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Tata, 22-24 April, 2010

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 Foundation of Assistance Programmes for Agriculture FAPA Agricultural Policy Analysis Unit, Warsaw. Needs of the Sector.

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Tata, 22-24 April, 2010

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  1. 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 Foundation of Assistance Programmes for Agriculture FAPA Agricultural Policy Analysis Unit, Warsaw

  2. 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 • Europe’s agriculture is unsustainable economically, but has good natural conditions to produce.

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

  4. 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.

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

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

  7. 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.

  8. Support for agriculture in selected New Member States in years 1986-2003 compared the UE (PSE) OECD

  9. 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

  10. 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.

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