Evaluating agricultural and rural policies: an EU Commission perspective for CAP2020

1. Evaluating agricultural and rural policies: an EU Commission perspective for CAP2020 Tassos Haniotis, Director Economic Analysis, Perspectives and Evaluations DG for Agriculture and Rural Development European Commission

2. CAP reform objectives at a glance Future challenges Economic challenges Environmental challenges Territorial challenges • Food security • Price volatility • Income pressures • GHG emissions • Soil depletion • Water/air quality • Habitats/biodiversity • Vitality of rural areas • EU rural diversity • Inclusive growth CAP2020 reform objectives Sustainable management of natural resources Balanced territorial development Viable food production Equity and balance of support Contribution to Europe 2020 strategy

3. The challenges and risks of CAP reforms The CAP reform process can be viewed as an effort to address: • “Jointness” in the delivery of private and public goods • the consideration of economic sustainability as a prerequisite for environmental and social sustainability in the agricultural sector • The reality of market failures • the need to address risks that could potentially upset the environmental and territorial balance of agricultural production in the EU • The risk of policy failures • the need to ensure an effective and efficient delivery of policy outcomes and the continuation of the reform process

4. The challenges and risks of CAP2020 CAP2020 needs to address a specific set of unique challenges: • A cost-driven commodity price boom • the “baseline” to assess the impact of potential policy changes is full of major uncertainties, mostly of uncertainties outside agriculture

5. Real commodity price indexes… Back to index 5

6. …and their link with EU farm income Source: Eurostat

7. The food supply chain challenge FOOD PRICE CRISIS PRODUCERS’ LAG RETAILERS’ LAG STABILISATION Food producer prices Agricultural commodity prices Food consumer prices Overall inflation (HICP) Source: European Commission – DG Economic and Financial Affairs, based on Eurostat data

8. The challenges and risks of CAP2020 CAP2020 needs to address a specific set of unique challenges: • A cost-driven commodity price boom • the “baseline” to assess the impact of potential policy changes is full of major uncertainties, mostly of uncertainties outside agriculture • A new set of institutional realities • co-decision after the Lisbon Treaty increases the role not just of the EP in the decision process, but also of the wider public in the consultation process

9. The challenges and risks of CAP2020 CAP2020 needs to address a specific set of unique challenges: • A cost-driven commodity price boom • the “baseline” to assess the impact of potential policy changes is full of major uncertainties, mostly of uncertainties outside agriculture • A new set of institutional realities • co-decision after the Lisbon Treaty increases the role not just of the EP in the decision process, but also of the wider public in the consultation process • A parallel process of multiple potential policy decisions • the debate about the future EU budget and prospects for trade agreements takes place in the context of significant gaps in policy-relevant information

10. Evaluating ex-ante the impact of reform Main challenges in assessing the economic, environmental, social and administrative impact of the CAP2020 options: • Option 1 – rebalancing of support • impact on asset values and farm income at MS and within MS needs to be translated into EU-wide economic, environmental and social effects (with budget unknown) • Option 2 – greening • impact of “green” measures in pillar I needs to be assessed by taking account of its cost, benefits and link to pillar II • Option 3 – environmental focusing • Shift of support exclusively to pillar II measures needs to assess increased benefits in some of EU territory against costs and risks across the whole EU

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

12. Distribution of direct aids to the producers – EU-27 (in 2008 Financial year) Source: European Commission - DG Agriculture and Rural Development

13. Evaluating ex-ante the impact of reform Main challenges in assessing the economic, environmental, social and administrative impact of the CAP2020 options: • Option 1 – rebalancing of support • impact on asset values and farm income at MS and within MS needs to be translated into EU-wide economic, environmental and social effects (with budget unknown) • Option 2 – greening • impact of “green” measures in pillar I needs to be assessed by taking account of its cost, benefits and link to pillar II • Option 3 – environmental focusing • Shift of support exclusively to pillar II measures needs to assess increased benefits in some of EU territory against costs and risks across the whole EU

14. Greening of the CAP: objective Enhanced cross compliance

15. Evaluating ex-ante the impact of reform Main challenges in assessing the economic, environmental, social and administrative impact of the CAP2020 options: • Option 1 – rebalancing of support • impact on asset values and farm income at MS and within MS needs to be translated into EU-wide economic, environmental and social effects (with budget unknown) • Option 2 – greening • impact of “green” measures in pillar I needs to be assessed by taking account of its cost, benefits and link to pillar II • Option 3 – environmental focusing • Shift of support exclusively to pillar II measures needs to assess increased benefits in some of EU territory against costs and risks across the whole EU

16. The different weight of RD measuresCAP expenditure between pillars (in 2009) Source: European Commission - DG Agriculture and Rural Development

17. Thank you