The CAP towards 2020: future demands for innovation

The CAP towards 2020: future demands for innovationFlorian Dittrich Olof S.

Outline 1. The context: Europe 2020 2. Where are we with the CAP? 3. Why do we need a reform?4. New objectives, future instruments and policy options 5. Innovation Union and Innovation Partnerships 2

1. The CAP’s contribution to Europe 2020•  SMART growth – by increasing resource efficiency and improving competitiveness through knowledge transfer and innovation, developing high value added and quality products•  SUSTAINABLE growth – by maintaining the food, feed and renewable production base, environmental public goods, ensuring sustainable land management•  INCLUSIVE growth – by unlocking local potential, diversifying rural economies, accompanying restructuring•  CAP has to contribute to these aims. 3

2. Where are we with the CAP ? Background of reform•  Entry into force of Lisbon Treaty•  Budgetary framework ends in 2013•  Need to align CAP post-2013 to Europe 2020 strategy•  Consultation conference and institutional discussion Roadmap for the reform•  18 November 2010: Presentation of Communication•  23 November 2010 - 25 January 2011: Consultation on impact assessment (> 300 contributions)•  Summer 2011: proposal for new budgetary framework•  Autumn 2011: Proposals + impact assessment for CAP reform 4

CAP expenditure and CAP reform path (2007 constant prices) EU-10 EU-12 EU-15 EU-25 EU-27Source: European Commission - DG Agriculture and Rural Development 5

3. Why do we need a reform? To respond to challenges ahead Economic challenges•  Food security•  Price variability•  Economic crisis•  Competitiveness & efficiency 6

Recent evolution of agricultural input and output pricesSource: Eurostat 7

3. Why do we need a reform? To respond to challenges ahead Economic Environmental challenges challenges•  Food security •  Water/air quality•  Price variability •  Habitats and biodiversity•  Economic crisis •  Soil depletion •  Climate change adaptation 8

Climate change - Possible impacts on EU agriculture ! Floods risk ! Hotter and drier summers ! Sea levels ! Risk crop pests, diseases ! Crop, forage yields " Animal health, welfare " Summer rainfall ! Winter storms, floods ! Length growing season, yields ! Suitable farmland ! Pests, diseases risks ! Winter rainfall, floods " Summer rainfall ! Risk drought, water stress ! Soil erosion risk ! Yields, range of crops" Water availability Source: DG Agriculture and Rural Development, based on EEA reports, JRC and MS academic studies! Risk drought, heat spells! Risk soil erosion" Growing season, crop yields" Optimal crop areas 9

3. Why do we need a reform? To respond to challenges ahead Economic Environmental Territorial challenges challenges challenges•  Food security •  GHG emissions •  Vitality of rural areas•  Price variability •  Soil depletion •  Diversity of EU•  Economic crisis •  Water/air quality agriculture •  Habitats and biodiversity Equity and balance of support Contribution to Europe 2020 strategy 10

4a. What are the objectives with the reform? Viable food Sustainable Balanced territorial production management of development natural resources and climate action•  To contribute to •  To guarantee the •  To support rural farm income and provision of vitality and limit its variability public goods employment•  To improve sector •  To foster green •  To promote competitiveness growth through diversification and share in food innovation •  To allow social and chain value-added •  To pursue climate structural diversity•  To compensate change mitigation in rural areas areas with natural and adaptation constraints Common EU response needed 11

4b. What policy instruments? Better targeted to objectives Based on two pillar structure Direct payments•  Redistribution•  Better targeting•  Redesign: •  Greening of direct payments •  Capping of payments •  Small farmers support •  Areas with specific natural constraints 12

Average direct payments per potentially eligible area and beneficiary Direct payments net ceilings fully phased-in (in 2016)Source: European Commission - DG Agriculture and Rural Development 13

4b. What policy instruments? Better targeted to objectives Based on two pillar structure Direct payments Market measures•  Redistribution •  Market orientation•  Better targeting •  Streamline and simplification•  Redesign: •  Greening of direct •  Improved food payments chain functioning •  Capping of payments •  Small farmers support •  Areas with specific natural constraints 14

4b. What policy instruments? Better targeted to objectives Based on two pillar structure Direct payments Market measures Rural development•  Redistribution •  Market orientation •  Environment, climate change and innovation•  Better targeting •  Streamline and simplification•  Redesign: •  Address risk •  Greening of direct •  Improved food management payments chain functioning •  Capping of •  Improved coherence payments with other EU policies •  Small farmers support •  Areas with specific natural constraints 15

