The CAP after 2013 : a Concept for Nature Rural Public Goods


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  • *Interestingly enough, it would have been a pretty challenging task to make a synthesis of the views expressed by Former Commissioner Fishler and forme french Agriculture Minister Henri Nallet : provocative Remark regarding the gap (the gulf, the ocean as (Cyrano de Bergerac would say !) between Fishler/Nallet (encore que les deux semblent bien agrariens) this is a secret please do not repeat ! ** by president Romstad from an old timer of the CAP (that’s me) who may also have enough white hair to run the risk of being irrelevant if so you can charge (put the blunt on) my white hair initial draft of JC, the embarked me from my retreat of hobby farmer in the deep countryside of Brittanny Joint authors +Acknowledge contribution of the TF Task force But disclaimer of responsibility of TF members, we drove the end product towards our own views. Actually it would have been impossible to reconcile the views of representative of say COPA/COGECA and the view of say Michiel Keyser (who sees barely no place for European competence and leave the rural public goods to local authorities We did attempt a synthesis but escaped tangencially and discretely heading towards our own thinking.
  • (but the Notre Europe Report also argues for market policies restricted to essential failures and a significant food program targeting the poor among the riches)
  • * Across individual and nations **It is hardly understandable that export restitutions could have lasted for so long; although I do not plan to deal with political explanations I tend to find the culprit in the supra national nature of the CAP which distorts the decision making.
  • *(when benefits from government are public, political clout is weaker) those are mainly public goods or political concerns with weak political clout **recall the most recent reaction of many member states asking for less Commission interference in the verification of Cross compliance Pillar II budget is still a small % of agri expenditures :
  • (revealed by the translation into the French Droits à Paiement Unique) ( there is more in this sliding semantic than a traduttore tradittore accident )
  • And this is important for Europeans do decide what they want to do together for their countryside, and what should be left to Member States
  • The CAP after 2013 : a Concept for Nature Rural Public Goods

    1. 1. The CAP after 2013 : a Concept for Nature Rural Public Goods Louis P. Mahé Agrocampus-Ouest
    2. 2. Sources of the presentation <ul><li>Notre Europe’s Report with JC Bureau: </li></ul><ul><li>CAP reform beyond 2013: An idea for a longer view </li></ul><ul><li>Also borrows from 2001 book with F Ortalo-Magné: Agricultural Policy: a European Model </li></ul>
    3. 3. Issues covered <ul><li>Brief comment on the pending CAP problems </li></ul><ul><li>Focus on a concept for a longer view of a CAP (after 2013) </li></ul><ul><li>Touch upon the issue of the domain of EU competence & financing (in the light of fiscal federalism) </li></ul>
    4. 4. Selected personal remarks on CAP developments 1993-2008 (1/2) <ul><li>Only incremental corrections of major internal market imbalances & soothing of external trade conflicts </li></ul><ul><li>Changes were complacent with vested interests </li></ul><ul><li>Hence essential public stakes such as environment quality concerns are not effectively addressed </li></ul>
    5. 5. Selected personal remarks on CAP developments 1993-2008(2/2) <ul><li>The history of support has created in the farm community across Europe a culture of </li></ul><ul><ul><li>“ Rights” to cash support and </li></ul></ul><ul><ul><li>Reluctance for accountability regarding the counterparts (see farm vote on the “Treaty” in FR and IRL) </li></ul></ul><ul><li>The great merit of the past reforms was to alter the political economy of the decision making for the following waves (visible transfers, large budget ,..) </li></ul>
    6. 6. Pending and unresolved issues (1/2) <ul><li>The environmental benefits of the reforms are mixed (scant evidence from National RD Plans assessments and other analyses) </li></ul><ul><li>The record of positive impacts of Rural Development Plans on rural employment is patchy or uncertain </li></ul>
    7. 7. Pending and unresolved issues (2/2) <ul><li>The SFPs do not provide the relevant incentives; they still suffer from the original sin of “compensation logic” </li></ul><ul><li>We have little evidence on cross-compliance efficiency, (buffer strips seem to work, pollution abatement doesn’t….). </li></ul><ul><li>Pillar I is EU financed and only pillar II is co-financed : this makes Member States less responsible w.r.t. EU spending </li></ul>
    8. 8. A new concept for the CAP payments after 2013 <ul><li>Differentiation and targeting (according to space and practices) </li></ul><ul><li>Proportionality -efficiency (closer link between value of service and aids; and value and costs) </li></ul><ul><li>Consistency : (e.g. aids to organic farming more attractive than to conventional and not the converse as it is) </li></ul><ul><li>Simplicity and stability of policy instruments ( to build on learning processes and returns to scale due to sunk administrative costs ) </li></ul>
