The CAP reform process in perspective: issues of the post-2013 debate

1. The CAP reform process in perspective:issues of the post-2013 debate Carina Folkeson Directorate for Economic Analysis, Perspectives and Evaluations DG for Agriculture and Rural Development European Commission

2. The long-term CAP perspective The general context of the CAP debate The question about “P” in the CAP The question about the "C" in the CAP The debate about the two pillar structure of the CAP The post HC context of the CAP debate Volatility in agricultural production and prices Impact of the economic crisis on agriculture Food security in the context of climate change and limited resources The institutional context of the CAP debate New European Parliament and Commission Lisbon Treaty WTO prospects

3. The CAP debate at a glance Economic crisis Climate change Budget

4. summer rainfall storms, floods growing seasons, crop potential pests • floods hotter and drier summers summer drought  forage  sea levels • floods hotter and drier summers crop yields, range  forage  sea levels winter rainfall (floods) summer rainfall  drought, water stress  Soil erosion yields, range of crops  Warming water availability  drought risk  yields  suitable crop areas Different regional impacts from Climate Change

5. The CAP debate at a glance Economic crisis Climate change Budget

6. EU developments in agricultural income(agricultural income/AWU in real terms) EU-12 EU-15 Source: Eurostat

7. Evolution of agricultural income as a share ofaverage income in the economy Source: European Commission - DG Agriculture and Rural Development, based on Eurostat data on national and agricultural accounts. *EU-15 average calculated with: EL, ES, FR, IT, NL, AT, PT; EU-10 average calculated with: CZ, EE, HU, PL, SK; EU-25 average = EU-15 + EU-10 countries.

8. The CAP debate at a glance Economic crisis Climate change Budget

9. CAP budget trends in perspective Source: European Commission – DG Agriculture and Rural Development

10. CAP expenditure and CAP reform path EU-10 EU-12 EU-15 EU-25 EU-27 Source: European Commission – DG Agriculture and Rural Development

11. Markets Modulation The CAP and the budget Pillar I Direct payments Pillar II Rural Development

12. The CAP debate at a glance Economic crisis Climate change Budget

13. Direct payments Markets Income Public goods Rural development Structural adjustment The CAP debate at a glance Economic crisis Climate change Budget

14. Direct payments Markets Income Risk management Food chain issues Market instruments Public goods Rural development Structural adjustment The CAP debate at a glance Economic crisis Climate change Budget

15. Cumulative reductions in EU price support Source: European Commission - DG Agriculture and Rural Development

16. The evolving role of EU support prices - wheat Sources: European Commission- DG Agriculture and Rural Developmentand World Bank

17. Impact of CAP reforms on EU net production surplus Sources: European Commission – Eurostat and DG Agriculture and Rural Development

18. Long-term price evolution along the food supply chain Food consumer prices Overall inflation (HICP) Agricultural commodity prices Food producer prices Source: European Commission – DG Economic and Financial Affairs, based on Eurostat and Agriview data

19. Direct payments Markets Income Risk management Food chain issues Market instruments Public goods Rural development Structural adjustment The CAP debate at a glance Economic crisis Climate change Budget

20. Direct payments Markets Income Risk management Food chain issues Basic rate GAEC Market instruments Other criteria Public goods Rural development Structural adjustment The CAP debate at a glance Economic crisis Climate change Budget

21. Average payments per ha Source: European Commission – DG Agriculture and Rural Development

22. Share of DP and total subsidies in agricultural income EU-15 EU-12 Source: European Commission – DG Agriculture and Rural Development

23. Recent evolution of agricultural input and output prices Source: Eurostat

24. Direct payments Markets Income Risk management Food chain issues Basic rate GAEC Market instruments Other criteria Public goods Rural development Structural adjustment The CAP debate at a glance Economic crisis Climate change Budget

25. Direct payments Markets Income Risk management Food chain issues Basic rate GAEC Market instruments Other criteria Public goods Rural development Structural adjustment Innovation Environment Territory The CAP debate at a glance Economic crisis Climate change Budget

26. The three 2007-2013 RD thematic axes in the MS Source: European Commission - DG Agriculture and Rural Development

27. Direct payments Markets Income Risk management Food chain issues Basic rate GAEC Market instruments Other criteria Public goods Rural development Structural adjustment Innovation Environment Territory The CAP debate at a glance Economic crisis Climate change Budget

28. For further information • The CAP after 2013 http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm • EU agriculture and CAP reform http://ec.europa.eu/agriculture/index_en.htm • Economic Analysis and Evaluation http://ec.europa.eu/agriculture/analysis/index_en.htm • Agricultural Policy Analysis and Perspectives http://ec.europa.eu/agriculture/analysis/perspec/index_en.htm

29. Thank you