1. The future of the CAP: issues of the post-2013 debate
Conference on the future of the CAP – 28 May 2009 – Tartu (Estonia)
García Azcárate Tomás
DG for Agriculture and Rural Development European Commission

2. 1. The CAP today 2. The CAP until 2013 3. The CAP beyond 2013
To discuss the future of CAP post Health check it is important to look at:
First, the path and the progress that the CAP had since its beginnings till today.
Second, how the CAP will look like from now since the recently approved Health Check process till 2013.
And finally, what issues are at stake for the period beyond 2013.
Conference on the future of the CAP – Tartu (Estonia) May 2010

3. 1. The CAP today A substantially reformed policy …
Farm support is mainly decoupled and subject to cross-compliance
Role of market intervention mechanisms is significantly reduced to safety net level
Rural Development policy is strengthened with funds and policy instruments
Since 1992, the CAP changed radically in response to pressures from European society and its evolving economy.
Direct support was introduced to compensate farmers from the reduction of the old price support mechanisms. The 2003/2004 and later reforms introduced decoupled direct payments via the Single Payment Scheme (SPS).
Producer support is now to a large extent decoupled from production decisions (allowing EU farmers to make their choices in response to market signals) and is now dependent on the respect of standards relating to the environment, food safety and quality and animal welfare (cross compliance and good agricultural conditions).
The role of old market mechanisms (import tariffs, intervention price and export restitutions) of price support with higher EU prices than world prices was strongly reduced.
Rural Development was reinforced with more funds and measures (e.g 2003 reform introduced compulsory modulation transferring funds from Pillar 1 to Pillar 2, new set of measures and specific single fund).
Conference on the future of the CAP – Tartu (Estonia) May 2010

4. CAP expenditure and CAP reform path (2007 constant prices)
EU-10
EU-12
EU-15
EU-25
EU-27
Sources: European Commission - DG Agriculture and Rural Development (Units I.1/L.1) and DG Economic and Financial Affairs (AMECO database)
Updated:
Annual expenditure, in 2007 constant prices.
This graphic shows how the CAP has evolved through the evolution of the CAP expenditure.
In the 80s the expenditure was mainly due to price support through market mechanisms (intervention and export subsidies).
In the end of the 80s this expenditure in market mechanisms boosts due to the agricultural surpluses.
In 1992 there is the first big shift, due to the Mac Sharry reform. The market mechanisms (in red and yellow) are reduced and replaced by direct payments (in blue). These payments were paid per hectare or per animal. Thus price support is replaced by producer support. Finally, spending on Rural Development measures also increase (in purple).
In 2003, one can see the impacts of the 2003 reform, with direct payments shifting to decoupled payments (green). Payments are no longer paid per ha or per animal but paid in function of what the farmer received in a reference period. Spending in rural development also increases.
Spending as been stabilized and despite the successive enlargements, the overall spending as a share of the GDP has actually decreased in nominal terms: 0.5% of GDP in the 80s to 0.4% now (graphic line).
Stable expenditure level since mid-1990s despite enlargements
Significant shift from market expenditure to direct payments and increased expenditure for rural development
Decreasing share of CAP in GDP. However, slightly increasing in 2009 due to economic crisis (-5% in GDP of EU-27)
Source: European Commission – DG Agriculture and Rural Development
Conference on the future of the CAP – Tartu (Estonia) May 2010

5. … and alternative views on its cost
CAP cost in 2008
(in absolute terms)
CAP cost in 2008
(in relative terms)
44% of EU budget
0.43% of
EU GDP
Sources: European Commission - DG Agriculture and Rural Development (Unit I.1)
Eurostat
Updated: 2009
CAP expenditure and EU budget data are commitments appropriations for the year in the Financial Framework
And there are different forms of looking at CAP costs:
Many argue that CAP is to costly, stating that it represents 44% of EU budget (graph on the left) (it was 52.8% in 2000). Where they forget that there are few policies which are exclusively paid by the EU budget (such as regional and cohesion funds). All the other policies are national policies. Because of this, evaluating the cost of the CAP by the share of EU budget is misleading.
An alternative way of looking at the CAP cost is by the share on GDP compared with the share of the total public expenditure: the CAP represents 0.43% of the EU GDP, but all EU public expenditure represents 46.8% of the EU GDP (in blue). (2nd graph).
Source: European Commission – DG Agriculture and Rural Development
Conference on the future of the CAP – Tartu (Estonia) May 2010

