Productivity and Convergence in European Agriculture

We investigate relative productivity levels and decompose productivity change for European agriculture between 2004 and 2013. Specifically (i) we contribute to the debate on whether agricultural Total Factor Productivity (TFP) has declined or not in the European Union (EU); (ii) we compare the relative TFP level across EU Member States and investigate the difference between ‘old’ Member States (OMS, i.e. the EU‐15) and ‘new’ Member States (NMS); and (iii) we test whether TFP is converging or not among Member States. The empirical analysis applies an aggregate quantity framework to country‐level panel data from the Economic Accounts for Agriculture for 23 EU Member States. The results imply that TFP has slightly decreased in the EU over the analysed period; however there are significant differences between the OMS and NMS and across Member States. Finally, our estimates suggest that productivity is generally converging over this period, albeit slowly.     

Drivers of vertical intra‐industry trade: the case of the Hungarian agri‐food sector

This article investigates the drivers of vertical intra‐industry trade (VIIT) in Hungarian agri‐food trade with the European Union (EU). It identifies three possible ways to measure intra‐industry trade (IIT) flows (GHM, FF, and N methods) and defines six hypotheses to test for the drivers of VIIT with three panel data models (static, dynamic, and FEVD). The results suggest that factor endowments are negatively, while economic size is positively and significantly related to VIIT. Distance and VIIT were found to be negatively related as is commonly the case in the standard gravity model. It was also found that VIIT is greater if a New Member State (NMS) is exporting agri‐food produce to an NMS, while EU accession has ambiguously influenced the share of VIIT. In general, it seems that our results are independent from model estimations and interestingly they do not differ considerably as we a priori expected. Moreover, our results seem surprisingly robust across various measurements of ITT.     

Catching Up or Falling Behind in European Agriculture: The Case of Milk Production

The paper explores and analyses the catching up and falling behind processes in the European dairy sector over the period 2004–2011, using a stochastic metafrontier multiple output distance function for 24 EU Member States. The metafrontier estimates reveal considerable productivity differences in milk production across the EU at the regional (NUTS‐2) level. Milk yield per cow is the highest in the old Member States, especially in those regions located in the northwest of the EU, while the lowest productivity is observed in Eastern Europe. The same structure was found for both the TFP (Total Factor Productivity) levels and TFP growth. Moreover, the results for technical change suggest that farm sizes are not optimal in many regions in Central and Eastern Europe from a dynamic perspective. The comparative analysis suggests that in the new compared to the old Member States, fewer farms could benefit from the movement of the frontier. Moreover, there are no signs that poorly performing farms are catching up with the best performing farms in the EU regions/countries.     

The application of relative taxonomy to the study of disproportions in the area of sustainable development of the European Union

The aim of this paper is a comparative analysis of the disparities between EU Member States regarding the uniformity of the observed changes in the field of sustainable development. In order to fulfil the purpose the relatively dynamic taxonomy has been applied. In the work the key indicators of the Sustainable Development analysis have been used. Application of relative measures enabled to assess the situation of a given country in relation to all other countries. According to the research relatively high levels of dis-proportionality between the EU Member States in the field of sustainable development can be observed. Surprisingly the greatest deterioration was observed between Southern European countries and not as could be expected between Western and Northern ones. The leaders throughout the period of analysis were the Netherlands and France, which clearly stood out in favor of the other countries. The least favorable positions were taken by Malta and Bulgaria, which were at the end of the all rankings. The results obtained can be utilized in subsequent years to examine the directions of change observed both from the point of view of individual EU Member States and geographical regions of Europe in the area of sustainable development.     

No Terroir in the Cold? A Note on the Geography of Geographical Indications

Geographical Indications (GIs) are increasingly important instruments of agricultural and food regulations and are growing as contentious issues in trade negotiations and disputes. GIs can improve welfare but they can also be a protectionist instrument. The EU has the most GIs in the world, but they are concentrated in the south of the EU. Even excluding wine, there are seven times more food GIs per capita in the southern EU Member States than in other EU Member States. This note discusses several factors which may explain the geographic concentration of GIs in the south of the EU.     

Towards sustainable water management: Catchment planning in France and Britain

Water management in European States is currently undergoing a series of major shifts linked to changing user and consumer demands, the increasing role of European Union legislation and, critically, the need to address sustainability in water uses. These shifts have a spatial expression. A comparative analysis of recent water management practice in two Member States of the EU, France and Britain (England and Wales), reveals both a new territorial focus in water management, as existing structures and institutions of water policy adapt to the changing environmental agenda, and the development of an integrated approach at the local level based upon river catchments.     

