Standing at the Crossroads – the Future of a Strong Common Agricultural Policy is at Stake A la croisée des chemins – l’avenir d’une politique agricole commune forte est en jeu Am Scheideweg – die Zukunft einer starken Gemeinsamen Agrarpolitik steht auf dem Spiel

Standing at the Crossroads – the Future of a Strong Common Agricultural Policy is at Stake The issues and targets in the European Union’s agenda are largely in line with Hungarian objectives; job creation for example is one of the main targets of the Europe 2020 strategy and also of the Hungarian Government. Hungary’s development and competitiveness are linked to the internal development and global competitiveness of the European Union; and so our primary objective is to strengthen the integration process and to obtain a strong Common Agricultural Policy. The CAP has reached the highest level of integration among EU policies and its original objectives have been reinforced by the Lisbon Treaty. Europe needs a strong and common agricultural policy beyond 2013; the main task of agriculture will be to ensure the security of food supplies. The future success of the CAP requires appropriate financial support to secure future targets. Rural development has already become an integral part of the CAP structure; but rural areas will not be viable without an evolving agriculture. Without the provision of a proper level of income subsidies many farms would be forced to stop production. CAP adjustments should promote the catching up of new Member States and eliminate the current system of direct subsidies that disadvantage the new members.     

A comparative multidimensional evaluation of conservation agriculture systems: A case study from a Mediterranean area of Southern Italy

To avoid the current paradoxes of the global agro-food system it is necessary to define and implement a viable agricultural sustainable model, combining satisfaction of food needs and land preservation. A possible solution can be found in a holistic production system consistent with a sustainable development model, designed to satisfy diverse “local” economies. The conservation agriculture (CA) could be a part of this model, as it includes a set of best practices available to preserve agrarian soil and its biodiversity. Briefly, we cover the CA background in Europe followed by the evaluation of its impact in terms of private/public interest, using the sustainability’s metric.To test the viability of a model based on CA in “local conditions”, we compare economic performance of different conservation practices (i.e. minimum and no tillage) to that of conventional agriculture in a typical Mediterranean environment – Collina Materana – in Southern Italy (Basilicata region). Our findings suggest that: i) CA can actually be a viable alternative to conventional systems; ii) in Mediterranean agricultural areas CA has yield advantages especially during dry years, when conservation techniques increase water supply to crops; iii) public support is needed to direct farming choices in fact without financial incentives these practices would be not widely accepted and diffused; iv) European policy makers have to recognized the positive benefits of CA and pay them as ecosystem services in the framework of Good Agricultural Environmental Conditions and the present CAP subsidies.     

Modeling the Reforms of the Common Agricultural Policy for Arable Crops under Uncertainty

The size of the insurance and wealth effects of a change in the Common Agricultural Policy (CAP) for arable crops is estimated. The impact of price uncertainty is accounted for in the specific decision-making structure of the European Union (EU) arable crop producers under nonlinear mean-variance risk preferences. A system of output supply, input demand, and land allocation equations is estimated on a sample of Italian specialized arable crop farms. The simulation of the impact of the recent reforms confirms that farmers' output responses are consistently affected by the size of the insurance and wealth effects.     