6. 1. The CAP today A substantially reformed policy …
Farm support is mainly decoupled and subject to cross-compliance
Role of market intervention mechanisms is significantly reduced to safety net level
Rural Development policy is strengthened with funds and policy instruments
… and better performing
Surpluses belong to the past
Competitiveness is improved
Better value for money and contribution to EU budget stability
More sustainable farming
As a result, CAP reforms (1992, 2000, 2003) delivered what was expected from it by shifting away from product support.
EU moved away from the surplus problems of the past.
EU support prices, reduced everywhere, are now closer to world markets.
The competitiveness of EU agriculture is increasing in key sectors. Despite the EU share in most commodity markets is declining, the EU is already the largest agricultural exporter, of mainly high value products (in 2008, 67% of exports were final products and only 10% were commodities). It is also the biggest agricultural importer in the world, remaining by far the largest market for developing countries.
Society gets better value for money from the CAP, as support is transferred to farmers given in a more efficient manner through decoupling.
The CAP increasingly contributes to heading off the risks of environmental degradation and to delivering many of the public goods that our societies expect. The gradual but steady shift of arable crop practices towards lower till and winter cover, or the decrease in EU livestock numbers while grassland area remained stable, are examples of the CAP's positive contribution to fighting climate change. In addition to that EU agriculture has reduced its emissions by 20% in the period , a percentage that is high above the 8% average reduction provided by other sectors, and projected to decrease further, by 2 % by 2010.
Conference on the future of the CAP – Tartu (Estonia) May 2010

7. Reductions in EU price support, bringing EU prices in line with world prices
Source: European Commission – DG Agriculture and Rural Development (Unit L.1, based on Agriview and Unit L.2 data)
Updated:
Source: European Commission – DG Agriculture and Rural Development
Conference on the future of the CAP – Tartu (Estonia) May 2010

8. Impact of CAP reforms on EU net production surplus
Sources: European Commission - DG Agriculture and Rural Development and Eurostat
OECD-FAO Agricultural outlook
USDA-PSD online
Fapri 2009 World Agricultural Outlook
Updated:
This graph illustrates how CAP reforms helped in decreasing the surpluses we had in the past.
In the years prior the 1992 reform (yellow) the surpluses are evident for most of the commodities. These decrease after the reform in 1992 whereby price support through market mechanisms was reduced. The case of beef is clear where EU passed from net exporter to net importer.
Currently (in blue) the surpluses and subsidised exports have strongly decreased.
This drop did not occur in pork and exported cheese which are not subsidised and therefore not so directly affected by the reforms.
Sources: European Commission - Eurostat, OECD-FAO, USDA and Fapri.
Conference on the future of the CAP – Tartu (Estonia) May 2010

9. The evolving role of EU support prices - wheat
Sources: European Commission - DG Agriculture and Rural Development (Agriview Market prices)
World Bank – Pink Sheets
Updated:
This graph illustrates how EU price support evolved to lower levels that in the past:
Intervention price in wheat (in green) has almost halved since the pre 1992 reform period and now (due to the effects of the 1992 reform and agenda 2000).
Since 92 reform the EU wheat intervention price is lower than EU market price (in red) and the US market price (in blue) which is representative of world prices.
EU intervention prices are not anymore determining EU market price and the bridge between EU prices and world prices is now narrower.
Sources: European Commission and World Bank
Conference on the future of the CAP – Tartu (Estonia) May 2010