Brexit and Tariff Rate Quotas on EU Imports: A Complex Problem

Tariff rate quotas (TRQ s) are a means by which non‐EU suppliers of agri‐food products can be given preferential access to EU markets within a regulated framework of quotas at tariff rates below the Most Favoured Nation rates bound in the GATT . TRQ s are common in governing trade in the meat and dairy sectors of the EU , although they apply to a wide range of other agricultural commodity and processed agri‐food products. Brexit poses a complex set of problems regarding TRQ s in terms of how the respective parties should divide up jointly undertaken commitments within the WTO , since TRQ s have been negotiated by the Commission on behalf of all EU Member States. Whilst individual quota allocations can be allocated to specific third country suppliers, individual Member States receive no specific allocation of the global product TRQ either in total, or from any named preferential supplier. The article outlines the nature of TRQ s in the meat and dairy sectors of the EU , and how a simple partitioning of existing quotas between the EU ‐27 and the UK is unlikely to resolve the complex issue of access rights of third countries to both markets. Possible solutions are explored, including the potential need for reciprocal EU ‐27–UK TRQ s post Brexit.     

Strengths and Weaknesses of Crosscompliance in the CAP

Cross-compliance has increasingly been used to integrate environmental considerations into the CAP. From 2005 it became compulsory for all Member States to ensure that recipients of Single Farm Payments adhered to Statutory Management Requirements (SMRs), stemming from 19 EU regulations and directives, and kept their whole agricultural holding in 'Good Agricultural and Environmental Condition' (GAEC), to be defined by Member States or regional authorities. The potential for cross-compliance to enhance implementation of EU environmental legislation and reach a large area of farmland seems good, although there are some questions remaining over whether it will reach the agricultural land at most risk of environmental damage or with the highest nature value. In addition, farmers could react in several ways to exempt themselves or some area of their holding from cross-compliance conditions. Member States or regional authorities have taken a variety of approaches to setting cross-compliance standards, some of which seem minimal and vague. There is scope for the SMRs and GAEC to cover more environmental issues. Better guidance at EU level and increased communication could enhance implementation of cross-compliance. Self-audits, co-operation with private assurance schemes or other methods of monitoring should be explored to maximise the efficiency and effectiveness of administrative efforts.     

Economic and environmental effects of decoupled agricultural support in the EU

This article reports findings from a simulation model representing the European farming system disaggregated at different scales. This modeling experiment explores the effects of various decoupling options associated with the 2003 European agreement on gross margins, land use, shadow cost of land, and greenhouse gas emissions. Our results show increases in the farmers’ gross margins when decoupled support is maintained equal to the amount of direct aid previously attributed to agricultural production, assuming unchanged prices. Land used for pasture increases at the expense of land used for cereals and protein crops. The extent to which these effects materialize depends on the policy options selected by Member States when implementing the Luxembourg agreement. When they opt for some recoupling of support, adverse net economic impacts occur for producers. Regional differences in impacts are more pronounced than the analysis aggregated at European and national scales suggests. This highlights the need for further work based on geostatistical downscaling.     

Comparing support for organic and conventional farming in the European Union using an adjusted Producer Support Estimate

This paper compares support for organic and conventional farmingin 2001, using the methodology of the Producer Support Estimate(PSE). Although market price support for organic products isdifficult to determine, our case study-based estimates indicatethat the PSE for organic farming ranged between 41 and 44 percent in the EU, compared with 35 per cent for conventional farming.However, the structure of support for the different commoditiesis similar between organic and conventional farming, althoughdirect payments are generally higher for organic farming. Noclear link between the level of support and the share of organicfarming in Member States could be detected. An annual calculationof separate PSEs for both forms of farming could provide usefulinformation about developments in support.     