Adoption of conservation agriculture in Europe: Lessons of the KASSA project

According to KASSA findings, conservation agriculture is less adopted in Europe compared to other adopting regions and, reduced tillage is more common than no-tillage and cover crops. Currently, it is not popularised and it is less researched. The lack of knowledge on conservation agriculture systems and their management and, the absence of dynamic and effective innovation systems make it difficult and socio-economically risky for European farmers to give up ploughing which is a paradigm rooted in their cultural backgrounds. In Norway and Germany the adoption of conservation agriculture has been encouraged and subsidised in order to mitigate soil erosion. In the other European countries the adoption process seems mainly driven by farmers and, the major driving force has been the cost reduction in machinery, fuel and labour saving. Soil and water conservation concerns did not appear as main drivers in the European farmers’ decision to shift or not to conservation agriculture.The shift of European farmers to conservation agriculture is being achieved through a step-by-step attitude, large scale farms are the most adopters. This adoption trend may grow in the future. Indeed, the need to improve farms’ competitiveness, the market globalization and the steady increase of fuel cost will likely contribute to arouse European farmers’ interest in conservation agriculture as it slashes significantly the production costs.Conservation agriculture is not equally suitable for all the European agroecosystems. The need of soil and water conservation in Europe requires anticipating the ongoing process in order to improve its ecological and socio-economic sustainability. Priority would be to define which regions in Europe are the most suitable for conservation agriculture taking into account climate and soil constraints, length of growing period, water availability and quality, erosion hazards and farming conditions. Policy favouring the use of soil cover and profitable crop rotations as management strategies for weed, pest and diseases control will certainly allow developing and disseminating efficient and acceptable conservation agriculture systems.     

Financial consequences of cross-compliance and flat-rate-per-ha subsidies: The case of olive farmers on sloping land

Under the past Common Agricultural Policy (CAP) olive oil subsidy regime, farmers were eligible for subsidies on the basis of amount of olive oil produced. This led to an intensification of production and negative environmental effects on sloping land, such as loss of biodiversity and more soil erosion. In 2004 the olive and olive oil regime changed, with integration of support to olive farmers in the Single Payment Scheme (SPS). From 2006 to 2013 farmers receive a constant amount of subsidies, based on the average amount they received in the 4-year reference period 1999–2002.     

Potential impact of the EU 2003 CAP reform on land idling decisions of French landowners: Results from a survey of intentions

The 2003 reform of the European Union Common Agricultural Policy (CAP) introduced Single Farm Payments (SFPs) which are decoupled payments conditional on cross-compliance, and allows these payments to be claimed for land kept fully idle but maintained in good agricultural and environmental conditions (GAEC). This paper focuses on the potential impact of the reform on land idling decisions in France with the help of a survey of the intentions of landowners. Both operator and non-operator landowners were considered since, although SFP entitlements are owned only by operator landowners in France, non-operator landowners may now have a higher incentive to switch to operating land by idling land and maintaining it under GAEC in order to claim SFPs. The key variables in landowners’ decisions to idle land in GAEC appear to be both monetary and non-monetary. Despite the likely difference in conversion and cross-compliance costs, operators and non-operators were shown to be equally uninterested in GAEC, suggesting that no dramatic changes in terms of idling land should occur in France as a result of the 2003 reform.     

Levelling the playing field for European Union agriculture: Does the Common Agricultural Policy impact homogeneously on farm productivity and efficiency?

Originally conceived as a post-war policy vehicle for ensuring agricultural self-sufficiency, the Common Agricultural Policy (CAP) has evolved into a multifunctional instrument designed to satisfy a diverse portfolio of European Union (EU) policy objectives including nature protection. Notwithstanding, whilst the CAP has become more environmental and socially responsible, it is still expected to deliver an efficient farm production system capable of competing on world markets. The current paper combines a farm business panel dataset for 98 EU territories with a Stochastic Frontier Analysis (SFA) approach, to assess the impact of four contemporary broad categories of CAP subsidy programs on efficiency and environmental sustainability. In accordance with the literature, this study more correctly defines inputs as “facilitating”, whilst following recent methodological developments, crop-subsidies are treated as an endogenous strategic variable in the production function. Comparing between two discrete time periods, further tests are conducted to examine the hypothesis of technical efficiency convergence across european territories. The results suggest that first pillar crop subsidies and pillar two environmental programs generate a disincentive effect on productivity, whilst in general, the CAP promotes technical efficiency convergence within Europe.     