10. 2. The CAP until 2013 “Health Check” – fine tuned the reform process
Direct aids
Further decoupling
MS allowed to move to flatter rates of support
New article “68”
Targeted measures to economic/environmental disadvantages in certain regions/sectors
Risk management measures
Market mechanisms
Increase milk quotas by 1% annually
Intervention streamlined and simplified
Rural development
“New challenges” (Climate change, bioenergy, water management, biodiversity, innovation, dairy)
Modulation increase
The Health Check continues the path of the reforms mentioned earlier. It fine-tunes the 2003 reform for the period and contributes to the discussion on the future priorities in the field of agriculture.
The HC addresses three main policy questions:
How to make the direct payment scheme more effective, efficient and simple?
The HC extends the decoupling of support (optional for suckler cow and sheep and goat premium to prevent negative impacts).
Introduces the possibility for MS to move towards flatter rate of SPS in each MS (some MS could want to move away from historical model – in the future it could be difficult to justify historical references.
Creates a new article 68 (replacing the old article 69), allowing MS to retain 10 percent of their national budget ceilings for direct payments for specific uses. MS may used it to help farmers producing milk, beef, goat and sheep meat and rice in disadvantaged regions or vulnerable types of farming; it may also be used to support risk management measures (such as insurance schemes for natural disasters and mutual funds for animal diseases); and countries operating the SAPS system will become eligible for the scheme which was not the case in the old article 69..
How to adapt market instruments to meet new market opportunities?
Increase of the milk quota will allow a “soft landing” for the dairy sector in 2015, when the quota system will come to an end
Market management tools are streamlined and updated, to be part of a “safety net” (e.g. tendering is introduced, quantitative ceilings set to zero for all coarse grains, durum and rice, pigmeat intervention is abolished)
How to respond to new and ongoing challenges?
Reinforce existing measures facing up new challenges such as climate change. To finance this, modulation is increased with a “progressive” element introduced.
Conference on the future of the CAP – Tartu (Estonia) May 2010

11. 3. The CAP beyond 2013 General context
Economic crisis
Volatility in production and prices
Food security, climate change, limited resources
NO Doubt: the future is on the markets, the markets are the future.
The discussions CAP after 2003 are conditioned by the general economic and environmental context and by the Institutional context.
The general context:
Economic crisis has put pressure on the demand and farm prices in one hand whilst reducing financial opportunities (e.g. credit) for farmers on the other hand. The issue will be how to address the crisis without putting into cause the long term strategy of the policy.
Farmers face the contradiction of in one hand being asked to produce more (needs for food security in a world growing population), whilst on the other hand having more challenges and restrictions due to the climate change, and more limited resources (energy and inputs).
Analysis indicates that the projected level of farm productivity and competitiveness in the EU will enable its farm sector to respond to the growing domestic demand and to continue to increase our exports of final (high value-added) products, while reducing our dependence on exports of commodities. But the simultaneous interaction of various factors (bad weather, biofuels, oil prices, speculation), led some to the conclusion that in the longer term we may face an emerging shortage of food; the term "food crisis" has almost generally replaced the notion of a "food price crisis" in the public debate.
The increased volatility in both production and price of agricultural products is increasing (graph).
Conference on the future of the CAP – Tartu (Estonia) May 2010

12. Recent trend of some commodity market prices
Volatility of agricultural market prices is increasing:
Since 2005, EU market prices are fluctuating more for the most part of agricultural commodities.
However, this variation would be bigger with world prices and in dollars.
Sources: European Commission - DG Agriculture and Rural Development (Agriview Market prices and Circa)
World Bank - Pink Sheets
Updated:
Since last year, the term "farm price crisis", and then "food crisis", has been used interchangeably to describe the dramatic increase, and then the dramatic decline of farm commodity prices. Rarely a day passes without some reference to price developments in commodity markets; clearly not just in agricultural commodities.
Some days prices will increase, others will see prices decline; yet regardless of the direction, it is the extent of variability in price movements that has been the main concern of farmers across the world.
Clearly, it is not the presence of price variability as such that is of concern. This has been a permanent feature of agricultural markets, driven by the simple fact that the discontinuous, weather-dependent farm production interacts with the continuous, daily demand for food.
What has been of concern is the magnitude that farm price variations have taken in recent years, and the fact that sometimes wide price swings seem to be linked more to parallel developments in all commodity markets than to the fundamentals of each individual market. As a result of this development, the signal that farmers receive about market direction becomes unclear, and often distorted, and hampers their capacity to respond.
Sources: European Commission and World Bank
Conference on the future of the CAP – Tartu (Estonia) May 2010

