Common Agricultural Policy Reform Research Articles

The effect of single farm payments on less favoured areas agriculture in Scotland: a CGE analysis

This study quantifies impacts of common agricultural policy reform on farming in Less Favoured Areas (LFAs) in Scotland. LFAs are characterised by low agricultural productivity, because of unfavourable natural conditions, which allow only extensive farming systems such as cattle and sheep rearing. The differential impacts of the single farm payment on LFA farming is examined using a CGE modeling framework that accounts for inter-sectoral linkage effects. The simulation results indicate that the policy reform has considerably larger adverse effects on LFA farms than non-LFA farms and emphasize the need to consider spatially differential impacts in further adjustments to policy reforms taking into account local circumstances.;

Abatement costs for agricultural nitrogen and phosphorus loads: a case study of crop farming in south-western Finland

Designing efficient agri-environmental policies for agricultural nutrient load reductions calls for information on the costs of emission reduction measures. This study develops an empirical framework for estimating abatement costs for nutrient loading from agricultural land. Nitrogen abatement costs and the phosphorus load reductions associated with nitrogen abatement are derived for crop farming in south-western Finland. The model is used to evaluate the effect of the Common Agricultural Policy reform currently underway on nutrient abatement costs. Results indicate that an efficiently designed policy aimed at a 50% reduction in agricultural nitrogen load would cost € 48 to € 35 million, or € 3756 to € 2752 per farm.;

Impact of a gradual increase in milk quotas on the EU dairy sector

The European Union (EU) dairy sector is facing significant changes due to EU enlargement, the Luxembourg reform and ongoing World Trade Organisation (WTO) negotiations. This paper explores the impact of alternative dairy policies in the context of a WTO agreement and further dairy policy adjustments. In particular, it analyses the impact of gradual but significant increases in EU milk quota and discusses the implications of different changes in the allocation of milk quotas. These scenarios are compared with the status quo as decided in the Common Agricultural Policy reform of 2003. We find that, by 2014?2015, the market effects of abolishing quota are similar to those of a 2 per cent gradual quota increase starting in 2009

STAKEHOLDERS AND PERSPECTIVISM IN QUALITATIVE POLICY EVALUATION: A REALIST REFLECTION

This paper examines the epistemological bases for the inclusion of stakeholders in policy research. While it concedes that the input of stakeholders provides essential expert and experiential knowledge for the understanding of complex policies and programmes, it contends that the approach which assumes that all interpretations of policy including those of stakeholders should be afforded equal validity, which we term relativist perspectivism, undermines the possibility of robust research by allowing power to replace methodological rigour as the primary research dynamic. It is noted that this problem tends to be more acute when the research is qualitative. A study into the gendered effects of Common Agricultural Policy reforms is used as an illustrative example of how research can be compromised by relativist perspectivism. It is argued that realist research methodologies uniquely provide the capacity to maintain epistemological robustness, while also being able to take due account of the perspectives of stakeholders.

Modeling beef supply response and price volatility under CAP reforms: The case of Greece

Abstract This study examines the supply response of the Greek beef market and the possible effect of the European Union’s Common Agricultural Policy (CAP) on the Greek beef sector during the period 1993–2005. A Generalized Autoregressive Conditional Heteroskedasticity (GARCH) process is used to estimate expected price, and price volatility, while several different symmetric, asymmetric and non-linear GARCH models are estimated. The empirical results show that price volatility and feed price are important risk factors in the supply response function, while the negative asymmetric price volatility that was detected implies that producers have a weak market position. Furthermore, the empirical findings confirm that the annual premium paid by the EU to beef producers had a positive impact on the production level and also, the change of the EU price support regime, after 2006, is having negative effects on beef production level in Greece.