The future of olive groves on sloping land and ex-ante assessment of cross compliance for erosion control

Under the past Common Agricultural Policy (CAP) olive oil subsidy regime, farmers were eligible for subsidies on the basis of the amount of olive oil they produced. This led to an intensification of production, particularly on flat land, and had in most cases negative environmental effects, such as more soil erosion on sloping land and more pollution. With the decoupling of agricultural support under the newly established rules of the CAP, formalised in 2005, cross compliance measures have become obligatory.In this paper an ex-ante assessment is made of the application of cross compliance for soil erosion control (natural cover crops and terrace maintenance) in hilly and mountainous olive groves in Trás-os-Montes in Portugal. A linear programming model was developed to assess the various socio-economic and environmental effects of four different development scenarios for olive groves. The scenarios were developed on the basis of changing market prices, wage rates and subsidies; their effects included shifts towards intensification, abandonment and organic farming. Simulations considering a minimum return to labour constraint showed very high levels of abandonment, particularly in combination with cross compliance obligations. However, even without this minimum return to labour constraint, abandonment would reach more than 20% in three out of the four scenarios. The model showed that cross compliance obligations could be quite effective in reducing erosion, but that they would depress income in all scenarios as a result of higher abandonment and lower percentage shifts towards intensive systems.     

Evaluating the Market and Welfare Impacts of Agricultural Policies in Developed Countries: Comparison of Partial and General Equilibrium Measures

We revisit the question of choosing partial equilibrium or general equilibrium modeling in applied policy analysis in the context of evaluating the effects of a complete phase-out of the Common Agricultural Policy (CAP) of the European Union. We compare the results of three models—two three-sector general equilibrium models (one with an additional major distortion in the nonagricultural sector) and a two-sector partial equilibrium model. We find that the market effects of a complete phase-out of the CAP are quite comparable across these models. On the other hand, the measured welfare impacts may depend on the modeling choice.     

The highly variable economic performance of European agriculture

The successive reforms of the Common Agricultural Policy (CAP), the enlargements of the European Union (EU) and the impacts of climate change have amplified the diversity of European agriculture. These rapid changes have resulted in the intensification of agricultural activities in some regions, while they have led to the marginalization of agriculture and its eventual abandonment in others. The objective of this paper is to investigate the factors that are behind the differential performance of agriculture across the EU-27 countries. Ward's, k-means and two-step clustering methods were used to classify European agriculture based on gross-value-added farm, land and labour productivity indicators. Significant differences were revealed between the Northern-Central counties and the continental peripheries (Mediterranean, Eastern, Northern Scandinavian). An exact logistic regression model was used to analyse the factors behind this differential performance. Agricultural sectors characterized by a young and better trained farm population are more likely to attain high economic performance. The odds to attain high economic performance are almost 9 times greater for countries with a highly trained farm population, namely, the Netherlands (72%) and Germany (69%), than for countries with poor farm training, while an ageing farm population such as in Portugal (72%) and Bulgaria (66%) is 92% less likely to be high performing. The importance of investments in agriculture was also identified. The significance of the wheat yield variable highlights the importance of both environmental conditions and technical efficiency on farm economic performance. Similarly, countries with a high share of utilized agricultural land in less favoured areas, such as in the Mediterranean, are 94% less likely to attain high economic performance. The redesign of CAP direct payments between old and new member states after 2013 combined with the impacts of agricultural trade liberalization and climate change are expected to deteriorate the position of low performing agricultural sectors further.     

International diffusion of gains from biotechnology and the European Union's Common Agricultural Policy

This paper analyses the impact of adopting or rejecting genetically modified (GM) crops in the European Union, taking into account the EU Common Agricultural Policy (CAP). In this paper the productivity impact of genetically modified organisms (GMOs) differs across crops, taking factor biased technology change into account. The transfer of knowledge across countries is modelled as a process of endogenous knowledge spill-overs. Analysis with a multi-region applied general equilibrium model shows that the CAP protects farm income and production despite non-adoption of the more productive GM crops in the EU. The EU will forgo substantial benefits in terms of economic welfare if it bans GM imports.     