    9. 9. A new concept for the CAP Payments after 2013* <ul><ul><li>Substitute contracts, including commitments to deliver, for the open counter payments now in place </li></ul></ul><ul><ul><li>Financial responsibility of M. States </li></ul></ul><ul><ul><ul><li>To discipline national interests </li></ul></ul></ul><ul><ul><ul><li>To free the decision process from national back thoughts </li></ul></ul></ul>
    10. 10. A three stage Contractual Payment Scheme covering pillar I and II. <ul><li>the SFP is replaced by a contract which offers Basic husbandry payments (BHP). They </li></ul><ul><ul><li>target commercial farms in areas considered as “ordinary” (main part of rural territory) </li></ul></ul><ul><ul><li>Are tied to commitments made by operators, ( this reverses the logic of cross compliance) </li></ul></ul><ul><ul><li>Are scaled down relatively to current SFPs </li></ul></ul><ul><ul><li>Are neither tradable nor transmissible to heirs </li></ul></ul><ul><ul><li>Have a limited but significant duration </li></ul></ul>
    11. 11. A three stage contractual payment scheme covering pillar I and II. <ul><li>Natural handicap payments </li></ul><ul><ul><li>are contractual payments targeting farms in rural zones with natural handicap which cannot compete but are essential to the rural fabric, i.e. where agriculture is the Econ. Base ( ≠ Savoie) </li></ul></ul><ul><ul><li>These payments may be coupled with production or animal heads under conditions of low inputs or low stocking rates (Scottish study). </li></ul></ul>
    12. 12. A three stage contractual payment scheme covering pillar I and II. <ul><li>Green points payments. </li></ul><ul><ul><li>Target farms which use production techniques such as organic or who commit to a higher level of environmental services than basic regulations </li></ul></ul><ul><ul><li>they are a schedule of credit points associated with a menu of commitments/ rural landscapes & resources. </li></ul></ul><ul><ul><li>GPP would be prescribed for portions of the rural territory which are environmentally sensitive or endowed with high nature value assets. </li></ul></ul><ul><ul><li>They could also contribute to alleviating the footprint of agriculture in “ordinary areas” by supporting farms engaging in organic & certified extensive methods. </li></ul></ul>
    13. 13. Horizontal principles <ul><li>Payments for services to R. P. Goods instead of right to income support </li></ul><ul><ul><li>No more open-counter aids but contracts </li></ul></ul><ul><ul><li>duration limited in time </li></ul></ul><ul><ul><li>“ Intuitu personae” , hence not transmissible </li></ul></ul><ul><li>Financial responsibility instead of so-called “ financial solidarity ” : All the contractual payments, including the BHPs are co-financed by the national budgets (50% ? ). This would greatly reduce </li></ul><ul><ul><li>Existing disparities in financial balances across MS </li></ul></ul><ul><ul><li>built-in incentive for Member States to cash in balance of payments windfalls* </li></ul></ul><ul><ul><li>this institutional change would later alter the behavior of policy makers (D. North) </li></ul></ul>
    14. 14. Conclusions (1/3) : Reflexive assessment of proposals <ul><li>are partly radical (personal contracts and land sliding redistribution; general co-financing, end of Pillar I ) and partly “ad hoc” </li></ul><ul><li>will not substitute for other policies such as environmental or regional policies and participating Rural Dt programs (leader) </li></ul><ul><li>recognize empirical constraints : there are limits to fine tuning and administrative costs may burden the schemes </li></ul><ul><li>Hence are not entirely consistent with principle of Proportionality-efficiency (how close can we be?) </li></ul>
    15. 15. Conclusions (2/3) : the role of EU and the common policy are streamlined to focus public goods Food Fiber Markets Easily Excludable Fishing resources irrigation States, Local g Excludable with costs Landscapes water quality Clim.Biod. EUROPE Non Excludable rival Local, partly rival Global, non rival,
    16. 16. Conclusions (3/3) : the role of EU and the common policy are streamlined to focus public goods <ul><li>The proposals maintain a degree of supranational CAP. They assume that rural public goods exist or can be provided by agriculture under some conditions </li></ul><ul><ul><li>Some being global enough to justify participation of European funds ( the challenge is to avoid free riding of MS) (biodiversity) </li></ul></ul><ul><ul><li>Some being local enough to motivate subsidiarity in both decision making and even financial participation of local authorities (rural amenities) </li></ul></ul><ul><li>Rules decided at the EU level can help avoid or curtail political failure at local level * </li></ul><ul><li>Lessons from fiscal federalism : does not tell so clear a message *for maximum local and minimum Europe when various issues are taken on board </li></ul><ul><li>Precedents of Decisions at EU level for local public goods or for ethical issues with different preferences across Member States An. W. </li></ul>
    17. 17. Final Word <ul><li>A message to those who want just to scrap the CAP: </li></ul><ul><ul><li>should not substitute doctrine to the current opportunism of the status quo supporters </li></ul></ul><ul><ul><li>Fiscal Federalism literature is nuanced about the virtues of renationalization </li></ul></ul><ul><ul><li>Europe is still very ≠ from federations (US) only 2% public spending at supra-state level </li></ul></ul>