13. 3. The CAP beyond 2013 General context Institutional context
Economic crisis
Volatility in production and prices
Food security, climate change, limited resources
Institutional context
New European Parliament and Commission
Lisbon Treaty
WTO
New financial perspectives
New priorities for EU budget
Budget for CAP?
The institutional context:
New Parliament and new Commission. The design of a new CAP as from 2013 is a priority for the new Commission.
With Lisbon Treaty ratified, this means that co-decision process will apply in the CAP as well instead of the currently consultation process. This will mean longer decision times (1.5 to 2 years instead of half year). EP will also have a more important role.
Pressures for further trade globalisation will continue. The EU continues its commitment for successful WTO negotiations. The EU offer from 2005 continues to be valid.
Discussions on the post 2013 CAP will be linked to discussions on the next EU budget post The budget review will determine the new priorities for the EU budget and the level of EU financing. The recent public consultation on the budget review identified priority areas: climate change, environment, growth, Research and Development and energy independence. Agriculture was not considered a priority but was a hot topic. Obviously the money to be allocated to the CAP will be a key issue.
Based on this it is clear that it is too soon to define the post 2013 CAP.
The French and the Czech presidencies have already opened the debate on the future of direct payments. The Swedish presidency is focusing on Rural Development and Climate change. The Spanish presidency is focusing on market measures.
The current axis of the CAP will be the starting point for discussions (direct payments, market measures and rural development).
Finally, In procedural terms: there should be a Commission communication next year launching public consultation followed by legislative proposals and impact assessment. However, this process and its dates should be defined by the new Commission.
Conference on the future of the CAP – Tartu (Estonia) May 2010

14. 3. The CAP beyond 2013: the debate
1. Direct payments
We face a major income problem: EU 15 but also EU 12
Despite the relevance of the direct payments in the farm income
Redistribution within and among Member States
2. Market mechanisms
Safety net
Rebalancing the food chain
3. Rural development
Balance between competition, environmental and rural economy challenges
The 3rd axis of RD an integral part of the CAP reform?
The CAP will continue on its reform path towards more effectiveness and efficiency while adapting to new emerging such as climate change: towards an economically sustainable and competitive agricultural sector which provides public goods, contributes positively to climate change while offering job opportunities in rural areas
The fist question on the future of the CAP will be if we need a Policy (P), and if we need it to be Common (C)?
Scenar 2020 study shows that full liberalisation would mean a concentration of production in some areas with abandonment in more fragile places. Both leading to negative environmental impacts.
Decentralising CAP could affect: the functioning of internal market because of distortions of competition; losing synergies and positive externalities to environment and health, including climate change; pressure on MS public expenditures and lower enforcement of WTO rules.
What do we expect from EU agriculture
Ensure food security
Provide management for natural resources
Keep viable rural areas
Be competitive in a global market
Respond to climate change
Why do we need an agricultural policy
Face increasing volatile markets
Ensure provision of public goods
Keep sustainable rural environment
Why do we need a common policy
Provide EU value added
Keep common level playing field
Address trans-national objectives
The second question is if we want a policy, do we want to keep the current two pillar structure (direct payments and market measures -Pillar I- and Rural development policy -Pillar II-) or rather drastic changes?
The current two pillar CAP aims at responding to the public demand for a sustainable agriculture by enhancing the competitiveness, ensuring sufficient and secure food supply, preserving the environment and the countryside and facing new challenges such as climate change while providing a fair standard of living for the agriculture community.
The discussions in the Council showed a broad support by MS to keep the two pillar structure.
Conference on the future of the CAP – Tartu (Estonia) May 2010

