The proposed shift of the CAP from compliance to performance:

challenges, impacts and opportunities for a knowledge-based EU agriculture

Seminar: CAP post 2020 Debate

Cátedra Cajamar – UPM / CEIGRAM Madrid, 18 May 2018

Tassos Haniotis

Director DG Agriculture and Rural Development

European Commission

#FutureofCAP

Agriculture and Rural Development

The essentials of the CAP shift towards performance

Challenges and opportunities for a knowledge-based agriculture

Implications for the farm policy debate

Outline

Agriculture and Rural Development

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The CAP budget in perspective (in current prices)

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as share of GDP in billion EUR

Export subsidies Other market measures Coupled support

Decoupled support of which direct payments of which green payments

Rural development - environment/climate Rural development - other measures Pillar I post-2020

Pillar II post-2020 CAP excl UK CAP as share of EU GDP

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as share of GDP in billion EUR

Export subsidies Other market measures Coupled support

Decoupled support of which direct payments of which green payments

Rural development - environment/climate Rural development - other measures Pillar I post-2020 MFF proposal

Pillar II post-2020 MFF proposal CAP excl UK CAP as share of EU GDP

EU-10 EU-12 EU-15 EU-25 EU-27 EU-28 EU-27

Source: EC-DG AGRI. Note: Budget figures are actual until budget year 2016, programmed from 2017-2020, and based on the MFF proposal for 2021-2027.

Agriculture and Rural Development

EU Specific objectives

Set of common Indicators

EU

Broad types of interventions

Identification of needs in MS's CAP Plan

Tailor CAP interventions to their needs

Implementation / Progress towards targets

MEMBER STATES

The new delivery model for the CAP at a glance

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The new Green architecture of the CAP

Agriculture and Rural Development

A performance-based policy implies two distinct, but interconnected processes …

… that of assessing the policy and that of assessing the policy implementation

A meaningful assessment of policy performance can rely on the manner by which …

… specific targets are achieved, especially with respect to specific objectives

Reliable policy assessment requires a selection of a set of indicators reflecting how …

… the supported intervention contributes to achieving the specific objectives

Policy performance is assessed multi-annually based on a combination of methods …

… while policy implementation requires closer monitoring at an annual basis

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Focus on performance

Agriculture and Rural Development

EU Objectives Income

Climate change

Environment

Competitiveness

Food chain

Landscapes

Generational renewal

Rural areas

Food and health

Impact indicators

Assessing CAP performance

Agriculture and Rural Development

The rationale of future indicators

Common Impact Indicators

CAP Policy Performance

Impact indicators are used to evaluate policy performance at the level of overall objectives (mid-term and ex-post).

Common Result Indicators

CAP Plan Performance

Result indicators are used for target setting in CAP plans and monitoring progress towards those targets ("Annual Performance Review")

Common Output Indicators

CAP Assurance

The output indicators serve the purpose of linking expenditure to output. They are used for annual performance clearance.

Context Indicators

General context Context indicators reflect relevant aspects of the general contextual trends in the economy, environment and society and are likely to have an influence on performance

Agriculture and Rural Development

• A single set of Specific Objectives for the whole CAP

• Link of CAP Strategic Plans to these objectives

• A single set of Indicators under a single legal basis

• A single Monitoring Framework under the CAP Strategic Plans

• Streamlining of the Reporting Obligations

• A unified Evaluation Framework for 1st and 2nd pillar

Towards a unified performance framework for the CAP

Agriculture and Rural Development

Streamlining the present set of indicators 16 impact, 41 result, 24 target (EARDF), 85 output, 45 context indicators

Suitability of the indicators for monitoring purposes e.g. policy relevance and causality, periodicity …

Overlapping in the reporting obligations e.g. data reported both for audit purposes and RD Annual Implementing Reports…

Issues with the reliability/quality of some data e.g. different sources, different reporting periods, control and correction methods…

Issues and lessons learnt from the current CMEF

Agriculture and Rural Development

• Upgrade of information needs

• Need for comprehensive, complete, timely and reliable information

• Adaptation and strengthening of existing data sources

• FADN data base: coverage to be expanded

• On-going modernisation of agricultural statistics

• Further development of data quality

• in particular of the impact indicators linked to agro-environment

• Cross-linking of existing data sets

• Integration of new sources of data

• satellite monitoring (Copernicus)

• big data solutions, cooperation with specific data providers…etc.

Priorities for Data/Sources of information

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An example of an economic objective (competitiveness) 1. EU Specific objectives

3. Objectives from EU legislation

2. EU Impact indicators

4. Identification of needs in MS’s CAP plan

5. Contribution of MS’s CAP plan to EU objectives

• Competitiveness

• Article 39 TFEU (CAP objectives): to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour

• Increase farm productivity/ indicator: Total factor productivity (progress in TFP compared to base year)

• Current CMEF: TFP I.03 and C.27 • Data sources: based on EAA and FADN

• The ex-ante assessment helps to identify the specific needs to increase farm productivity

• The CAP plan shows how it will contribute to increase farm productivity • Setting of result targets: Share of farmers with support for advice, training and knowledge exchange related

to economic performance; Share of farmers with investment support to restructure and modernise; Share of farmers with improved access to precision farming technology through CAP

• Selection and definition of interventions: decoupled support, coupled support, Investment support, Advisory services, Basic services in rural areas (ICT), measures aimed at increasing carbon storage, uptake of precision farming etc.

