1. Assessing the Impact of CAP Reforms: policy issues and research challenges AgSAP Conference Egmond aan Zee, 10-12 March 2009 Tassos Haniotis Head of Unit, Agricultural Policy Analysis and Perspectives DG for Agriculture and Rural Development European Commission

2. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 2 Outline  Recent experiences with Research and the CAP policy agenda  The CAP reform process in perspective  Key policy questions in the CAP policy debate  Challenges and opportunities for Research

3. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 3 The HC Impact Assessment experience  The starting point –Description of existing policies and situation –Identification of issues to be addressed in the HC  Developing the policy options –Status-quo used as reference scenario (“baseline”) –The scope of alternative options (the selection process) –Limitations and constraints (the political context)  Impact analysis and results –Main IA Report and its characteristics –Background and the various Annexes The role of internal AGRI analysis The role of external studies and evaluations (the role of Scenar2020)

4. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 4 The analytical tools of the Impact Assessment  The scope of quantitative analysis –Econometric models to assess impact on markets from: changes in cereal intervention and set-aside abolition phasing-out of dairy quotas –Microeconomic static analysis to assess impact on farm margins from: further decoupling impact from market measures (cereals, dairy) flatter rates and payment limitations –Statistical analysis to assess impact from: payment limitations and modulation risk management tools  The scope of qualitative analysis –To assess the impact of changes in cross-compliance –To assess suitability of RD measures related to new challenges

5. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 5 Lessons from the HC Impact Assessment  Extent and scope –Limitations of scope driven by relevant institutional realities –Same realities need to be addressed by Research Community  Methodology –Qualitative assessment more “popular” to policy makers –Quantitative analysis requires clear, updated baseline –Link of legal proposals to results much stronger than ever before  Dissemination of results –External studies form integral part of IA –AGRI analysis often ignored by Research Community –Policy relevance of results essential

6. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 6 The CAP reform process in perspective  The recent past: CAP radically reformed its policy orientation –Mainly decoupled direct support, subject to a “baseline” (cross-compliance) –Significantly reduced price intervention mechanisms –More targeted Rural Development policy (both funds and policy instruments)  The present context –Significant increase/decline in food prices re-focused attention on agriculture –“Health Check” policy questions relevant to future CAP reform process  The debate about the future of the CAP –The balance between the “C” and the “P” of the CAP and its link to the EU budget –Main impact of no policy was found to be territorial and environmental (Scenar2020) –Balance between “two pillars” and three axes of the CAP at the core of debate

7. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 7 Where do we go from here? EU-10EU-12EU-15EU-25EU-27

8. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 8 Key policy questions for the future CAP debate

9. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 9 The evolving role of EU support prices - wheat Beginning of reform Note: Years are marketing years.Sources: DG AGRI and Global Insight (IMF).

10. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 10 The evolving role of EU support prices - butter Beginning of reform Note: Years are marketing years.Sources: DG AGRI and FAO.

11. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 11 Potential impact of an EU-wide revenue scheme

12. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 12 Key policy questions for the future CAP debate

13. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 13 Average level of farm direct payments in the EU-25 Source: AGRI-L1 calculations from DG AGRI, DG Budget data

14. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 14 Share of EU payments in GDP - 2007

15. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 15 Key policy questions for the future CAP debate  Market prospects and issues related to product safety-nets –Challenges from the economic crisis and its long-term impact –Instruments of safety-net intervention and their relevance  Direct support and issues related to producer safety-nets –Rebalancing support within and among Member States –Extent and scope of income support –Targeting of support for public goods and its link to a “baseline” –The relationship between private goods and public goods and the issue of “jointness”  Adjustment challenges and the reform process –The three axes of RD policy and the nature of their link with other CAP instruments –Balance and tensions between competitiveness, environment and the rural economy

16. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 16 Challenges and opportunities for Research  Commonality of issues analysed, diversity of approaches  The uneasy relationship between methodology and results  The policy relevance of addressed questions  Communication of results

17. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 17 Challenges and opportunities for Research Thank You !

18. T. HaniotisAgSAP – Egmond aan Zee, 10-12 March 2009 18 For further information  CAP Health Check http://ec.europa.eu/agriculture/healthcheck/index_en.htm  EU agriculture and CAP reform http://ec.europa.eu/agriculture/index_en.htm  Economic Analysis and Evaluation http://ec.europa.eu/agriculture/analysis/index_en.htm  Agricultural Policy Analysis and Perspectives http://ec.europa.eu/agriculture/analysis/perspec/index_en.htm