1. AESI Conference, Dublin, Oct. 2010 Plenary Session: CAP 2013 David Harvey CRE & School of Agriculture, Food & Rural Development AESI Conference, Dublin, Oct. 2010 Plenary Session: CAP 2013 David Harvey CRE & School of Agriculture, Food & Rural Development

2. Caveats: Our analysis may be no better than yours

3. CAP History & Policy Dependency Source: : EC, DG Ag. & Rural Development, 2009  Strategic Dependency -> CAP origins (early years)  Support Dependency -> CAP Persistence (crisis years)  Programme Dependency -> CAP Resilience (1992 ff Reforms) Source: : EC, DG Ag. & Rural Development, 2009  Strategic Dependency -> CAP origins (early years)  Support Dependency -> CAP Persistence (crisis years)  Programme Dependency -> CAP Resilience (1992 ff Reforms)

4. CAP Funding History  Source: : Hanniotis, 2009

5. CAP Support History Source: OECD

6. CAP Reform – the “Consensus”?  Source: HSBC, Forward Planning 2010

7. CAP Reform – the SFP issue  No academic, independent, or ‘objective’ support for direct payments  Other than as explicitly targeted and conditional payments  Very unevenly distributed within and between MS  And are already ‘nationalised’ – at least for NMS  SFPs are obsolete - phase them out completely. “Unless justification (for the SFP) is fully credible, it will not be politically sustainable. And if it is not politically sustainable, it will not stick, and then the uncertainty among farmers will persist. But policy uncertainty is just about the worst thing one can inflict on a sector whose health so much depends on long-term planning.” Tangermann, 2010  But How can SFPs be phased out or eliminated?  No academic, independent, or ‘objective’ support for direct payments  Other than as explicitly targeted and conditional payments  Very unevenly distributed within and between MS  And are already ‘nationalised’ – at least for NMS  SFPs are obsolete - phase them out completely. “Unless justification (for the SFP) is fully credible, it will not be politically sustainable. And if it is not politically sustainable, it will not stick, and then the uncertainty among farmers will persist. But policy uncertainty is just about the worst thing one can inflict on a sector whose health so much depends on long-term planning.” Tangermann, 2010  But How can SFPs be phased out or eliminated?

8. CAP Reform: Key Distributional Issues

9. CAP Reform Debate: Critical Issues  Member state shares could dominate negotiations  Design & Implementation of RD and CARE problematic  ‘Simplification’ aspiration endangered  There is no ‘perfect storm’ in prospect for radical reform  CAP Bond - a ‘deal maker’?

10. CAP Bonds – a way forward?  Elimination of SFPs is Politically impossible  (too many farmers are too dependent on the support)  So, convert the SFP to fixed payments for a fixed term  & convert the fixed payment stream into a Bond  First formally proposed in 1991 (EP, LUFPIG)  echoed in the Buckwell report (1997) of TAA  Failed in 91 (Swinbank & Tranter, 2004) because:  Poor timing & confusing; Lack of coalition building & Commission fears of re-nationalisation and capitalisation of support

11. CAP Bonds – The Benefits:  Farmers’ present viability secured  But with added flexibility & fungeability  C.f. uncertain phased reduction – eventual elimination?  + continued debates & efforts to resist reform  Markets adjust & adapt – revealing needs for, e.g.:  Stabilisation and insurance assistance;  Environmental payments  Ends support dependency, encourages & assists transition and development – what more do you want?

12. Conclusions  Serious negotiations needed about level and distribution of SFPs anyway  But currently hopelessly confused by the (absence of) serious political legitimacy for continued payments  Bonds (fixed level and term of payments) break support & programme dependencies  And provide much needed confidence, capacity and capability for farmers to adapt and adjust to market realities.

13. The Solution? Thanks for your attention. Comments & Questions?