AESI Conference, Dublin, Oct. 2010
Plenary Session: CAP 2013
CRE & School of Agriculture, Food & Rural Development
Caveats: Our analysis may be no better
CAP History & Policy Dependency
Source: : EC, DG Ag. & Rural Development, 2009
Strategic Dependency -> CAP origins (early years)
Support Dependency -> CAP Persistence (crisis years)
Programme Dependency -> CAP Resilience (1992 ff Reforms)
CAP Funding History
Source: : Hanniotis, 2009
CAP Support History
PSE% CSE% Coupled PSE% Decoupled PSE%
CAP Reform – the “Consensus”?
Source: HSBC, Forward Planning 2010
CAP Reform – the SFP issue
No academic, independent, or ‘objective’ support for direct
Other than as explicitly targeted and conditional payments
Very unevenly distributed within and between MS
And are already ‘nationalised’ – at least for NMS
SFPs are obsolete - phase them out completely.
“Unless justification (for the SFP) is fully credible, it will not be politically
sustainable. And if it is not politically sustainable, it will not stick, and then the
uncertainty among farmers will persist. But policy uncertainty is just about the
worst thing one can inflict on a sector whose health so much depends on
long-term planning.” Tangermann, 2010
But How can SFPs be phased out or eliminated?
CAP Reform: Key Distributional Issues
CAP spending Agricultural Output Agricultural Land
Agricultural Labour Total Labour (votes)
CAP Reform Debate: Critical Issues
Member state shares could dominate negotiations
Design & Implementation of RD and CARE problematic
‘Simplification’ aspiration endangered
There is no ‘perfect storm’ in prospect for radical reform
CAP Bond - a ‘deal maker’?
CAP Bonds – a way forward?
Elimination of SFPs is Politically impossible
(too many farmers are too dependent on the support)
So, convert the SFP to fixed payments for a fixed term
& convert the fixed payment stream into a Bond
First formally proposed in 1991 (EP, LUFPIG)
echoed in the Buckwell report (1997) of TAA
Failed in 91 (Swinbank & Tranter, 2004) because:
Poor timing & confusing; Lack of coalition building &
Commission fears of re-nationalisation and capitalisation of
CAP Bonds – The Benefits:
Farmers’ present viability secured
But with added flexibility & fungeability
C.f. uncertain phased reduction – eventual elimination?
+ continued debates & efforts to resist reform
Markets adjust & adapt – revealing needs for, e.g.:
Stabilisation and insurance assistance;
Ends support dependency, encourages & assists transition
and development – what more do you want?
Serious negotiations needed about level and distribution of
But currently hopelessly confused by the (absence of)
serious political legitimacy for continued payments
Bonds (fixed level and term of payments) break support &
And provide much needed confidence, capacity and
capability for farmers to adapt and adjust to market realities.
Thanks for your attention. Comments & Questions?