The CAP and EU enlargement: Prospects for an alternative strategy to avoid the lock-in of CAP support

The integration of the central and east European countries (CEECs) into the Common Agricultural Policy (CAP) could become a major problem. At the Copenhagen European summit in December 2002, the EU agreed a transitional period with a gradual phasing in of direct payments. However, this strategy will not solve the problems of the CAP: budgetary limits remain problematic, the policy ignores possible developments in the World Trade Organization (WTO), and the extension of direct payments to the CEECs will further capitalize, and hence lock-in, agricultural support. The latter makes future reform even more difficult and, to overcome these problems, we suggest an alternative strategy to integrate the CEECs into the CAP. The EU should phase out direct payments by applying a bond scheme. Finally, we consider whether this option is politically viable.

Curbing agricultural exceptionalism: The EU's response to external challenge

From 1948 to 1994, the agricultural sector was afforded special treatment in the GATT. We analyse the extent to which this agricultural exceptionalism was curbed as a result of the GATT Uruguay Round Agreement on Agriculture, discuss why it was curbed and finally explore the implication of this for EU policy making. We argue that, in particular, two major changes in GATT institutions brought about restrictions on agricultural exceptionalism. First, the Uruguay Round was a 'single undertaking' in which progress on other dossiers was contingent upon an outcome on agriculture. The EU had keenly supported this new decision rule in the GATT. Within the EU this led to the MacSharry reforms of the Common Agricultural Policy (CAP) in 1992, paving the way for a trade agreement on agriculture within the GATT. Second, under the new quasi-judicial dispute settlement procedure, countries are expected to bring their policies into conformity with WTO rules or face retaliatory trade sanctions. This has brought about a greater willingness on the part of the EU to submit its farm policy to WTO disciplines.

The 2003 CAP Reform: Accommodating WTO Pressures

In 2003, the EU agreed a major reform of the common agricultural policy (CAP). Its centrepiece was a new Single Payment Scheme (SPS). Policy concerns at the time involved the budget, EU enlargement to the East, the WTO negotiations, and a perception (articulated by Commissioner Fischler) that there should be a shift of budget funds from CAP's Pillar 1 (price and income support) to Pillar 2 (rural development). We outline these concerns, conclude that the WTO was the main driving force of the reforms, set out the key parameters of the new support scheme, and outline some thoughts on the durability of the reformed CAP in the face of continued internal and external pressures.

Decoupling EU farm support: Does the new single payment scheme fit within the green box?

Recent reform of the EU’s Common Agricultural Policy (CAP) has led to a further decoupling of farm support. The EU believes that the new Single Payment Scheme, which replaces the former system of area and headage payments to farmers, tied to production, will qualify for green-box status in the WTO. We examine this contention, particularly in light of the recent WTO panel report on upland cotton.

Implications for food production, land use and rural development of the European Union's Single Farm Payment: Indications from a survey of farmers' intentions in Germany, Portugal and the UK

The 2003 reform of the European Union's (EU) Common Agricultural Policy introduced a decoupled income support for farmers called the Single Farm Payment (SFP). Concerns were raised about possible future land use and production changes and their impact on rural communities. Here, such concerns are considered against the workings of the SFP in three EU Member States. Various quantitative studies that have determined the likely impact of the SFP within the EU and the study countries are reviewed. We present the results of a farm survey conducted in the study countries in which farmers' responses to a decoupling scenario similar to the SFP were sought. We found that little short-term change was proposed in the three, rather different, study countries with only 30% of the farmers stating that they would alter their mix of farm activities. Furthermore, less than 30% of all respondents in each country would idle any land under decoupling. Of those who would adopt a new activity, the most popular choices were forestry, woodland and non-food crops. (c) 2007 Elsevier Ltd. All rights reserved.

