A tool for uniform classification and analyses of budgetary support to agriculture for the EU accession countries

Abstract

AbstractAllowing for the comparison of agricultural policies among countries and supporting the European integration process, a methodological tool was developed called the APM (Agri-Policy Measures tool). The tool enables the cross country qualitative and quantitative analysis of budgetary support to agriculture using uniform classification and systemization template primarily based on the current EU concept of the policy pillars. All agricultural policy measures are grounded on three main pillars: market and direct producer support measures, structural and rural development measures and general measures related to agriculture. Total budgetary support to agriculture should represent the sum of all transfers related to agriculture from all sources, but without administrative costs and transfers to non-agricultural sectors. The tool was applied for the analysis and comparison of agricultural policies in the Western Balkan countries and it proved to be useful for policy analysis in relation to the EU accession process.Keywords: agricultural policy, budgetary transfers, an assessment tool, Western Balkan, European Union enlargementJEL: Q181. IntroductionThe form, type and scope of budgetary transfers to agriculture, as well as their development over time, are important for agricultural policy analysis. A consistent and reliable policy measure database is the necessary foundation for effective agricultural policy-making based on a policy cycle. The main problem of quantitative analyses of budgetary transfers to agriculture is that a great variety of measures are applied by individual countries. One cannot obtain an overall picture based on the analysis of each individual measure; measures must be merged into larger groups with similar content. The merging of the measures can be done based on very different criteria which is often the case.Due to the differences in agricultural policy concept and measures, the European Union (EU) accession is a economic and political challenge for every acceding country. By the date of accession, a country needs to be prepared for the Common Agricultural Policy (CAP), its complex administration and instruments. After the accession, a new model of supports is introduced, which is usually significantly different from the existing policy in terms of the amount of support and the content of measures (Erjavec 2007). The efficient implementation of needed policy reforms requests a solid data base about the pre-accession agricultural policy measures in comparison with the CAP instruments.In the EU, the agricultural policy measures are grouped according to the policy field and the source of financing, which are both closely related to Common Agricultural Policy (CAP) regulations in a specific programming period. Taking into account the fund from which measures are financed, CAP is currently divided into two main pillars that are also recognized in the agricultural-economic literature (Gay et all, 2005). The first pillar is financed by the European Agricultural Guarantee Fund (EAGF) and consists of a series of measures relating mostly to interventions in agricultural markets and direct payments to farmers set down within the framework of a common organization of the markets and other market-related regulations, although some measures of a more general character can also be found here (veterinary and plant-health issues; promotion of agricultural products; issues related to genetic resources; agricultural accounting information systems - F ADN; agricultural survey systems; fisheries markets) (European Council, 2005). For the measures financed by EAGF, there is a uniform accounting classification (EC, 2009) which enables the monitoring of budgetary expenditures by sub-categories and measures.The second pillar is financed by the European Agricultural Fund for Rural Development (EAFRD) and consists of measures within the framework of rural development programs of the Member States implemented in the current programming period. …