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CLITRAVI 50th Annual General Assembly, Portoroz, Slovenia, 8 May 2008 Lars Hoelgaard, Deputy Director-General EU Agriculture in a globalised context.

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Presentation on theme: "CLITRAVI 50th Annual General Assembly, Portoroz, Slovenia, 8 May 2008 Lars Hoelgaard, Deputy Director-General EU Agriculture in a globalised context."— Presentation transcript:

1 CLITRAVI 50th Annual General Assembly, Portoroz, Slovenia, 8 May 2008 Lars Hoelgaard, Deputy Director-General EU Agriculture in a globalised context

2 Portoroz, Slovenia, 8 May Before Now Ahead?

3 Portoroz, Slovenia, 8 May Before – Good old days Stable framework Intervention prices Tariffs Export refunds Intervention stocks Surplus – minimum/maximum prices Monetary compensatory amounts – green rates/accession compensatory amounts

4 Portoroz, Slovenia, 8 May Disappearance of public stocks Composition of public stocks in the EU (mio t), Butter, SMP, beef – same picture

5 Portoroz, Slovenia, 8 May Now – volatility - EU-related CAP-reform – market orientation Real Filet de sécurité Direct payments – income security – but price volatility Exchange rate US-dollar/Euro

6 Portoroz, Slovenia, 8 May Volatility - global Energy crisis – 120$/barrel Global warming Bio energy - EU: –Renewables – 20% –Bio fuels – 10% Others Demand for raw materials Food/feed/energy/industrial Renewables - environment

7 Portoroz, Slovenia, 8 May Slightly expanding cereal markets and emerging bioethanol markets…. Development of cereal markets in the EU, (mio t)

8 Portoroz, Slovenia, 8 May Food crisis? – or price adjustment to real cost of production Energy cost of production Environment – water cost of production Global warming – renewables CO² - cost of production

9 Portoroz, Slovenia, 8 May Demand driven Bio ethanol – maize – US – Iraq - war Odd man out – sugarcane and bio ethanol – Brazil Emerging economies Chinda (China/India) etc. - Diet patterns Population growth – 9 billion in 2050 Hedge funds – Soros – add to speculation – gold/oil

10 Portoroz, Slovenia, 8 May Opportunities/supply Africa potential – high prices good or bad? GMOs – productivity and environment US-dollar – reserve currency – imbalances Deficit in federal budget (Iraq war) Deficit in trade balance (China) Low interest rates house prices inflated consumption subprime

11 Portoroz, Slovenia, 8 May WTO Lower tariffs No refunds 2013 Market outlook

12 Portoroz, Slovenia, 8 May EU to remain net importer of beef EU production, consumption, trade and intervention stocks (mio t c.w.e.)

13 Portoroz, Slovenia, 8 May Growth rates for pig meat production and consumption are expected to be lower than in the 90s EU production, consumption and trade (mio t c.w.e.)

14 Portoroz, Slovenia, 8 May Meat Beef production to continue falling below consumption throughout the projection period due to: –Declining cattle herd from dairy sector –Impact of decoupling of direct payments Pig meat production expected to keep its slight growth thanks to: –Solid demand both in the EU-15 and in the EU-12 –Exports to decline slightly due to greater competition from low cost exporters, imports to remain at low level Poultry meat demand to grow faster than production, leading to EU becoming net importer of poultry meat EU sheep/goat meat production to continue its declining trend

15 Portoroz, Slovenia, 8 May Imports from developing countries (2005)

16 Portoroz, Slovenia, 8 May Health check (HC) – how does this fit? Further decoupling Modulation Balance Pillar I and Pillar II More market orientation Article 68 (old 69) LFAs New challenges

17 Portoroz, Slovenia, 8 May CAP expenditure and CAP reform path EU-10EU-12EU-15EU-25

18 Portoroz, Slovenia, 8 May Challenges Demand is there Can Europe keep pace? RD + innovation Reinvent yourselves – value added Competition – more, not less

19 Portoroz, Slovenia, 8 May Conclusion - ahead More volatility More market Risk management Instruments – hedging – futures Locking in prices But public intervention still necessary – market does not solve all Future CAP post 2013?


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