.2% 1.1%.% Export subsidies Market support Direct aids Decoupled payments Rural development % of EU GDP T. Haniotis The CAP reform process in perspective 15
alternative views on the CAP cost 12 CAP cost in 28 (in absolute terms) 5% CAP cost in 28 (in relative terms) 1 8 45.9% of EU budget 4% 3% 6 4 2%.43% of EU GDP 2 1% Billion of euros % % of GDP CAP expenditure EU budget CAP expenditure All EU public expenditure T. Haniotis The CAP reform process in perspective 16
and its contribution to budgetary discipline 6% ( % share of GDP ).6% 55%.55% 5%.5% 45%.45% 4%.4% 35%.35% 3% 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28.3% % of public expenditure in EU GDP (left axis) % of CAP expenditure in EU GDP (right axis) T. Haniotis The CAP reform process in perspective 17