The costs of the CAP Economics of Food Markets Lecture 16 Alan Matthews.

Slides:



Advertisements
Similar presentations
The CAP reform process in perspective: issues of the post-2013 debate Tassos Haniotis, Director Directorate for Economic Analysis, Perspectives and Evaluations.
Advertisements

CAP Reform Ref: CAPreform feb07.
Irelands Economic outlook David Duffy. The Outlook Dependent on world trade growth If forecast recovery materialises then Irish growth will improve in.
Jozsef Popp Director Research Institute for Agricultural Economics Budapest „Vision of long-term agricultural and rural development in the EU” May 25-26,
Money is the measure On the other hand… Macroeconomics is the study of how the economy operates as a whole – more than simply the sum of all markets.
CAP Perspectives in the light of WTO Dirk Ahner Directorate General for Agriculture and Rural Development Prague, 26 May 2006 Visions of long-term agricultural.
Sample exam paper Economics of Food Markets Alan Matthews.
CAP Second Pillar: From structural policies to rural development Lecture 15. Economics of Food Markets Alan Matthews.
Measurement of Farm Incomes Economics of Food Markets Lecture 4 Alan Matthews.
Global food markets Economics of Food Markets Lecture 2 Alan Matthews.
EC 355 International Economics and Finance
Price policy interventions in a large open economy Lecture 23 Economics of Food Markets Alan Matthews.
Price policy interventions in a large open economy Lecture 17. Economics of Food Markets Alan Matthews.
The CAP: origins, institutions and financing Economics of Food Markets Lecture 7 Alan Matthews.
CAP Second Pillar: From structural policies to rural development Lecture 10. Economics of Food Markets Alan Matthews.
Ⓒ Olof S. Evaluating agricultural and rural policies: an EU Commission perspective for CAP2020 Tassos Haniotis, Director Economic Analysis, Perspectives.
Decoupling of direct payments Lecture 9. Economics of Food Markets Alan Matthews.
Lecture 11. Analysis of decoupling Economics of Food Markets Alan Matthews.
EU farm policy until the Uruguay Round Niek Koning Agricultural Economics and Rural Policy.
Agricultural policy objectives Measurement of support Economics of Food Markets Lecture 6 Alan Matthews.
CAP Reform – the Luxembourg Agreement 2003 and Decoupling Lecture 9. Economics of Food Markets Alan Matthews.
Quantifying the impacts of agricultural trade liberalisation Lecture 23 Economics of Food Markets Alan Matthews.
Agricultural policy objectives Measurement of support Economics of Food Markets Lecture 6 Alan Matthews.
Price policy analysis in an open economy setting Economics of Food Markets Lecture 14 Alan Matthews.
Transfer efficiency of agricultural price support policies Economics of Food Markets Lecture 15 Alan Matthews.
CAP reforms Economics of Food Markets Lecture 8 Alan Matthews.
Directorate for Food, Agriculture and Fisheries ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION DE COOPÉRATION ET DE DEVELOPMENT ÉCONOMIQUES.
How is the budget raised The own resource system – The overall amount of own resources needed to finance the budget is determined by total expenditure.
The CAP: origins, institutions and financing Economics of Food Markets Lecture 7 Alan Matthews.
Alan Matthews UNECE Executive Forum May 2004 Implications of enlargement for agricultural trade Alan Matthews Trinity College Dublin Ireland.
Economics of Food Markets Course revision. Resources Course outline (revised Jan 2007) Course website Lecture summaries on the web Powerpoint slides Lecture.
Common Agricultural Policy (CAP)
The reform of the CMO Fruit & Vegetables – Better policy for a stronger Sector PROGNOSFRUIT 2007 Vilnius, Lithuania DG Agri/C.2.
Ministry of Agriculture LATVIA Agricultural reform in Europe: 2013 and beyond May 14, 2008 Tallinn.
Common Agricultural Policy
How the EU is financed EU spends around €140 billion euro per year across the Member States All Member States contribute to the EU budget In 2011, Ireland’s.
Sándor Richter Fiscal and financial aspects of EU enlargement The Vienna Institute for International Economic Studies.
The Common Agricultural Policy and its impact on the developing countries.
Trading patterns within the EU Trading patterns between the EU and other markets Irish trading patterns and how joining the EU influenced the Irish economy.
TRADE THEORY National Income Accounting Comparative Advantage Trade Agreements.
Farm policy reform: the European experience Dan Rotenberg, Counselor - Agriculture Delegation of the European Commission to the U.S. Domestic and trade.
Government Intervention in the Market. Government Intervention in the Market The Control of Prices.
The CAP reform process in perspective: issues of the post-2013 debate Tassos Haniotis, Director Directorate for Economic Analysis, Perspectives and Evaluations.
Food Production and Markets IB Geography II. Close Reading Activity Take the next 10 minutes to Read and Annotate “The Parable of the Golden Snail”
Key Players in EU Policy Making § The COMMISSION ( in principle independent) – Has sole right of proposal § The COUNCIL OF MINISTERS ( the member states.
Chapter 8: Common Agricultural Policy
Ⓒ Olof S. Communication on the future of the CAP “The CAP towards 2020: meeting the food, natural resources and territorial challenges of the future” DG.
OECD World Forum “Statistics, Knowledge and Policy”, Palermo, November
Global food markets Economics of Food Markets Lecture 2 Alan Matthews.
Common Agricultural Policy European Economics Topic 3.
European Union support to the Ukraine Bratislava, 3 June 2016 Livia Vasakova, EC Representation in Slovakia.
Quotas A physical limit on the quantity of the good imported. Increases the share of the market available for domestic producers.