Searching for a downward spiral? Soil erosion risk,agro-forest landscape and socioeconomic conditions in Italian local communities

Soil erosion is a common form of land degradation in Europe concentrating on sloping rural areas. Consequences of soil erosion include the alteration of the long-term balance between ecosystem functioning and socio-ecological systems. Although it was hypothesized that rural areas with specific environmental (soil, climate, vegetation) and territorial attributes (economic marginality and poor accessibility) are more exposed to soil erosion risk, less information are available on the spatial link with various socio-spatial, productive, cultural and political attributes of local communities, spanning from unemployment to subsidence agriculture, from quality of life to water management, from poverty to economic backwardness. Taken together, these factors may trigger a downward spiral leading to land degradation. The present study explores, on a municipal scale in Italy, the spatial relationship between an index of soil erosion risk and 133 indicators describing six research domains. Exploratory data analysis based on non-parametric inference, principal components analysis and hierarchical clustering was carried out with the aim to profile municipalities exposed to high risk of soil erosion and to identify a restricted number of factors possibly determining a downward spiral towards soil erosion and land degradation. Results indicate that the socioeconomic profile of risky areas in Italy is characterized by specific rural development attributes and defined productive structure and socio-spatial characteristics representing a possible target for mitigation policies. Multi-factor studies investigating the influence of the local socioeconomic context on soil erosion may contribute to improve the effectiveness of national soil conservation strategies.     

A quantitative assessment of policy options for no net loss of biodiversity and ecosystem services in the European Union

The Biodiversity Strategy of the European Union includes a target to “ensure no-net-loss of biodiversity and ecosystem services by 2020”. Many policy options can be envisioned to achieve such a no-net-loss target, mainly acting on land use and land management. To assess the effectiveness of such policies at a European Union (EU) scale, we simulated land use changes and their impacts on biodiversity and ecosystem services indicators. We analysed a Business–as-Usual scenario, and three no-net-loss scenarios. The no-net-loss scenarios included measures that aim to reduce negative impacts of land use change on biodiversity and ecosystem services, by better implementation of existing biodiversity conservation measures (Scenario 1); and enhancement of existing measures (Scenario 2); and offsetting residual impacts on areas of high biodiversity and ecosystem service value (Scenario 3).Results show that none of the scenarios achieved overall no-net-loss. Compared to a Business-as-Usual scenario, the no-net-loss scenarios reduced the overall degree of land cover change at EU level, hence reducing impacts on biodiversity and ecosystem services in large parts of the EU. The more comprehensive no-net-loss scenarios resulted in a gain of natural land cover. Moreover, natural areas became better connected, especially in peri-urban areas as a result of impact avoidance and offsetting. Richness of farmland bird species was projected to increase. Measures included in the no-net-loss scenarios had net positive effects on pollination and carbon sequestration, neutral effects on crop production, erosion prevention and flood regulation, and negative effects on nature-based recreation, compared to Business-as-Usual. In particular circumstances policy measures invoked displacement effects in land use allocation, reducing the effectiveness of the measures. This was primarily the case for flood regulation services throughout the EU.This study differentiates the potential effectiveness of a no-net-loss policy framework in three manners: (i) considering biodiversity and ecosystem services simultaneously; (ii) in the light of existing policies and land use pressures; and (iii) in different land use contexts across the EU. Taken together, we conclude that achieving no-net-loss for biodiversity and ecosystem services throughout the EU remains challenging given high land use demands. Nevertheless, in large parts of Europe there appears room for improvement for certain kinds of biodiversity and ecosystem services compared to Business-as-Usual, while still meeting other land use demands.     

