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The EU Common Agricultural Policy and the interest of Polish agriculture

Sebastian Stępień, PhD Poznań University of Economics Department of Macroeconomics and Food Economy. The EU Common Agricultural Policy and the interest of Polish agriculture Dijon, October 2011 . The aim of presentation.

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The EU Common Agricultural Policy and the interest of Polish agriculture

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  1. Sebastian Stępień, PhDPoznań University of EconomicsDepartment of Macroeconomics and FoodEconomy The EU CommonAgricultural Policy and theinterest of Polishagriculture Dijon, October 2011

  2. Theaim of presentation • The aimof the presentation is to identify possible changes in the Common Agricultural Policy and consequences for Polish agriculture

  3. A few words about the impact of EU membership… • ratio of receipts under the CAP to the Polish contribution to the EU budget amounted to over 1.5 • increase the level of support for agriculture • increase thevalue of production and inagriculturalincome • modernization of foodsector • a positive balance of food trade

  4. Table 1. Changesinagricultureincomein Poland intheyears 2003-2008 Source: Goraj L. (b), Wpływ Wspólnej Polityki Rolnej na dochody polskich gospodarstw rolnych, IERiGŻ, Warszawa 2009.

  5. Conditions for CAP reform • large disparities in the redistribution of money, primarily in the field of direct payments, • need to link support withthe provision of public goods and environmental protection, • improving the competitiveness of EU agriculture in the international arena, • securing food security in the EU and the world, • guaranteeing farmers a fair standard of living and maintaining the vitality of rural areas.

  6. Issue of directpayments • Three important questions involved: • the purpose of payment, • the shape of the system • the redistribution of resources • The span between the highest rate of payment per unit area of ​​agricultural land (802 euro/ha for Malta), and lowest (95 euro/ha for Latvia) is over 700 euros.

  7. Figure 1. Directpayments per ha AA and per farm in 2013 Source:Assessment of the impact of the CAP until 2020 - project (typescript), European Commission, Brussels 2011

  8. CAP reform scenarios • Status quo – base for otherscenarios • Adjustment • Integration • Re-focus

  9. Adjustment • continuation of the CAP policy, with a further, gradual changes, • redistribution of direct payments in accordance with criteria showing the level of income support and the role of public goods and diversifyeconomic conditions, • Minimum level of directpaymentinrelation to averagepaymentinthe EU (eg. 90%),

  10. Adjustment • simplification of market intervention mechanisms, and maintaining a safety net against unforeseen declines in prices and farm income, • increase spending on environmental and climate change mitigation under the rural development policy.

  11. Integration • multilayerpayments: • basic payment per hectare, lower than at present (cross compliance required), • payment for farms located in less-favoredareasorin high natural valuesareas, • additional componentsensitive to environmental issues (tasksrelated to climate change or organicproduction),

  12. Integration • more complex environmental services supported within the policy for rural development (including efficient use of resources, the development of sustainable production and use of renewable energy sources, reduce greenhouse gas emissions in agriculture, protection and development of ecosystems), • instruments to support the creation and operation of farmsorganisations (horizontal and verticalintegration, cooperationetc.) • tools for risk management • smallfarmerssupport - minimum level of payment

  13. Re-focus • budget for the CAP significantly reduced, • the remaining funds directed to the taskrelated to environment and climate change in the framework of the second pillar of CAP, • resignation from the system of direct payments and market intervention (except for crisis) • rural development by the cohesion policy and structural funds

  14. CAP reform – position of EuropeanCommission (October 2011) The legal proposals areaccompanied by an impactassessment that evaluates alternative scenarios for theevolution of Thepolicy on the basisof extensive quantitative and qualitativeanalysis. Most of solutionsconsistentwiththe scenario „Integration”

  15. How will the CAP be financed? Source: The CAP towards 2020. Legal proposals, EuropeanCommission, DG Agri, Brussels 2011.

  16. New shape of directpayments

  17. Figure 2. Changesindirectpaymnets – EuropeanCommissionproposal Source: The CAP towards 2020. Legal proposals, EuropeanCommission, DG Agri, Brussels 2011.

  18. Figure 3. Directpayments: 2013 level and model „90% minimum” Source: MottersheadD., Allocation of Direct Payments, Department for Environment, Food andRuralAffairs, London 2011.

  19. Figure 4. Changeindirectpayments – agriculturalarea and laborcriteria Source: MananaN., Direct payments in the CAP 2020: Distribution criteria, Ministry of Agriculture –Office for Planning and Policies, Lisbon 2011.

  20. CAP changes and theresults for Poland

  21. CAP changes and theresults for Poland

  22. Thankyou for yourattention

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