The Need for Comprehensive Climate Change Mitigation Policies in European Agriculture

During the last decade the European Union has shown a firm determination to move to a low carbon economy. Since 2008 the agricultural sector has been part of this strategy and is included in the EU effort sharing decision. Introducing specific GHG mitigation obligations for agriculture could be one option to achieve an overall GHG emission reduction target. One argument for this strategy would be that the agricultural sector is the main contributor of non‐CO₂ greenhouse gases. Nevertheless, a comprehensive EU mitigation policy would most likely have to take into account the particularities of its diverse agricultural sector, reflected by different trends in historical GHG emission reductions, and a varied mitigation cost structure between farming systems. Consequently, using targeted but flexible policy instruments may more equitably distribute the mitigation efforts across Member States and reduce cost inefficiencies. The increased uptake of technological and management emission mitigation measures would be crucial to keep mitigation costs for EU farmers at a minimum. However, while unilateral action would initially signal the EU's commitment to serious GHG mitigation effort in the sector, ultimately a multilateral agreement is needed to minimise emission leakage and to reduce global GHG emissions effectively.     

Trends in Approval Times for Genetically Engineered Crops in the United States and the European Union

Genetically engineered (GE) crops are subject to regulatory oversight to ensure their safety for humans and the environment. Their approval in the European Union (EU) starts with an application in a given Member State followed by a scientific risk assessment, and ends with a political decision‐making step (risk management). In the United States (US) approval begins with a scientific (field trial) step and ends with a ‘bureaucratic’ decision‐making step. We investigate trends for the time taken for these steps and the overall time taken for approving GE crops in the US and the EU. Our results show that from 1996–2015 the overall time trend for approval in the EU decreased and then flattened off, with an overall mean completion‐time of 1,763 days. In the US in 1998 there was a break in the trend of the overall approval time. Initially, from 1988 until 1997 the trend decreased with a mean approval time of 1,321 days; from 1998–2015, the trend almost stagnated with a mean approval time of 2,467 days.     

Should ‘Impartial’ Advice be a Priority of European Agricultural and Rural Policies?

Recent EU legislation will require Member States to ensure that farm advice which is supported by EU funding is impartial. In this article we present the findings of an online workshop which asked whether this should be a priority for European advisory supports within the Common Agricultural Policy. The answer was ‘no’. At the workshop, results of AgriLink were presented for discussion with international experts. These results highlighted major pitfalls for setting the boundaries of independent advice. Participants from Europe and North America agreed that ‘impartial’ advisors providing or selling only advice are rare in many contexts. Key organisations offering farm advice in many European countries, such as farmers’ cooperatives, often have established relationships with commercial suppliers. Being apparently independent from industry is also not sufficient for ensuring that advice addresses societal issues. Farmers’ choice for advice is more likely to reflect established trusted relationships than the ‘impartiality’ of the advisor. Workshop participants instead argued that policies should focus on increasing transparency (revealing vested interests); investing in ‘back office’ activities to ensure that advisors have access to reliable and relevant evidence; and ensuring that the full range of EU farmers have access to professional advice.     

Implementing the EU eco-scheme in the Netherlands: A results-based points system approach

The latest reform of the EU Common Agricultural Policy (CAP) aimed at making it more results-oriented in order to ensure the sustainability of the sector. From 1 January 2023, in the new policy framework, the European Commission introduced a new tool – eco-schemes. This tool presents several advantages compared to the former ‘greening’ since it includes more ambitious targets than the previous policy framework. Another difference with the previous system is that the eco-schemes focus on results rather than efforts, while creating some room for the EU Member States to design measures which take into account existing local circumstances and needs. For the implementation of the eco-schemes, the Netherlands has developed a menu-points-system. The Dutch system is a good policy improvement compared to the previous ‘greening’ measures. Nevertheless, due to its hybrid form, it does not yet lead to the best possible cost-efficiency measures. To achieve that, a ‘pure’ point-reward (instead of an effort-reward) should have been implemented. Another novelty of the Dutch eco-scheme policy is the development of a simulation tool, which can assist farmers to test different choices before they make their final decisions.     

An indicator to reflect the mitigating effect of Common Agricultural Policy on soil erosion

This study presents the updated version of the recently published LANDUM model [Land Use Policy 48, 38–50 (2015)]. LANDUM is integrated into the 100 m resolution RUSLE-based pan-European soil erosion risk modelling platform of the European Commission. It estimates the effects of local land use and management practices on the magnitude of soil erosion across each NUTS2 region of the European Union. This is done based on a spatially explicit estimation of the so-called cover-management factor of (R)USLE family models which is also known as C-factor. In this updated version, the data on soil conservation measures (i.e., reduced tillage, cover crops and plant residues) reported in the latest EU Farm Structure Survey (2016) were integrated and elaborated in LANDUM in order to estimate the changes of the C-factor in Europe between 2010 and 2016. For 2016, a C-factor of 0.2316 for the arable land of the 28 Member States of the European Union was estimated. This implies an overall decrease of C-factor of ca. -0.84 % compared to the 2010 survey. The change in C-factor from 2010 to 2016 could be an indication for the effectiveness of Common Agricultural Policy (CAP) soil conservation measures in reducing soil erosion in Europe, especially key CAP policies such as Good Agricultural and Environmental Conditions and Greening.     