6. CAP and MS’s plan performance

• Evaluation of policy performance based on impact indicators • Progress monitoring towards set targets based on result indicators

EU

MS

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Evolution of TFP (2005=100)

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• Innovation, investment and technological change

• Horizon 2020, EIP-AGRI, … (A B)

• Efficiency gains through better farm management

• RD programs (C A)

• Decoupling (A D)

• Efficiency changes from regulations

• Environmental requirements

• Nitrate directive, SUD, …

• Enabling rural environment

• RD programs

• Structural change

• Decoupling

• Climate change

• Environment-climate requirements, cross-compliance

Examples of policy impact on productivity gains

The policy links of competitiveness

Agriculture and Rural Development

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1. EU Specific objectives

3. Climate objectives from EU legislation

2. EU Impact indicators (e.g.)

4. Identification of needs in MS’s CAP plan

5. Contribution of MS’s CAP plan to EU objectives

• Climate change mitigation & adaptation

• Reduction of greenhouse gas (GHG) emissions by 30 % by 2030 in the non-ETS (emission trading system) sectors, including agriculture, pursuant to the 2030 Climate and Energy Framework

• Reduce GHG emissions from agriculture / Indicator: GHG emissions from agriculture • Current CMEF: Impact indicator I.07, context indicator C.45 • Data sources: European Environment Agency

• The ex-ante assessment helps to identify specific needs in relation to reducing GHG emissions • The CAP plan highlights the link to the existing climate legislation (2030 Climate and Energy Framework,…)

• The CAP plan shows how it will contribute to reaching the reduction of GHG of 30 % in non-ETS sectors by 2030

• Setting of result targets (e.g.): share of UAA receiving income support and subject to conditionality; share of livestock units concerned by support to reduce GHG emissions; share of farmers receiving advice related to env/climate performance

• Selection and definition of interventions (e.g.): maintenance of permanent grassland; feed-related Pillar II measures; training

6. CAP and MS’s plan performance

• Evaluation of policy performance based on impact indicators • Progress monitoring towards set targets based on result indicators

EU

MS

An example of a climate objective (cut in CGH emissions)

Agriculture and Rural Development

CGH emissions from agriculture

Agriculture and Rural Development

1. EU Specific objectives

3. Objectives from EU legislation

2. EU Impact indicators

4. Identification of needs in MS’s CAP plan

5. Contribution of MS’s CAP plan to EU objectives

• Generational renewal

• EU Youth Strategy – Initiatives in the areas of employment and entrepreneurship, social inclusion, education and training, creativity and culture, etc.

• Attract young farmers / Indicator: Number of new farmers • Current CMEF: not covered at impact level (no data); context indicator C.23 – age structure of farm

managers • Data sources: potentially Eurostat (depending on final version of Integrated Farm Statistics currently in

Trilogue)

• The ex-ante assessment helps to identify the specific needs to attract new entrants and foster generational renewal in agriculture, including specific aspects on land mobility and access to credit. It also highlights how national instruments, e.g. taxation, inheritance law, regulation of land markets or territorial planning, interplay with EU-supported interventions in relation to generational renewal

• Corresponding context indicators: age structure; farms, land and output by age class; training levels by age group, etc.

• The CAP plan shows how planned interventions will contribute to attract new farmers and facilitate generational renewal

• Setting of result targets: Number of new farmers setting up a farm with support from the CAP. • Selection and definition of interventions: Young Farmer Payment top-up and / or EAFRD installation

grants; priority for young farmers for investments, AKIS, cooperation (land mobility schemes) etc.

6. CAP and MS’s plan performance

• Evaluation of policy performance based on number of new farmers (impact indicator) • Progress monitoring towards set targets based on result indicators

EU

MS

An example of a social objective (generational renewal)

Agriculture and Rural Development

Agriculture and Rural Development

A shift in approach requires a shift in mentalities…

…the "entry" point" for assessing the policy will be the list of its specific objectives

Impacts will mainly be on administrations (EU and MS)…

…assessing the relevance and progress of strategic plans towards specific targets

Risks of backtracking have been identified in the public debate…

…but remedies exist, and transparency in information (underestimated) will weigh big!

Opportunities stem from linking modernisation to simplification…

…thus opening the door for a new role for knowledge, innovation and advice

Challenges, Impacts, Risks and Opportunities

Agriculture and Rural Development

Economic dimension: the untargeted debate of targeted support

Is there still need of income support, and what for? Based on land, farm or product?

Environmental/climate dimension: the need for solid evidence

Political correctness still dominates factual correctness, despite progress on the ground

Social dimension: farming and its link to jobs, growth, poverty

The WB study helps to refocus the debate, and to link it to other policies

Modernisation, simplification and Farming 4.0

Old perceptions, new technologies and digital realities (full spectrum of pros and cons)

What impact on the policy debate from this?

Agriculture and Rural Development

Reports and data available at:

https://ec.europa.eu/agriculture/index_en.htm

https://ec.europa.eu/agriculture/policy-perspectives/index_en.htm

https://ec.europa.eu/agriculture/policy-perspectives/impact-assessment/index_en.htm

https://ec.europa.eu/agriculture/markets-and-prices/index_en.htm

https://ec.europa.eu/agriculture/events/2016-outlook-conference_en

https://ec.europa.eu/agriculture/statistics_en

https://ec.europa.eu/agriculture/cap-indicators_en

https://ec.europa.eu/agriculture/consultations/cap-modernising/2017_en

https://ec.europa.eu/info/news/future-cap-whats-cooking-next-cap_en

Thank you for your attention!

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