Book Reviews

Transforming Agrarian Economies: Opportunities Seized, Opportunities Missed. Thomas P. Tomich, Peter Kilby and Bruce F. Johnston Food Environment Education: Agricultural Education in Natural Resource Management . Lindsay Falvey Environmental Policy Analysis: A General Equilibrium Approach . Jian Xie CAP and Environment in the European Union . By F. M. Brouwer and S. van Berkum     

Effects of European Union agricultural policies on the sustainability of grazingland use in a typical Greek rural area

Recent changes in the Common Agricultural Policy (CAP) introduced different definitions regarding the eligibility of various types of land used by grazing animals. In particular, shrublands and other low-quality areas which have traditionally been used as grazinglands are now not eligible for European Union income support payments. Subject to these changes, a large part of livestock farms will be affected, being partially or fully deprived of EU income support. In addition to these policy-driven changes, pasture-fed livestock farms in Greece are faced with a unique system of grazingland allocation, as all grazing areas in the country are state-owned. These areas are allocated for a short period either directly to farmers who are permanent residents of the Municipalities or to other livestock farmers through an auction system, which does not take into account the grazing capacity thus bringing about environmental degradation. This paper investigates the effects of CAP changes and of this communal land allocation system based on the findings of a typological analysis. The study focuses on a typical Greek territory in terms of land uses, economic activities and sociodemographic developments. Data from a questionnaire survey are used to build a typology of local livestock farms in terms of their nutritional management and land use characteristics and then the profile of each type is investigated through the estimation of a Multinomial Logit Model where the dependent variable is the cluster participation. Three distinct types of farms (clusters) are determined. Cluster 1 includes traditional farms which rear sheep and goats and bovine for meat, which are highly dependent on grazingland uses and EU income support. Cluster 2 farms – mainly sheep and goat – have evolved a ‘double’ dependency on land in the form of grazingland but also of cropland for feedstuff production, which renders them more resilient to policy changes. Finally, Cluster 3 farms are intensive dairy cattle farms and use artificial (cultivated) privately-owned grazinglands and cropland for feedstuff production. Market-oriented measures are proposed for each type and suggestions for an integrated land use plan are made, including long-term leasing of land and the consideration of environmental criteria for land allocation, thus rendering farmers responsible for keeping their land in a good production state.     

CAP and Advisory Services: From Farm Advisory Systems to Innovation Support

Farm advisory services have become an important topic in the Common Agricultural Policy (CAP) of the European Union (EU). The aim of this article is to draw lessons from the implementation of the regulation and measures of the current 2014–2022 CAP in knowledge transfer and advisory services to contribute to debates about the future of farm advisory policies. Findings are based on two studies commissioned by the European Commission: an evaluation study implemented by a consortium of consultancies and researchers and a comparative analysis implemented in the frame of the H2020 research project AgriLink. The article first provides a historical perspective of the ‘knowledge and advice’ dimension of the CAP since 2007. We show a gradual transition towards greater flexibility of measures supporting innovation and knowledge flows. The professional status of farm advisors across European countries was more strongly acknowledged, offering new life-long training opportunities to advisors. However, the implementation of CAP’s advisory measures remains complex. As a result, the effects of these measures have been rather limited, with only few farmers reached overall. Fostering an inclusiveness of these measures remains an ongoing challenge for policymakers.     

Fostering integrated land and water management approaches: Evaluating the water footprint of a Mediterranean basin under different agricultural land use scenarios