15. Structural adjustment
Direct payments
Markets
Adjusted SPS
Safety net
Income
Price support/
Quotas reform
GAEC
Rural development
Axis 1
(structural
adjustment)
Axis 2
(environment)
Public goods
Structural adjustment
The big bubbles represent the main areas of the Policy (1st click):
Direct payments: the core element proving direct income support to farmers (1st pillar)
Markets: traditional market measures through a basic safety-net mechanism (namely private and public storage) to address strong market fluctuations to a level that does not influence the normal functioning of markets but reinforces a consistent food supply in Europe (1st pillar)
Rural development: separate and independent of the previous two areas it’s the main tool that offers flexibility to the MS to provide support for rural areas (2nd pillar)
Inside each bubble you can see the most important issues relating with those areas (2nd click):
In Direct payments, the adjusted SPS and GAEC.
In Markets, the current safety net (existing intervention mechanism already streamlined in the Health Check) and remaining quotas.
In Rural development, the 3 axis of the policy:
Axis 1- Structural adjustment- aimed at improving the competitiveness of the agricultural and forestry sectors by focusing on the priorities of knowledge transfer, modernisation and innovation in the food chain and priority sectors for investment in physical and human capital.
Axis 2- Environment- aimed at improving the environment and countryside, with measures contribute to three EU level priority areas: biodiversity and preservation of high nature value farming and forestry systems, water, and climate change.
Axis 3- Territory and diversification- improving the quality of life in rural areas and encouraging diversification. This to contribute to the overarching priority of the creation of employment opportunities in the fields of diversification and quality of life.
The links show how the policy tools are interconnected (3rd mouse click):
Income: direct payments and market measures provide income support to farmers
Structural adjustment: market measures through lower levels of support than in the past and less production restrictions force motivate structural adjustment. Rural Development provides tools to guide and support this structural adjustment.
Public goods: Basic income support through direct payments and cross compliance help farmers to maintain agricultural activities that provide the delivery of public goods (e.g. landscape, biodiversity, etc..). Rural Development allows MS to implement the best range of tools to target specific public goods.
Axis 3
(territory and
diversification)
Conference on the future of the CAP – Tartu (Estonia) May 2010

16. 3. The CAP beyond 2013: the debate
Direct payments
We face a major income problem: EU 15 but also EU 12
Despite the relevance of the direct payments in the farm income
Redistribution within and among Member States
In addition to “income stabilization”, do we focus in “public goods”?
What are “public goods”?
Do we link also direct payments with labour?
How do we avoid that direct payments are catch by landowners through an increase of renting prices?
If we keep the current two pillar structure, than the discussions will be around what to do with:
Direct payments:
The Health Check compromise commits the EU to examine the direct payment system and address the different levels payments between MS.
There is a discussion on if SPS should have a role on supporting farmers income or in compensating farmers for the provision of public goods. The overall orientation seems to move away from the link to past support levels towards more support linked to both the provision of basic income support and the delivery of the "basic" public goods. In any case the new targets should not compromise market orientation, simplification and WTO compatibility.
There is also a discussion regarding the difference of levels between MS and farmers which is difficult , revolving around the redistribution of funds among farmers within a MS or region (already elements in Health Check) and the redistribution between MS.
Elements for future direct payments:
Provide basic income support and public goods
Ensuring convergence of support across countries and sectors
Move away from historical base
Asses whether to provide some compensation for natural handicaps
Keep it simple, with low risk of errors and WTO compatibility
Conference on the future of the CAP – Tartu (Estonia) May 2010

17. Developments in agricultural income in the EU-15 (1993-2009), 1993=100
Conference on the future of the CAP – Tartu (Estonia) May 2010

18. Developments in agricultural income in the EU-12 (2000-2009), 2000 = 100
Conference on the future of the CAP – Tartu (Estonia) May 2010

19. Share of DP and total subsidies in agricultural income
EU-15
EU-12
Sources: European Commission - DG Agriculture and Rural Development, Unit L.2 – based on DG AGRI data for DP expenditure and Eurostat
Updated:
Source: European Commission – DG Agriculture and Rural Development
Conference on the future of the CAP – Tartu (Estonia) May 2010