Implications of CAP reform for land management and runoff control in England and Wales

WTO negotiations, as well as problems associated with intensive agriculture, such as overproduction, dependency on high levels of subsidies, diffuse pollution, soil degradation and loss of wildlife, have led to a reconsideration of agricultural policies in Europe. In April 2005, the new common agricultural policy (CAP)-reform came into force in the United Kingdom, decoupling financial support to farmers from agricultural production. Farm income support payments are now linked to compliance with standards (cross-compliance rules) which protect the environment, animal health and welfare. In the light of these policy changes, semi-structured interviews were carried out with 36 farmers in five catchments in the UK to explore interrelationships between CAP-reform, agricultural land management and runoff-related problems. Results from three catchments are specifically highlighted because of their relevance for soil policy. The CAP-reform appears to facilitate and accelerate changes in the agricultural sector that were already happening. It is likely that upland livestock farms will extensify further, which will reduce environmental burdens such as diffuse pollution, soil compaction and runoff. The uptake of agri-environment schemes by individual farmers has increased since the CAP-reform. However, additional impacts are limited as there is a tendency among participants to enter these schemes based on existing features and practices. Although most farmers interviewed for this study appear to recognise the need to reduce soil erosion and diffuse pollution, they are less convinced they should be held responsible for controlling storm-water runoff from farmland that might contribute to flooding downstream. However, there are opportunities to achieve several objectives simultaneously, including improved soil management, runoff control and reduced pollution. Lessons can be learned from farmers’ opinions about CAP-reform, from successful interventions that aimed to reduce soil erosion and diffuse pollution, and also from failures. Recommendations are made for improvements to the current agri-environment schemes and to promote land management practices with less environmental burden.

The Distribution Effect of Support System of the CAP on Producers in the Light of the Turkey's EU Membership

The objective of this study is to measure the level of the European Union's (EU) Common Agricultural Policy (CAP) price support system (PSS) applied to producers in the EU-15 and in Turkey. The producer subsidy estimate (PSE) method has been used to determine protection levels for selected cereal products from the beginning of the application of the PSE method in 1986 to 2004. The expected contribution of this study is to determine which support instruments, such as countervailing levies or direct payments (based on limited or unlimited area) against export subsidies, voluntary or compulsory set-aside measures and price interventions, are more appropriate for the CAP in reducing destabilizing effects on trade with selected products between the EU and Turkey with respect to distribution effects (how income is distributed between different groups involved in the production operation process). Does the current PSS of the CAP have positive effects on agricultural producers in Turkey as a non-member country? The major finding of this paper is the evaluation of benefits and costs of common agricultural policies of the EU on fair trade. The assessment of the PSE of the EU's CAP will be used to determine the impact of current support measures of the CAP reforms on fair trade and how the CAP measures can be reformed for the improvement of producer gain in accordance with fair trade.

The European Union’s Common Agricultural Policy and Developing Countries: the Struggle for Coherence

Europe’s Common Agricultural Policy (CAP) has long been criticized as an outstanding example of policy incoherence with development objectives. However, successive CAP reforms now mean that the distortions it generates on world markets are smaller than before, although they remain significant for individual commodities. This paper first examines whether the traditional criticism of the CAP as incoherent with the EU’s proclaimed development objectives remains valid. It then asks how the CAP might be further reformed so as to make it still more coherent with the EU’s development policy objectives. Improving the development coherence of EU agricultural policy requires more liberal market access for developing country agri‐food exports than they currently enjoy. But it also requires that the EU put in place policies to protect and assist those developing countries which may not be able to take advantage of improved market access or which may lose out where lower trade barriers lead to preference erosion.

Development of the Single Area Payments Scheme in the Visegrad Countries

One of the most important date for the Visegrad Countries2 was year 2004, because of the accession to the EU. The four countries have to apply the Common Agricultural Policy (CAP) which provides facilities for the farmers in form of direct payment, market measures, agricultural and rural development programs. The analyses of the direct payments development in the Visegrad Countries are necessary for the further CAP reform

The reform of the 2003 Common Agricultural Policy: an advocacy coalition explanation1

