An assessment of the regional impacts of post-2020 CAP budgetary cuts on production structures and agricultural incomes in the EU

Abstract

The European Commission (EC) will publish its post-2020 Multi-Annual Financial Framework (MFF) for the European Union (EU) before summer 2018. The EC sees the status quo as no option for the EU. In designing the new MFF, coherence and complementarity between the different programmes and instruments will be strengthened, and flexibility would be factored in to respond to the new challenges and unexpected developments. In consequence, the funding of the Common Agricultural Policy (CAP) is expected to decrease and have a lower share in the overall EU spending after 2020. This paper assesses the regional impacts of a hypothetical 30% and 15% cut in the EU CAP budget, supplemented by a BREXIT scenario (the United Kingdom (UK) being a net budgetary contributor), on both agricultural production structures and incomes in the EU. To this end, projections by the Common Agricultural Policy Regional Impact Analysis (CAPRI) simulation model were prepared, and shifts in agricultural production and changes in income distribution were briefly evaluated.