Irrigation water pricing: differential impacts on irrigated farms

European water policy, as set out in the Water Framework Directive (WFD), requires all EU Member States to implement volumetric water pricing at rates that roughly cover the total costs of providing water services. The objective of this paper is to develop a methodology that, for the different types of farm in an irrigable area, will enable us to analyse the differential impact that a pricing policy for irrigation water would have. For this purpose, Multi-Attribute Utility Theory (MAUT) mathematical programming models were used. The methodology is implemented on a representative area in the Duero Valley in Spain. Our results show the usefulness of differential analysis in evaluating the impact of a water pricing policy. This allows significant differences in the evolution of agricultural incomes to be observed, as well as the recovery of costs by the State, demand for agricultural employment and the consumption of agrochemicals resulting from rising prices of irrigation water in various groups of farmers within a given irrigated area.     

Potential Impacts of Transatlantic Trade and Investment Partnership (T-TIP) on the Fresh Vegetable and Beef Trade

ABSTRACT

The Transatlantic Trade and Investment Partnership (T-TIP) negotiations influence the global economic position of both the European Union (EU) and the United States (U.S.). Agricultural issues are an important part of the negotiation. There have been several analyses of the aggregate impacts of a T-TIP agreement. This report analyzes the commodity impacts on trade for fresh vegetables and beef. Vegetables represent the situation where the U.S. is a growing net importer and the EU has substantial potential for expanding exports to the U.S. in this highly competitive marketplace. Beef represents the situation where sanitary and phytosanitary restrictions on hormone use in production have prohibited consumer choices from being revealed in the marketplace for both the EU and the U.S. The authors provide insight into where the comparative advantages lie in freer trade situations.     

Our Common European Model of Agriculture

Our Common European Model of Agriculture
Future internal and external forces on European agriculture mean that the CAP may look very different after 2013. However large these changes, the CAP will need to retain its common principles based on the European Model of Agriculture (EMA). This became clear in an informal September meeting of EU agriculture ministers in Oulu, arranged by the Finnish Presidency. A strong CAP will be needed in the future but it will have to evolve to meet upcoming challenges. Work on the future CAP will need to start soon and the Oulu meeting may become known as the starting point for those discussions. The CAP will have to provide a reasonable environment for practicing agriculture for very different farmers in very diverse conditions, and facilitate the supply of a wide variety of goods and services to consumers and taxpayers as only truly multifunctional agriculture can. If the CAP can maintain these characteristics it has an important role to play in a future Europe. The meeting in Oulu was also an important milestone for a very special reason: for the first time, all ten New Member States took an active part in the EMA-debate with full rights and responsibilities as part of the Union. Once again this underlines the central role of our common European Model of Agriculture.     

The Impact of the 2013 CAP Reform on the Decoupled Payments’ Capitalisation into Land Values

We assess the effects of the 2013 CAP reform on the capitalisation of decoupled payments in land rental values. Our estimates suggest that the reform leads to an increase in the capitalisation of decoupled payments by an additional 18 cents for each Euro of decoupled payments relative to the pre‐reform situation. However, there is an important variation in the reform effects between Member States (MS) particularly between Old Member States (OMS) and New MS (NMS). In NMS, the capitalisation rate slightly reduces from 83% in the pre‐reform period to 79% in the post‐reform period. Although, the rate is significantly lower in OMS, it doubles (from 21% to 43%) due to the reform. The main sources of the post‐reform capitalisation in the European Union (EU) are the pre‐reform capitalisation accounting for 69% of the total post‐reform capitalisation, followed by the entitlement stock change with 19%, by the internal convergence of payments with 18%, the budget change (including external convergence) with 1%, and the differentiation of payments (redistributive payment) with ?7%. Overall, our estimates suggest that on average in the EU, the non‐farming landowners’ policy gains are 27% of the total decoupled payments in the post‐reform period compared to 18% in the pre‐reform period.