This article addresses the core research question – how can we understand the policy processes leading to the 2003 Common Agricultural Policy (CAP) reform? It utilizes the Advocacy Coalition Framework (ACF) perspective as an explanatory framework for these purposes in a European Union (EU) policy area which normally lies outside ACF applications. In the ACF, it is assumed that advocacy coalitions will resist information that challenges the policy core beliefs of decision actors. This characteristic is even stronger in semi-federalist systems such as the EU. Hence, a high degree of consensus is required to change the policy core, as was the case with the 2003 CAP reform. The article shows that the ACF can be expanded to explain the CAP reform. It also demonstrates that the preconditions identified by the ACF for a successful consensus process were fulfilled in the reform process. The onset of the BSE crisis and the emergent international trade negotiations meant that the status quo was no longer unacceptable. Most of the negotiations leading up to the CAP reform were held in private and took a great deal of time. Commissioner Fischler was willing to act as facilitator in the process and strove to make the reform process as non-normative as possible. However, in order to accommodate the criticism of the ACF for not taking collective action problems serious, it is also observed that new forms of non-trivial coordination occurred, namely discursive coordination, which became the most frequently used form of coordination during the 2003 CAP reform process and which is much less problematic as far as collective action problems are concerned.

The potential of bio-methane as bio-fuel/bio-energy for reducing greenhouse gas emissions: a qualitative assessment for Europe in a life cycle perspective

Anaerobic digestion is a well known process that (while still capable of showing new features) has experienced several waves of technological development. It was "born" as a wastewater treatment system, in the 1970s showed promise as an alternative energy source (in particular from animal waste), in the 1980s and later it became a standard for treating organic-matter-rich industrial wastewater, and more recently returned to the market for its energy recovery potential, making use of different biomasses, including energy crops. With the growing concern around global warming, this paper looks at the potential of anaerobic digestion in terms of reduction of greenhouse gas (GHG) emissions. The potential contribution of anaerobic digestion to GHG reduction has been computed for the 27 EU countries on the basis of their 2005 Kyoto declarations and using life cycle data. The theoretical potential contribution of anaerobic digestion to Kyoto and EU post-Kyoto targets has been calculated. Two different possible biogas applications have been considered: electricity production from manure waste, and upgraded methane production for light goods vehicles (from landfill biogas and municipal and industrial wastewater treatment sludges). The useful heat that can be produced as by-product from biogas conversion into electricity has not been taken into consideration, as its real exploitation depends on local conditions. Moreover the amount of biogas already produced via dedicated anaerobic digestion processes has also not been included in the calculations. Therefore the overall gains achievable would be even higher than those reported here. This exercise shows that biogas may considerably contribute to GHG emission reductions in particular if used as a biofuel. Results also show that its use as a biofuel may allow for true negative GHG emissions, showing a net advantage with respect to other biofuels. Considering also energy crops that will become available in the next few years as a result of Common Agricultural Policy (CAP) reform, this study shows that biogas has the potential of covering almost 50% of the 2020 biofuel target of 10% of all automotive transport fuels, without implying a change in land use. Moreover, considering the achievable GHG reductions, a very large carbon emission trading "value" could support the investment needs.However, those results were obtained through a "qualitative" assessment. In order to produce robust data for decision makers, a quantitative sustainability assessment should be carried out, integrating different methodologies within a life cycle framework. The identification of the most appropriate policy for promoting the best set of options is then discussed.

Co-operative agreements and the EU Water Framework Directive in conjunction with the Common Agricultural Policy

