Agriculture and Rural Development EPAs and CAP Reform: a chance for innovative approaches to global food security Brussels, Dr Klaus-Dieter BORCHARDT Director DG Agriculture and Rural Development European Commission

2 Presentation outline 1.CAP reform process and food security 2.EU and the global food security debate 3.EU trade with developing countries 4.Economic Partnership Agreements

3 1. CAP reform process and food security The CAP today: Fundamentally restructured: almost all payments are decoupled from production – they no longer encourage overproduction or distort trade Role of market intervention mechanisms is reduced to safety net level Export refunds in a decreasing trend for decades

4 CAP Pillar I evolution of expenditure type

5 The path of CAP expenditure Source: DG Agriculture and Rural Development. EU-10EU-12EU-15EU-25EU-27

6 The CAP beyond 2013 Food security is among the strategic aims of the CAP Enhanced competitiveness and improved sustainability through research, innovation and knowledge transfer Improved targeting of financial resources in a context of financial and economic budget constraints Further move away from trade-distorting support: -Decoupled income support and rural development support (WTO green box payments) have no, or at most minimal, trade-distorting effects -Export subsidies reduced to minimal level – potential for abolition in DDA -Abolition of production limiting measures

7 Policy Coherence for Development (PCD) PCD means that the EU needs to pursue its objectives avoiding negative spillover effects that might harm the development prospects. Adopted by Commission 2005; integrated in Lisbon treaty Food Security as a top challenge (amongst five) for under PCD. PCD is factored into CAP reform:  Consultation  Impact Assessment provisions on Developing Countries (Annex 12)

8 2. EU and the global food security debate Global challenges: food security, price volatility, economic crisis, speculation and fund management, climate change, expansion of biofuels, investments in land, governance, etc. African Union role: CAADP (Comprehensive African Agriculture Development Programme) aim: 10% Government spending on agriculture to attain 6% growth Supported under the Joint Africa-EU Strategy: 2012 renewed focus on agricultural cooperation International leadership: FAO, CFS, Rio+20 and G8/G20

9 G20 and G8 In 2011… G20 Action Plan on Food Price Volatility and Agriculture  Increased agricultural production and productivity  Agricultural Market Information System (AMIS)  International Policy Coordination: removal of food export restrictions  Risk Management  Improved functioning of agricultural commodity derivatives markets In 2012… G8 New Alliance for Food Security and Nutrition  mobilise private investment in food security in Africa;  scale-up innovation and research as a driver for increasing productivity and post-harvest handling;  improve risk management.

10 3. EU trade with developing countries EU is the most open market in the world for developing country exports: World imports from developing countries (mio EUR)

11 ACP agricultural trade

12 African ACP states agricultural exports

13 Preferential trade relations with developing countries Trade, growth and development Communication (2012): Trade-led growth central to modern development agenda Increased focus on countries most in need Non-tariff issues (standards, services, IPR, public procurement) can make a difference Importance of private schemes (fair, ethical or organic labelling) to help smallholders differentiate their output and to foster sustainable, inclusive growth Revision of the EU General System of Preferences (2012): Currently trade preferences for 176 developing countries New GSP Regulation will apply from 2014:  Country coverage: removal of upper-middle income countries (e.g. emerging economies), high-income countries and FTA partners.  Product coverage: two agricultural tariff lines included (Fresh cut carnations and buds and Sun cured oriental type tobacco.  Duration: limited to 10 years from the date of application of the tariff preferences.

14 4. Economic Partnership Agreements EPA agreements prioritise development, regional trade and gradual integration into the world economy:  Opening of 100% EU market Duty Free / Quota Free (except for South Africa given its high level of competitiveness)  Opening of ACP markets in goods slowly and progressively: years  No undue competition – through the asymmetry principle, ACP countries can to keep permanently tariff/quota protection for the most sensitive 20% of goods, often in agriculture  Safeguard measures to protect food security and agriculture in the events of disturbance by imports  Cooperation in agricultural policy and development

15 Concluding remarks CAP beyond 2013 consolidating the market orientation of past reforms Policy Coherence for Development and food security policy drivers Major EU participation in global food security, in G8/G20 and partnership with AU EPAs are the vehicles for trade development and EU partnership with ACP countries

16 Further information International Aspects of Agriculture meetings and document The CAP after Thank you for your attention Dr Klaus-Dieter BORCHARDT Director DG Agriculture and Rural Development