Vegetation dynamics in abandoned crop fields on a Mediterranean island: Development of succession model and estimation of disturbance thresholds

This case study on the Sifnos island, Greece, assesses the main factors controlling vegetation succession following crop abandonment and describes the vegetation dynamics of maquis and phrygana formations in relation to alternative theories of secondary succession. Field survey data were collected and analysed at community as well as species level. The results show that vegetation succession on abandoned crop fields is determined by the combined effects of grazing intensity, soil and geological characteristics and time. The analysis determines the quantitative grazing thresholds that modify the successional pathway. Light grazing leads to dominance by maquis vegetation while overgrazing leads to phryganic vegetation. The proposed model shows that vegetation succession following crop abandonment is a complex multi-factor process where the final or the stable stage of the process is not predefined but depends on the factors affecting succession. An example of the use of succession models and disturbance thresholds as a policy assessment tool is presented by evaluating the likely vegetation impacts of the recent reform of the Common Agricultural Policy on Sifnos island over a 20-30-year time horizon. (c) 2006 Elsevier B.V. All rights reserved.

Quantifying the impact of land-use change on European farmland bird populations

The EU has adopted the European Farmland Bird Index (EFBI) as a Structural and Sustainable Development Indicator and a proxy for wider biodiversity health on farmland. Changes in the EFBI over coming years are likely to reflect how well agri-environment schemes (AES), funded under Pillar 2 (Axis 2) of the Common Agricultural Policy, have been able to offset the detrimental impacts of past agricultural changes and deliver appropriate hazard prevention or risk mitigation strategies alongside current and future agricultural change. The delivery of a stable or positive trend in the EFBI will depend on the provision of sufficient funding to appropriately designed and implemented AES. We present a trait-based framework which can be used to quantify the detrimental impact of land-use change on farmland bird populations across Europe. We use the framework to show that changes in resource availability within the cropped area of agricultural landscapes have been the key driver of current declines in farmland bird populations. We assess the relative contribution of each Member State to the level of the EFBI and explore the relationship between risk contribution and Axis 2 funding allocation. Our results suggest that agricultural changes in each Member State do not have an equal impact on the EFBI, with land-use and management change in Spain having a particularly large influence on its level, and that funding is poorly targeted with respect to biodiversity conservation needs. We also use the framework to predict the EFBI in 2020 for a number of land-use change scenarios. This approach can be used to guide both the development and implementation of targeted AES and the objective distribution of Pillar 2 funds between and within Member States. We hope that this will contribute to the cost-effective and efficient delivery of Rural Development strategy and biodiversity conservation targets.

European Union: Shadow WTO agricultural domestic support notifications

The notification of the level of domestic support to the World Trade Organization (WTO) is intended to reflect compliance with obligations entered into at the time of the Uruguay Round. WTO members have often been slow to provide notification of domestic support levels. This makes the process of notification less useful as an indicator of the degree to which changes in policy have or have not benefited the trade system as a whole and exporting countries in particular. The notification of domestic support in the E.U. illustrates the value of a measure that reflects current policies and can therefore act as a basis for negotiation of further disciplines where these are necessary. The E.U. has made major changes in its Common Agricultural Policy (CAP) over the period since 1992 when the MacSharry reforms were implemented. Payments originally notified in the blue box (related to supply control) have over time been changed until in their present form they are unrelated to current production or price levels, and hence can satisfy the criteria for the green box. The E.U. has therefore much more latitude in trade talks to agree to reductions in the allowable trade-distorting support. This paper reproduced the E.U. notifications relating to 2003/04 and extends these with official statistics to the year 2006/07. It then projects forward the components of domestic support until the year 2013/14, based on forecasts of future production and estimates of policy parameters. The impact of a successful Doha Round is simulated, showing that the constraints envisaged in the WTO draft modalities document of May 19, 2008, would be binding by the year 2013, at about the time the next budget cycle in the E.U. starts. Without the Doha Round constraints, further reform might still happen for domestic reasons, but the framework provided by the WTO for domestic policy spending would be less relevant. In that case, much could hinge on the legitimacy of the Single Farm Payment system under the current rules governing the green box.

‘Some Misconceptions about Requirements for the Post-2013 CAP’, ‘Supplementary written evidence’, and minutes of evidence of 19 January

Written evidence, and minutes of evidence, to the House of Commons Select Committee on Environment, Food and Rural Affairs enquiry into The Common Agricultural Policy after 2013

The budget and the WTO: driving forces behind the ‘Health Check’?

The chapter examines the evidence for budget concerns or external (WTO) pressures being the drivers for the 'Health Check' reform of the European Union's common agricultural policy.