Abstract. This paper discusses the significance of voluntary arrangements for the water and agricultural policies in the European Union. The current implementation of the European Water Framework Directive (WFD) and the reform of the Common Agricultural Policy (CAP) require new approaches in water management. As many case studies have shown, co-operative agreements (CAs) between water companies, farmers and authorities can help to reduce environmental pressures on water bodies. The main reasons for that are: i) water companies are ready to advise and financially support farmers in changing production methods; ii) changes of farming practices are tailored to the site-specific requirements; iii) farmers and water companies are interested in minimising the costs and environmental pressures as they benefit, for example, from modernization of farming methods, and reductions in cost of water treatment, and iv) voluntarily agreed commitments to change farming practices are often stricter than statutory rules. Moreover, precautionary rather than remedial measures are preferred. Tackling diffuse pollution is one of the main concerns of the WFD. CAs can enhance the cost-effectiveness of actions within the programmes of measures so that good water status is achieved by 2015. In CAs all relevant stakeholders, located in catchment areas of agricultural usage, can be involved. Thus, they can help to foster integrated water resources management. In particular, disproportionate costs of changing farming practices can be identified. With regard to the recent CAP reform, financial support for farmers will be linked to compliance with environmental standards and further commitments. This concerns both direct payments and agri-environmental programmes. The experience gained in CAs can provide information on best agricultural practices. Informed farmers are more ready to meet environmental requirements. Because CAs implement the most cost-effective changes in farming practice, it can be assumed that farmers will not face considerable costs due to the new EU water and agricultural policies. Some examples of CAs are described and the significance of CAs in the implementation of the WFD and CAP reform will be highlighted. The article closes with an outlook on the needs of future research activities.

The Political Economy of the 2003 Reform of the Common Agricultural Policy

The 2003 reform of the European Union's Common Agricultural Policy (CAP) under Commissioner Fischler was the most radical in the history of the CAP. This paper analyzes the causes and constraints of the reform. The paper argues that an unusual combination of pro-reform factors came together in the first years of the 21st century, making this reform possible.

How the EU Single Farm Payment should be modelled: lump-sum transfers, area payments or… what else?

The 2003 Common Agricultural Policy (CAP) reform radically changes the way the European Union (EU) supports its agricultural sector by decoupling direct payments. Production is no longer required to get the payment attached to Single Farm Payment (SFP) entitlements. However, the new scheme maintains a specific link between payments and hectares; in addition, SFP entitlements can be exchanged among farmers. These features question the way SFP entitlements should be regarded, hence modelled, i.e., as lump-sum transfers, area payments or… something else. We develop a microeconomic analytical framework which shows that the answer crucially depends on the total number of entitlements which are initially made available relative to the number of hectares, more specifically the number of cultivated hectares in a zero support regime, the number of cultivated hectares in a policy support regime trough per-hectare direct aids, and the number of cultivated or idled hectares in a policy regime where support is granted through direct aids per hectare and production is not required.

Predicting the impact of the EU common agricultural policy reform in England: micro and macroeconomic aspects

Abstract In this article we investigate the effects of the European CAP reform on a selection of arable crops in England, both at a regional and national level. The results show that the CAP reform will push farmers to adjust to the new market conditions, which will cause a further restructuring of the English agricultural business sector. Our results show that, under the new market conditions, economically‐small farms will increase their output by allocating more land to cereals, whereas economically‐large farms will need to decrease land allocated to cereals to reduce production costs and achieve better returns.

European Rural Development under the Common Agricultural Policy's ‘Second Pillar’: Institutional Conservatism and Innovation