4c. What policy options? Continue the reform process by introducing further gradual changes while adjusting the mostOption 1 pressing shortcomings (e.g. more equity in the distribution of direct payments) Capture the opportunity for reform ensuring that CAP becomes more sustainable and balancedOption 2 (between policy objectives, MS and farmers) through more ‘green’ targeted measures More fundamental reform focusing entirely on environmental and climate change objectivesOption 3 through rural development, moving away from income support and most market measures 16

Summary: Preliminary results from the public consultation•  Majority finds that policy scenarios are consistent with the objectives of the reform.•  Only very few preferred a no-policy option•  Option 2 most popular. Option 1 slightly more popular than 3.•  Option 2 is believed to lead to higher administrative costs•  Greening is popular among the wider public but many farmers are concerned about effects on competitiveness•  CAP has a role to play on agricultural markets•  Strong support for Rural Development measures, not least agri- environmental schemes 17

5a. Innovation Union Communication COM(2010) 546 final 6 October 2010•  Strategic approach –  Partnership with Member States & stakeholders –  Whole cycle of innovation: from blue sky research to market uptake•  Tackling weaknesses –  Under-investment –  Fragmentation & framework conditions•  Building on strengths –  Focus on societal challenges –  Broad concept of innovation involving all actors•  A distinctive European approach to innovation: partnerships 18

•  A new approach to innovation which is: –  Societal challenge-driven, going beyond the technological focus –  Cross-sectoral, reflecting the cross-cutting nature of challenges –  Resource-pooling, around a common target –  To facilitate the innovation process•  A successful Partnership should: –  Have a clear target and a convincing roadmap –  Bring EU-added value –  Use both supply-side tools and demand-side policies –  Engage Member States and key stakeholders from the private sector 19

What is the state of play for the first EIPs?•  The Commission is currently examining candidate proposals for a first round of partnerships: agriculture, raw materials, water, smart cities, smart mobility•  Pilot partnership on Active and Healthy Ageing: lessons learnt from this EIP will help developing the candidate EIPs•  Candidate partnerships will need to be approved by the European Council and the Parliament 20

•  Amongst the intended Partnerships is one to: –  Improve the supply of foodstuffs produced in a resource-efficient, productive and low emission way through improved agricultural and food-processing methods (p.25 Innovation Union)•  The objective of this Partnership is to: –  Deliver a safe and steady supply of food, feed and biomaterials – both existing products and new ones. There is a need to improve processes to preserve our environment, adapt to climate change and mitigate it. The Partnership would build a bridge between cutting-edge research and technology and the farmers, businesses and advisory services (p.43 IU). 21

Which are the challenges for innovation in agriculture? AGRI-Commissioner: agricultural EIP has to enhance productivity and efficiency, whilst ensuring sustainable resource management: “Produce more with less”•  Build bridges between cutting-edge research and technology and farmers, businesses, stakeholders, industry and advisors•  Work on increased knowledge exchange and provide feedback about research needs•  Mobilise multiple approaches, including technological and non-technological innovations 22

Where is scope for innovation in agriculture ? some examples•  Solutions for increased resource efficiency (soil, water, energy, fertilisers, pesticides,…) and reduced GHG emissions, e.g. ICT and satellite based precision farming, decision support systems for pest management, etc.•  Solutions with respect to recycling, bio-refinery (biomass conversion to produce fuels, power, heat, and value- added chemicals), development of specific primary production (e.g. pharmaceutical plants)•  Solutions for farm management beneficial to eco-system services and soil functionality (e.g. functional green infrastructures, pest suppressive soils, etc.) 23

For further information•  The CAP after 2013 http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm•  The Communication on the future of the CAP http://ec.europa.eu/agriculture/cap-post-2013/communication/ index_en.htm•  Innovation Union http://ec.europa.eu/research/innovation-union/index_en.cfm 24

Thank you 25

•  European Innovation Partnerships – agriculture is involved•  European Research Area framework – removing obstacles•  Streamlining EU programmes – simpler access•  New financial instruments – start-ups, risk sharing, loans•  Reform of standardisation system – EU patent, screening•  Public procurement of innovation – dedicated budgets•  Regions & Social innovation pilot – citizen-centred approaches•  Stronger monitoring – new scoreboard 26

How will the Partnership work?•  EIP will rely on outcomes provided by research community, which will feed concrete actions of EIP•  ‘Operational Groups’: may carry out projects testing and applying innovative processes, products and technologies (involving farmers, scientists, advisers and/ or business)•  Support for cooperation and setting up of the ‘operational groups’ (e.g. farmers, advisers, enterprises, researchers, administration) 27

How are ICT going to be involved?•  ICT and satellite navigation support provides for an important potential to shift the development patterns towards agricultural practices that preserve the environment and eco-system services.•  Known applications are EGNOS and GALILEO 28

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The CAP towards 2020: future demands for innovation

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