The project has received funding from the European Union. The Dilemma of Targeting Support with CAP post 2013 Tata, 22-24 April, 2010 Wanda Chmielewska-Gill.

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Presentation transcript:

The project has received funding from the European Union. The Dilemma of Targeting Support with CAP post 2013 Tata, April, 2010 Wanda Chmielewska-Gill Foundation of Assistance Programmes for Agriculture FAPA Agricultural Policy Analysis Unit, Warsaw

Needs of the Sector Heavy dependence on public support Growing volatility difficult to manage - in prices and costs - desease and weather related Burden of regulation on farming sector R&D needs - to revive faltering productivity growth - to reduce negative environmental impacts NMS- to catch up Diversity within and between MS extent of CAP help Europes agriculture is unsustainable economically, but has good natural conditions to produce.

Targeted policy Policy measure that targets specific outcomes, populations or areas. It requires: - identification of target actions, - target groups, - target area. (OECD)

Implementing targeted payments Contract with a farmer Clearly defined objectives Period of time (5-10 years) Cannot be inherited Effects measured (control) Auctions can work under specific contitions Not all farmers would receive payments Transaction costs can be high.

Costs and benefits of target policy Targeted policy Transfers to specific objectives Significant implementation costs Adjusted to costs Broad based policy Transfer per hectare or per farm, per product May be simple/cheap Not adjusted. Overcompensation influences land prices.

Land prices (eur/hectare) Eurostat, RIAE Bulletin, 2007

Targeting helps competitiveness if it affects: Investment improving efficiency, income diversification, Investment into human capital, Investment into value added (processing, marketing), Investment into cost reductions.

Support for agriculture in selected New Member States in years compared the UE (PSE) OECD

Targeting in 1 Pillar 85% of SPS funds go to the 17% of farmers who have 80% of land ( Agra Europe Weekly, 6 March 2009). - Capping - Modulation - Zoning instead of contracts? Targeting 2 Pilar easier

Conclusions Slow changes towards targeted instruments in the present CAP, particularly in RDP; Not everybody will get support; More efficient than present instruments Keeps land prices lower; Difficult and costly to implement.