20. Average payments per ha (UAA) and per beneficiary
Sources: European Commission - DG Agriculture and Rural Development (Unit I.1)
UAA – Eurostat, 2007 Farm Structure Survey
Beneficiaries in FY 2008 – DG Agriculture and Rural Development (2008 CATS Report)
Updated:
These amounts correspond to the gross ceilings foreseen in Reg. 73/2009 with phasing-in completed for EU-12, including the transfers from the wine enveloppe and the silkworms, after modulation and transfers in accordance with Decision 379/2009.
This graph shows the issue of different levels of direct payments between Member States.
The bars in blue show the average level of payment per hectare in each Member State in 2016 if we keep the current situation or status quo (2016 is considered to take into account the full phasing in of the new member states). This is a calculation obtained by dividing the total amount of direct payments by the agricultural utilized area in each MS. It provide us with the average level of payment per hectare in each MS. The difference between the MS reflect the historical references for the direct payments, firstly introduced in the 1992 reform, to compensate price reductions, and calculated in function of past production levels of each MS.
The black bars show the difference between the average direct payments in old MS (262 EUR/ha) and new MS (182 EUR/ha)
The orange line shows the level in which the EU flat rate (calculated by dividing the total amount of direct payments in the EU by the total amount of agricultural utilised area) all the amount would be set up to (with 100% of current overall budget). The MS with high levels of aid would lose (left) and the MS with low levels would win (right).
The bullets show an alternative calculation: average payments per beneficiary instead of hectare (it is not actually the hectares who get the money…). The case of Greece, that passes from the highest level of aid per hectare to one of the lowest per beneficiary, or Chec Republic in a opposite manner, shows how the payment level discussion can have different angles.
One could as well see other alternative conclusions: the average payments divided by the level of the country GDP. Here New Member states, like Latvia would have a higher level of aid…
Impacts of levelling direct payments:
In short, the levelling of direct payments across the EU can lead to important budgetary redistribution between Member States and regions. The extreme would be to introduce a EU wide flat rate across the EU, leading to big losers and winners.
This redistribution as important implications, beyond the budgetary ones:
It would lead to a big impact in land values: in the MS loosing, land values would be depressed while in the winning MS they would be inflated (with negative effects, in particular, in “loosing” MS where the debt to equity ratio of farms are already high);
There would big impact in farmer’s incomes. However, not necessarily in terms of distribution of support between farmers (as flat rate direct payments do not fundamentally affect the distribution of support between farms) because with a flat rate this is largely determined by the unequal distribution of land.
Source: European Commission - DG Agriculture and Rural Development
Conference on the future of the CAP – Tartu (Estonia) May 2010

21. 3. The CAP beyond 2013: the debate
Market mechanisms
Safety net to be maintained: clear Council statement
Rebalancing the food chain
2. Market mechanisms:
Health Check moved towards safety-net character of instruments, but there is a discussion on alternative tools.
On higher food prices and food security: should we expect a pressure on food production in the longer term, towards 2020? And if so, what policy responses should we give?
On risk management: currently in the CAP, public intervention is available for price risks, RD measures aim at mitigating natural disaster and climate risks, and training in risk-reduction strategies, while SPS and LFA provide an income stability element. Given the heterogeneity of risks and crises in the EU, these heterogeneous measures provide support to agriculture, while opening more and more to market signals and threats. We can look in the future on how to better address this form of support, but under the current/future budget limitations.
3. Rural development policy:
RD continues to be a independent pillar of the CAP. Through its multiannual programming structure this policy gives more flexibility to Member States for implementation. Addresses through the three axis of measures: 1. Challenges for the agricultural sector in rural areas in the light of the competitive pressure of an open global economy and more volatile agricultural markets. 2. Threats to the sustainability of natural resources including the possible consequences of the agricultural production potential, considering in particular the effects of climate change. 3. The socio-economic challenges linked to prospects for growth and jobs in rural areas.
For the future, the following questions are pertinent:
Should the balance between those three objectives, competition, environment and socio-economic, in the same balance as today?
Should axis 3 of RD policy ("Quality of life in the rural areas and diversification of the rural economy”) continue to be seen as an integral part of the CAP and an important tool in helping farmers and rural regions to adapt to CAP reform process? During the budget review public consultation, the issue of the complementarity of EU policies (RD and regional policy) was raised, and there were calls for transferring the RD policy to the Cohesion policy since it is claimed that the coexistence of the two policies leads to confusion and administrative overlap.
Conference on the future of the CAP – Tartu (Estonia) May 2010