INTERNATIONAL FINANCE
The EU’s Common Agricultural Policy and Lessons learned for the Future
The EU’s CAP and the likely impact of a Doha Agreement
Study Unit 6 Ms. K Amusa.
The Circular Flow of Income
EU Influences on the Irish Economy
Aims of the Common Agricultural Policy
The Producer Support Estimate
The EU-added value of the CAP
Financial Sector (continued)
Price policy analysis in an open economy setting
CH.20 International Trade
Public spending on family benefits includes financial support that is exclusively for families and children. The OECD* family database includes three types.
CAP 2020 Consultation Process – Public Meeting Dr Kevin Hanrahan Rural Economy Development Programme Teagasc.
Presentation transcript:

The costs of the CAP Economics of Food Markets Lecture 16 Alan Matthews

Lecture objectives To highlight the uneven impact of CAP costs and benefits across EU member states To understand how this arises because of the common financing of the CAP To discuss the benefits of the CAP for Ireland

Source: Zanias 2003 Who benefits from the CAP?

Why the issue arises Financial solidarity – one of the three principles of the CAP –Budget costs of the CAP financed in common by the FEOGA Guarantee budget –Consumer costs of the CAP paid by EU consumers, not only by domestic consumers The budget effect The preferential trade effect

P Q DS PwPw P eu abc d e Intra-EU exports Extra-EU exports Trade transferBudget transfer

Implications for CAP reform Note that the uneven incidence of CAP costs and benefits complicates the process of CAP reform –Net beneficiaries want to hold on to benefits, and vice versa McSharry reform transferred resources from countries with large (food) consumption share to countries with large budget share Luxembourg Agreement simply copperfastened the existing distribution of payments –Even modulated payments must be largely spent in the country from which they originate

Distribution of direct payments by member state

Empirical studies Importance of the counterfactual –Is policy change renationalisation of agricultural policy or move to free trade? Problems in measuring the preferential trade effect –Make use of OECD Producer Support Estimate figures Zanias study based on following equation Note that this study is based on measuring transfers, not the real income cost of the CAP

Distribution of direct payments between farmers

Reading Zanias Commission 1994 Baldwin 2005