1. Ⓒ Olof S. 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. 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 Equity and balance of support Contribution to Europe 2020 strategy Viable food production Sustainable management of natural resources Balanced territorial development CAP2020 reform objectives

3. 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. 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. 55 Real commodity price indexes… Back to index

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

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

8. 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. 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. 10 Evaluating ex-ante the impact of reform

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

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

13. 13 Evaluating ex-ante the impact of reform

14. 14 Greening of the CAP: objective A greener CAP within Resource Efficient Europe (Europe 2020) Greener Direct Payments Stronger Rural Development Enhanced cross compliance

15. 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. 16 Source: European Commission - DG Agriculture and Rural Development The different weight of RD measures CAP expenditure between pillars (in 2009)

17. 17 Thank you