Dwyer J., Ward N., Lowe P. and Baldock D. (2007) European rural development under the Common Agricultural Policy's ‘Second Pillar’: institutional conservatism and innovation, Regional Studies 41, 873–887. The EU Rural Development Regulation (RDR) was launched in 2000 as the new ‘second pillar’ of the Common Agricultural Policy (CAP), promoting sustainable rural development. The rhetoric surrounding the Regulation emphasized decentralized, participative delivery and a territorial and multi-sectoral focus – relatively new and unfamiliar principles for the CAP. Evidence from a European study of RDR Programmes is used to evaluate how this experiment has performed in the initial years, highlighting the need for further institutional adaptation to enable effective delivery. The relevance of lessons learned in the design and delivery of EU regional policy is also highlighted. The prospects for more effective adaptation are assessed in the light of the most recent sets of CAP reforms. Dwyer J., Ward N., Lowe P. et Baldock D. (2007) Le développement rural européen sous le deuxième pilier de la Politique agricole commune: conservatisme institutionnel et innovation, Regional Studies 41, 873–887. La Réglementation communautaire en faveur du développement rural (RDR) a été lancée en 2002 en tant que le ‘deuxième pilier’ de la Politique agricole commune (Pac), prônant le développement rural durable. Le discours qui a entouré cette réglementation a souligné une mise en oeuvre décentralisée et participative, et un point de mire territorial et à plusieurs secteurs - des principes relativement nouveaux et inhabituels à la Pac. On se sert des preuves provenant d'une étude européenne de la RDR afin d'évaluer les résultats de cette expérience dans ses débuts, tout en soulignant la nécessité d'autres adaptations institutionnelles pour faciliter une mise en oeuvre efficace. On souligne aussi l'importance des leçons tirées de la mise au point et de la mise en oeuvre de la politique régionale communautaire. A la lumière des réformes de la Pac, on évalue les perspectives pour une adaptation plus efficace. Politique agricole commune Développement rural Aménagement du territoire Apprentissage institutionnel Dwyer J., Ward N., Lowe P. und Baldock D. (2007) Europäische ländliche Entwicklung unter der ,zweiten Säule‘ der Gemeinsamen Agrarpolitik: institutioneller Konservatismus und Innovation, Regional Studies 41, 873–887. Die EU-Verordnung für ländliche Entwicklung wurde im Jahr 2000 als neue ,zweite Säule‘ der Gemeinsamen Agrarpolitik (GAP) zur Förderung der nachhaltigen ländlichen Entwicklung eingeführt. In der die Verordnung umgebenden Rhetorik wurden eine dezentralisierte, beteiligungsorientierte Umsetzung sowie ein territorialer und multisektoraler Fokus betont – relativ neue und unbekannte Prinzipien für die GAP. Wir bewerten anhand von Belegen aus einer europäischen Studie über die Programme der Verordnung für ländliche Entwicklung, zu welchen Ergebnissen dieses Experiment in den ersten Jahren geführt hat, und verdeutlichen, dass für eine wirkungsvolle Umsetzung eine weitere institutionelle Anpassung erforderlich ist. Ebenso heben wir die Relevanz der Lehren hervor, die beim Entwurf und der Umsetzung der EU-Regionalpolitik gezogen wurden. Die Chancen für eine wirkungsvollere Anpassung werden angesichts der jüngsten Reformen der GAP untersucht. Gemeinsame Agrarpolitik Ländliche Entwicklung Regionalentwicklung Institutionelles Lernen Dwyer J., Ward N., Lowe P. y Baldock D. (2007) El desarrollo rural europeo bajo el ‘segundo pilar’ de la Política Agrícola Común: conservadurismo e innovación institucionales, Regional Studies 41, 873–887. El Reglamento de Desarrollo Rural (RDR) de la UE fue introducido en 2000 como el nuevo ‘segundo pilar’ de la Política Agrícola Común (PAC), que fomenta el desarrollo rural sostenible. La retórica en torno a este Reglamento hacía hincapié en ofrecer una política descentralizada y participativa y ponía su atención en un enfoque territorial y multisectorial; unos principios relativamente nuevos y poco familiares para la PAC. Utilizamos ejemplos de un estudio europeo sobre los programas del RDR para evaluar cómo se ha desempeñado este experimento durante los primeros años, recalcando que para obtener buenos resultados, es necesario adaptarlo desde un aspecto institucional. Asimismo destacamos la importancia de las lecciones que se han aprendido en diseñar y poner en práctica la política regional de la UE. Analizamos también las perspectivas para adaptarlas de un modo más eficaz en vistas a las reformas más recientes de la PAC. Política Agrícola Común Desarrollo rural Desarrollo regional Aprendizaje institucional

Implementing the Water Framework Directive: Contract Design and the Cost of Measures to Reduce Nitrogen Pollution from Agriculture

The performance of different policy design strategies is a key issue in evaluating programmes for water quality improvement under the Water Framework Directive (60/2000). This issue is emphasised by information asymmetries between regulator and agents. Using an economic model under asymmetric information, the aim of this paper is to compare the cost-effectiveness of selected methods of designing payments to farmers in order to reduce nitrogen pollution in agriculture. A principal-agent model is used, based on profit functions generated through farm-level linear programming. This allows a comparison of flat rate payments and a menu of contracts developed through mechanism design. The model is tested in an area of Emilia Romagna (Italy) in two policy contexts: Agenda 2000 and the 2003 Common Agricultural Policy (CAP) reform. The results show that different policy design options lead to differences in policy costs as great as 200-400%, with clear advantages for the menu of contracts. However, different policy scenarios may strongly affect such differences. Hence, the paper calls for greater attention to the interplay between CAP scenarios and water quality measures.

