Jack Thurston: Agra Europe Outlook

The Future of the CAP: An Independent View Agra Europe Outlook for Agriculture 16 March 2010 Jack Thurston Co-founder, farmsubsidy.org

If citizens knew how the EU spends €55 billion a year on farm subsidies... Would they approve?

Our method Freedom of information Good stories + + Beer Investigative Public debate policy reporting

6 | | BUSINESS Business & Media | 21.05.06 CASH COWS WHAT IT COSTS THE TAXPAYER TO DESTABILISE DAIRY MARKETS British export subsidies, by Export subsidy granted, by company, 2004 and 2005 destination country, 2004 and 2005 Fayreﬁeld Foods* £22,149,818 Philpot Dairy Products £21,957,002 SAUDI Dale ARABIA Farm* £19,391,504 £2,147,003 INDIA £1,244,914 Nestle UK £7,442,672 JA N APAN UAE BANGLADESH £1,24 273 £ 44,2 ALGERIA £6,016,605 £3,479,499 £9,413,948 TMC Dairies EGYP YPT (NI) £6,421,069 MEXICO £3,03 340 ,031,340 £7,714,200 PH IPPINE PHILIP NES JAMAICA JA AICA £1,7 ,901 ,708,9 £2,296,9 7 £2 296,987 OMA OMAN Hoogwegt £4,660,97 ,660,973 International £6,016,872 SUDAN THAILA D HAILAND IVORY COAST IVO £3,906,970 £6 06,805 £6,706,80 VENEZUELA £5,722,515 722,515 Lakeland Dairies £2,274,752 (NI) £4,863,754 NIGERIA £11,782,308 IND INDONESIA ESIA £2,94 8 £2,947,118 Eilers & Wheeler Sales £4,009,257 Meadow Foods £3,335,750 KEY F Uhrenholt Dairy £3,084,188 *includes subsidiaries £1 to £4m £4 to £7m £7m+ £0m 5 10 15 20 GRAPHIC: CATH LEVETT PHOTOGRAPH: ALAMY SOURCE: FARMSUBSIDY.COM Who’s creaming off EU subsidies? Exports of cheap European dairy products are crushing the livelihoods of developing world farmers, writes Heather Stewart ritish-based exporters, including known as the EU ‘butter mountain’ cow is one of the most reliable ways of on behalf of the EU, said Britain would Nestle and Dairy Crest, have (‘wine lakes’ were another manifestation Peter Mandelson lifting yourself out of poverty,’ says like to see them abolished. claimed £126m of taxpayers’ of the same problem). But after a barrage agreed to Europe Thurston, who is trying to compile a ‘We would prefer that export refunds

Three BIG problems with the CAP: 1. It’s Expensive 2. It’s Untargeted 3. It’s Unequal

Growth of the CAP budget € billions EU-10 EU-12 EU-15 EU-25 EU-27 ➔ ➔ ➔ ➔ ➔ 60 50 40 30 20 10 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Export subsidies Market support Direct aids Rural development

EU Budget, 2007-2013 Admin Jobs, growth, 6% security, justice, foreign policy, overseas aid, 43% Farm subsidies climate, energy, 51% environment, R&D, science & innovation...

Farm subsidy expenditure, 2007 € billions 60 52 45 30 15 12.8 ? 0 EU National Regional & local

Proposed EU Budget: 2010

Photo: NASA

Photo: Laura Leon / IHT

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“In conclusion, the current system fails to deliver value for taxpayers’ money. The underlying lack of logic in the current direct payment system, with no link between Through the green subsidies received and smokescreen public goods delivered must be urgently addressed.” How is CAP cross compliance delivering for biodiversity? BirdLife International, November 2009

Cross Compliance: geing paid for obeying the law “Many, if not all, standards are likely to have been legal requirements for some years before cross compliance was introduced in 2005... ...the overall value of the Single Payment [is] in the majority of cases…likely to vastly exceed the total related costs.” Institute for European Environment Policy, 2007

Cross Compliance in Scotland, 2008 Number of Amount payments Subsidies 48,603 €541 million Cross compliance 310 €203,121 breaches Proportion 0.6% 0.0004%

Targeting policies to objectives Objective Policy Incentivise ecological performance; Preserve natural resources regulation: polluter pays Target poorest rural households; Safeguard rural livelihoods invest in economic diversiﬁcation More open markets; skills, Reliable, aﬀordable food supply knowledge & new technology Income support for poor households, Preventing hunger food stamp type policies Skills, marketing, protection of High quality production intellectual property

Top 18% of recipients get 85% of the money

82 % of beneﬁciaries get less than €5,000

Direct aid, € per hectare - UAA, 2013 600 500 400 300 200 100 0 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

Harvesting cash on Anglesey

€27,286 / hectare M & R S Rogers, Bodrida Brynsiencyn

Wales: SPS Rates, 2008: Top 5 Recipient Municipality € / ha H W & E E WILLIAMS PWLLHELI 44,535 LLANFAIR M & R S ROGERS 27,286 PWLLGWYNGYLL TG HARRIS DYFED 26,848 W L RAYMOND & HAVERFORD WEST 26,008 LAWRENCE E R OWEN & SON HOLYHEAD 21,814

Wales: SPS Rates, 2008: Boom 5 Recipient Municipality € / ha JDF JONES CAERNARFON 1.48 RL JAMES CARMARTHEN 1.14 HG MORGAN NARBERTH 0.75 ML THOMAS CLYDACH 0.36 DT OWEN CAERNARFON 0.01

Wales: SPS Rates, 2008 € per hectare Recipients Proportion 500+ 1058 6% 400-500 982 6% 300-400 2602 16% 200-300 5376 32% 100-200 4815 29% less than 100 1908 11%

“The payment rates deﬁned in entitlements vary greatly depending upon: the historic claims record of the 2005 applicant in the period 2000 - 2002, any National Reserve award, the volume of Milk Quota held on 31 March 2005, and the Tonneage of Sugar Beet Contract held in 2005.”

Direct aid, € per farm worker - AWU, 2013 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

Average rural development spend, € per hectare - UAA (2013) 250 1,032 200 150 100 50 0 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK

How to spend it - Ecological farming: uplands, organic farms... - Marginal land at risk of abandonment - Invest in knowledge and skills: resource use, marketing, diversiﬁcation - Measures to address price & income volatility

EU Farm Income Growth 2000-2008 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"#$!%&&'!()*+,-./-*0.!1$0*!! "#$#%&'(#)*!&+!*,#!-./012%*2/-%!0)1&(#!0)!*,#!34567! &$#/!*,#!68889688:!;'<!'#/0&=>!0)!*#/(?!&+!-))2-%!1,-).#!;@<!-)=!12(2%-*0$#!./&A*,!;6888BC88<! 15% 130 10% 10% 9% 120 9% 5% 110 4% Cumulative growth 1% 0% 100 Annual growth -3% -5% 90 -5% -10% -9% 80 2000 2001 2002 2003 2004 2005 2006 2007 2008 ! 234!3*56+7+580.!9!:5-*,$;!<-*57/0/

A post-Fischler selement for the CAP? Redistribution is politically toxic, but... - Phase out historic entitlements - More conditionality on area payments - ‘Public money for public goods’ rhetoric - Price/income volatility measures - optional? - Budget cuts - 30% by 2020, but how? - Co-ﬁnancing - compulsory, rates vary by measure and by country

Thanks for listening! Jack Thurston Co-founder, farmsubsidy.org jack@farmsubsidy.org

Jack Thurston: Agra Europe Outlook

by jackthur on Mar 22, 2010

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Jack Thurston: Agra Europe Outlook — Presentation Transcript