In the Genil River Basin (southern Spain), agriculture is the greatest pressure on freshwater demand. Furthermore, water degradation caused by soil erosion is becoming a key environmental concern. This study aims to assess the water-related impacts of agriculture combining the use of an ecohydrological model (SWAT) with a spatiotemporal water footprint assessment to evaluate the current status of streamflow (blue water), soil water (green water) and the assimilability of sediments by streamflow (grey water footprint). The Common Agricultural Policy (CAP) requires farmers to adopt certain agricultural practices that are beneficial for the environment. Such practices could affect the conditions of available land and water resources. Because of the importance of applying the best land management practices for the maintenance of sustainable water resources, the study also infers probable water availability and water pollution level changes under different post-2013 CAP scenarios. The Genil streamflow is highly regulated, and, as a result, it is hard to discern significant changes (p < 0.05) under the proposed scenarios. However, there is a shift with afforestation measures from unproductive (i.e., direct soil evaporation) to productive water (i.e., evapotranspired water from agricultural and natural areas, excluding non-growing periods) consumption. The probability of annual evapotranspiration from natural areas being greater in afforestation scenarios than in the baseline scenario is 0.70 to 0.88, whereas the likelihood of soil water evaporation being lower is 0.60. Evapotranspiration in natural areas increases by about 521% from September to May under afforestation measures compared with the baseline scenario, whereas soil water evaporation decreases by 30% in winter. The grey water footprint and water pollution level decrease by 19% and 9%, respectively, with the highest streamflow conditions under afforestation as opposed to current conditions. However, water pollution levels of suspended solids greater than 1 indicate that the river flow is not capable of assimilating the existing sediment loads. Since land use changes and agricultural practices have a major impact on water resources, the post-2013 CAP reform can provide environmental benefits for water allocation and mitigation of water pollution. However, further efforts are required to better align the policy goals of the CAP and the Water Framework Directive.     

基于主成分分析的山西省农业循环经济发展水平评价研究

[目的]农业循环经济是我国农业可持续发展的必由之路,对农业循环经济发展水平的评价是该领域研究的关键。[方法]构建包含社会、经济和生态效益的农业循环经济评价指标体系的基础上,运用主成分分析法结合线性回归方程对山西省2001~2016年农业循环经济发展水平进行评价和分析。[结果](1)山西省农业循环经济发展水平的评价因素可归纳为生产资料集约水平、资源修复水平和土地集约水平3方面。(2)山西省农业循环经济在2001~2016年总体呈现上升趋势;并分为两个发展阶段,2001~2009年农业循环经济发展低水平阶段和2010~2016年农业循环经济发展上升阶段。(3)2010年之后山西省转变传统农业发展方式、实现农业循环经济取得一定成效,生产资料集约水平是促使山西省农业循环经济发展提升的主要动力。[结论]山西省转变传统农业发展方式,提升农业循环经济发展水平,使农业走可持续发展道路注重生产资料的集约是关键,可以从控制化肥、农药、农膜投入量,提升其有效利用系数等方面入手;其次要提升资源修复水平,利用秸秆还田的形式增加废弃物利用率,增加水土流失治理面积;并提高土地利用率。     

CAP Subsidies and Productivity of the EU Farms

The paper investigates the impact of the Common Agricultural Policy (CAP) subsidies on farm total factor productivity (TFP) in the European Union (EU). We employ a structural semi‐parametric estimation algorithm directly incorporating the effect of subsidies into a model of unobserved productivity. We empirically study the effects using the Farm Accountancy Data Network (FADN) samples for the EU‐15 countries. Our main findings are clear: subsidies impact negatively on farm productivity in the period before the decoupling reform was implemented; after decoupling the effect of subsidies on productivity is more nuanced and in several countries it turned positive.     

Semi‐Subsistence Farming: An Elusive Concept Posing Thorny Policy Questions

The massive expansion of semi‐subsistence farming in the European Union after the Eastern enlargements poses a real challenge to rural development. The problems of semi‐subsistence farms are low cash incomes and incidence of poverty, sub‐optimal use of land and labour, a lack of capital and poor contribution to rural growth. However, they play an important welfare function in some rural areas in Europe; they manage more than 11 million ha of agricultural land and deliver ecosystem services. The Common Agricultural Policy will have to accommodate this now widespread production system, through existing or new policy packages. Particularly important is support for commercialisation to incentivise and smooth the transition to commercial agriculture, and agri‐environmental payments to compensate the semi‐subsistence farmers for the provision of ecosystem services.