Re‐evaluating the Harbinson Proposal – Prospects for the EU25: A Note

AbstractIn this study, we use the Harbinson Proposal and July Framework to compare a ‘likely’ Doha scenario with a realistic baseline. The novelty of this study is that we focus exclusively on the trade‐led welfare impacts in selected EU member states. The important features of this note are the: (i) usage of the latest Global Trade Analysis Project (version 6) data; (ii) focus on EU25 regions incorporating all major Common Agricultural Policy instruments and reforms; and (iii) inclusion of binding tariff overhangs into the Harbinson tariff reductions. Results show the damping effects of tariff‐binding overhangs on welfare outcomes. This and other factors which limit the gains to liberalisation mean that the EU25 only realises 10% of its long‐run welfare gain potential, as defined by complete liberalisation.

A competitividade do regadio em Portugal no contexto da Nova Política Agrícola Comum: o caso de uma exploração agrícola no Alentejo

A Nova Reforma da Política Agrícola Comum (PAC) aprovada em 2003 constitui um reforço dos principais objectivos das reformas anteriores de 1992 e de 2000, como a promoção da competitividade do sector agrícola, da multifuncionalidade dos espaços rurais e agrícolas e da exploração sustentável dos recursos. No essencial, substituem-se as ajudas diretas à produção previstas na maioria dos regulamentos das Organizações Comuns de Mercado, por um regime de pagamento único por exploração sujeito a normas de eco-condicionalidade e a limitações na reconversão dos sistemas de produção agrícola. Este artigo avalia os impactos da nova PAC na competitividade do regadio em Portugal nas explorações agrícolas do Alentejo, nomeadamente, dos efeitos do pagamento único na afetação e na retribuição dos recursos agrícolas, de modo a identificar as principais alterações nas orientações produtivas e nos rendimentos agrícolas. Também são avaliados alguns dos principais impactos sócio-econômicos e ambientais diretos decorrentes dos ajustamentos produzidos com a Nova PAC. A metodologia utilizada baseia-se no desenvolvimento de um modelo micro-econômico de programação matemática estocástica discreta de maximização do valor esperado e de minimização do risco, adaptado às características de uma empresa agrícola do Alentejo. O modelo é utilizado para avaliar prospectivamente o plano de produção e o rendimento no curto e no longo prazo, mediante os cenários da reforma da PAC de 2000 e da Nova Reforma da PAC de 2003.

CAP and Kyoto Conference: Taxation or Environmental Standards to Improve Carbon Sinks

The improvement of air good quality is a worldwide priority. The Kyoto Protocol, and the agreements achieved in the following process negotiation, have defined the LULUCF activities (land use, land use change, forestry) the industrialized countries have at disposal to reach the engagements of reduction of the climate emissions-changing. The CAP (Common Agricultural Policy) reform affirmed that the content of the policy will secure a multifunctional, sustainable and competitive agriculture throughout Europe. It will also be able to maintain the landscape and the countryside, make a key contribution to the vitality of rural communities and respond to consumer concerns and demands regarding food quality and safety, environmental protection and maintaining animal welfare standards. In regulation absence firms pollute into air CO2 without being held to pay a price of the service of assimilation of the greenhouse gases supplied from the agroforestry sector. The greater social efficiency of taxes than adopting reduction standard (as signed in the Kyoto Protocol) is demonstrated. In spite of that, the society has no general agreement on supporting farmers and the overcoming of practical problems following this policy remain as a narrow road. Despite the uncertainty of public policies, a practical purpose is then needed in sustainable forestry, considering the social advantage of financing afforestation, giving clear goals of being CO2 sinks.