22. Rebalancing the food chain I
Today, often the food chain is not adding value but destroying value
Every one is loosing, but those who loose more are the farmers, the weakest part of the chain.
I am not calling to a class fight between farmers, industries and retailers. You do not fight against your clients and providers.
“Win – win” strategies have to be promoted.
No “one fit all” solutions, as the draft report of the Milk high level group has shown.
Conference on the future of the CAP – Tartu (Estonia) May 2010

23. Rebalancing the food chain II
Competition policy applies to agriculture: it is a good news
Current rules allow more margin than many people foreseen for “working together” strategies
Transparency is welcome. Price observatories and codes of good conducts are useful and welcome
Exceptions for agriculture to some competitions rules are possible, but have to follow the 3 principles of transparency, proportionality and effectiveness
It is the way to rebuild a market income.
Conference on the future of the CAP – Tartu (Estonia) May 2010

24. 3. The CAP beyond 2013: the debate
Rural development
Balance between competition, environmental and rural economy challenges
The 3rd axis of RD an integral part of the CAP reform?
Conference on the future of the CAP – Tartu (Estonia) May 2010

25. The three 2007-2013 RD thematic axes in the MS
This slide shows how differently Member States allocate the funds to different objectives of our policy.
This underlines the fact that the Member States have programmed the EU contributions in view of their needs while taking EU priorities into account.
In the bottom part of the slide the average share for the three thematic axes for EU-27 is shown.
Source: European Commission - DG Agriculture and Rural Development, Unit G.3
Updated:
Source: European Commission – DG Agriculture and Rural Development
Conference on the future of the CAP – Tartu (Estonia) May 2010

26. 3. The CAP beyond 2013: the debate
Do we need the “C” and the “P” of the CAP?
Current structure (I and II pillar)?
Which budget for which CAP?
4. Financing
There are financing issues specific to the CAP itself: what balance between the three areas of the CAP (direct payments, market mechanisms and rural development)?
There is the on going possibility of introducing co-financing in the 1st pillar. Whereas on the Rural Development the co-financing of MS is adequate due to the level of descentralisation of these measures and the need for a corresponsability for the MS in managing the programmes. The same is not so evident for the possibility of introducing co-financing in the 1st pillar, where there are differences of opinions amongst the Member Sates. If on one hand, co-financing of 1st pillar could allow for savings for some MS, on the other hand it could raise important issues such as the renationalisation of policy and loss of financial solidarity.
Conference on the future of the CAP – Tartu (Estonia) May 2010

27. Post-2013 BUDGET ?? Markets Pillar I Direct payments Pillar II Rural
Sizes calculated with 2012 amounts = Full implementation of the Health Check
This slide puts upfront the budget questions:
what budget for the CAP after 2013?
the balance between the current areas and pillars of the CAP (the average distribution in the period taking account the HC in commitments is about 69 % for Direct payments, 7 % for markets, 24 % for RD in rounded figures)
Rural
Development
Modulation
Conference on the future of the CAP – Tartu (Estonia) May 2010

28. For further information
The CAP after 2013
EU agriculture and CAP reform
Economic Analysis and Evaluation
Agricultural Policy Analysis and Perspectives
Conference on the future of the CAP – Tartu (Estonia) May 2010

29. Thank you Join the debate at http://ec.europa.eu/cap-debate
Conference on the future of the CAP – Tartu (Estonia) May 2010