A "greener" CAP an ever greater need for agri-environmental indicators Working Group "Agriculture and Environment" of the Standing Committee for Agricultural Statistics Luxembourg, 18-19 February 2013 Gesa Wesseler Team Leader, Rural Development Analyses DG Agriculture and Rural Development European Commission

Outline The CAP reform in a nutshell – challenges, objectives and measures What is "Greening"? New framework for monitoring and evaluation Proposed indicators – links with AEIs

Historical development of the CAP Productivity Competitiveness Sustainability The Early Years The Crisis Years The 1992 Reform Agenda 2000 CAP reform 2003 CAP Health Check 2008 Food security Improving productivity Market-stabilisation Product support Over production Exploding expenditure International friction Structural measures Reduced surpluses Environment Income stabilisation Budget stabilisation Deepening the reform process Competiti-veness Rural development Market orientation Consumer concerns Rural Development Environment Simplification WTO compatibility Reinforcing 2003 Reform New challenges Risk management

CAP reform 2013: What are the challenges for agriculture… Economic challenges Food security Price variability Economic crisis Environmental challenges GHG emissions Soil depletion Water/air quality Territorial challenges Vitality of rural areas Diversity of EU agriculture Economic Environmental challenges GHG emissions Soil depletion Water/air quality Habitats and biodiversity Environmental Territorial

… and how will the CAP address them? Commission Communication ‘The CAP towards 2020’ Legal proposals Policy objectives Challenges Reform objectives Europe 2020 Viable food production Economic Enhanced competitiveness Sustainable management of natural resources and climate action Environmental Improved sustainability Balanced territorial development Territorial Greater effectiveness Simplification

What CAP instruments to meet the reform objectives? Enhanced competitiveness Improved sustainability Greater effectiveness Improved economic tools to address market developments Crises reserve / Risk management toolkit Improved position of farmers in the food supply chain Research, innovation and knowledge transfer and an improved Farm Advisory System New ‘green’ payment in Pillar I Enhanced cross compliance for climate change Two environmental priorities for rural development Research, innovation and knowledge transfer and an improved Farm Advisory System Redesign of direct payments Common strategic framework for EU funds Redistribution of direct payments across and within Member States Allocation of rural development envelopes Simplification of the policy Pillar I Pillar II Flexibility

The new greening architecture of the CAP Agricultural Research Implementation mechanism European Innovation Partnership Farm Advisory System Voluntary with compensation for cost incurred and income forgone Rural development Mandatory with financial support (decoupled “green” payment per hectare) Cumulative environmental benefits Green direct payments Cross compliance Regulatory (Statutory Management Requirements and Good Agricultural Environmental Conditions) Agricultural area (eligible for direct payments)

The proposed green direct payment Crop diversification on arable land: Avoid big intensive monocultures often detrimental to the environment At least 3 crops (min 5% and max 70% of the arable land) Annual obligation (not pluriannual crop rotation) Preservation of permanent grassland: Permanent grasslands are among the main carbon sinks At farm level (5 % flexibility) Ecological Focus Areas (on arable land and permanent crops): Restoring biodiversity and landscapes At least 7 % of the relevant eligible hectares should be EFAs Landscape features, buffer strips, terraces, fallow land, certain afforested land, etc.

Environmental benefits of the green payment Measures Permanent grassland Ecological focus area Crop diversification Soil Water Biodiversity habitats Landscape Climate change mitigation Environmental benefits Strong impact Medium impact Medium to strong impact Low impact

Breaking news: Greening in the Council conclusions on the next MFF (7 Breaking news: Greening in the Council conclusions on the next MFF (7./8. Feb 2013) Financed by 30% of annual national ceilings Clearly defined flexibility for Member States relating to the choice of equivalent greening measures Implementation of ecological focus area should not require the land in question to be taken out of production Next: MFF discussions in the European Parliament Discussions and votes on the CAP reform proposals in the Council and European Parliament Detailed provisions in implementing acts Full implementation: 2015?

New framework for monitoring and evaluation of the CAP Monitoring and evaluation of common agricultural policy: "A common monitoring and evaluation framework shall be established with a view to measuring the performance of the common agricultural policy" (Article 110 of the "horizontal" Regulation on the financing, management and monitoring of the common agricultural policy)

Intervention logic for the CAP CAP general objectives Viable food production Sustainable management of natural resources and climate action Balanced territorial development CAP specific objectives CSF* thematic objectives Enhance farm income Improve agricultural competitiveness Maintain market stability Foster innovation Promote socioeconomic development of rural areas Meet consumer expectations Provide environmental public goods Pursue climate change mitigation and adaptation Maintain agricultural diversity across the EU Pillar I specific objectives Pillar II specific objectives 12 *CSF: Common Strategic Framework including the EFRD, ESF, CF, EAFRD and EMFF

Types of indicators Context indicators CAP general objectives Impact indicators CAP specific objectives Result indicators Situation & trends Pillar I instruments & Pillar II measures Output indicators 13

Timing, reporting and geographical level New CAP implementation now likely by 2015 => need to have baseline data before then! Impact indicators for Pillar 1 will be measured at national level. Reporting will be done by the Commission (for the whole CAP). For Pillar 2, the relevant geographical level will depend on the type of programme (national / regional). Reporting at programme level will be done by the Member States.

Proposed impact indicators General objective: Viable food production Agricultural entrepreneurial income Agricultural factor income Agricultural productivity EU commodity price variability Consumer price evolution of food products Agricultural trade balance General objective :Sustainable management of natural resources & climate action General objective : Balanced territorial development Rural employment rate Degree of rural poverty Rural GDP per capita GHG emissions from agriculture Farmland birds index HNV Farming Water abstraction in agriculture Water quality Soil quality: Soil organic matter Soil erosion ~ AEI 19 ~ AEI 25 ~ AEI 23 ~ AEI 20 ~ AEI 27 ~ AEI 26 ~ AEI 21

Impact indicators vs. AEIs 7. GHG emissions from agriculture: net GHG emissions from agriculture including agricultural soils (cropland and grasslands); 8. Farmland birds index: no differences in the definitions but some improvements needed 9. HNV Farming: methodologies and data sources may differ among MSs. 10. Water abstraction in agriculture: FSS data on the "volume of water used for irrigation" are proposed as potential/preferred data source.

Impact indicators vs. AEIs 11. Water quality: different alternative AEI indicators are proposed and under discussion with MSs (1. GNB or 2. Nitrates in freshwater) 12. Soil quality: the "Soil organic matter" is proposed as indicator. 13. Soil erosion: same definitions, need for data. For all indicators: Need for improvement of their geographical level and aggregation.

Thank you!