FarmPolicy

December 13, 2018

“Analysis From Brussels” –By Roger Waite – What is the CAP Health Check?

Editor’s Note: On Tuesday, the European Commission published its proposals for the so-called Health Check of the Common Agricultural Policy (CAP).

Following is an outline of the main issues associated with the Health Check, which was prepared by Roger Waite. Roger is editor of AGRA FACTS, the Brussels-based newsletter on EU agriculture policy, and is a Journalism Fellow at the German Marshall Fund of the United States.

In addition, supplemental news coverage regarding yesterday’s Health Check developments has been posted at this FarmPolicy.com page; and an update from today regarding U.S. farm policy is available here: “Farm Bill: Average Crop Revenue Election (ACRE) Could Be Expensive; Commodity Prices- Hearings on Volatility; Food Prices- Biofuels.”

What is the CAP Health Check?

By Roger WaiteRoger is editor of AGRA FACTS, the Brussels-based newsletter on EU agriculture policy, and is a Journalism Fellow at the German Marshall Fund of the United States. “Analysis from Brussels” is posted exclusively at FarmPolicy.com.

What is the Health Check?
In the June 2003 and April 2004 CAP reforms, it was agreed that the various policy changes agreed for CAP direct payments would have to be reviewed 2 years after the last [Old] EU Member State had implemented its model of the Single Farm Payment. The EU budget for agriculture has been fixed until 2013, but it was still felt necessary to review the policy for the period until then. Nine Member States introduced their version of the Single Farm Payment in 2005, but the remaining six waited until 2006. Hence the need for the review to happen this year.

Why “Health Check”?
The 2003 “Fischler” reforms were originally billed as the “Mid-Term Review” and intended as a basic review of the 1999 policy reforms. However, with the impending accession of 10-12 New Member States – and an early political agreement by EU leaders on the levels of CAP spending for 2007-2013 – it turned out to be a much more radical reform. The forthcoming exercise is basically the same thing that was originally intended for 2003. However, because of the radical connotation of the phrase “Mid-Term Review”, the Commission decided that there had to be a different name for this exercise and came up with “Health Check” in order to underline that it was a necessary examination, but not a further reform (in order to reassure farmers).

Process & Timing
The decision-making process in the EU requires the European Commission to come forward with legislative proposals for changing existing CAP rules. These are published today. The proposals then pass to the Council and the European Parliament, and the political intention is that everything can be agreed in November, with almost all sides absolutely adamant that the ink will be dry before the end of the year. The changes would then start to apply from 2009/10. Because the EU budget has only been agreed until 2013, the policy cannot make any [budgetary] commitments for what will happen thereafter.

(more…)

News Updates on the CAP “Health Check”

Categories: Audio /EU /Food Prices

The European Commission (EC) issued a press release yesterday which noted that, “The European Commission today proposed to further modernise, simplify and streamline the Common Agricultural Policy and remove remaining restrictions on farmers to help them respond to growing demand for food. The so-called CAP Health Check will further break the link between direct payments and production and thus allow farmers to follow market signals to the greatest possible extent. Among a range of measures, the proposals call for the abolition of arable set-aside and a gradual increase in milk quotas before they are abolished in 2015, and a reduction in market intervention. These changes will free farmers from unnecessary restrictions and let them maximise their production potential. The Commission also proposes an increase in modulation, whereby direct payments to farmers are reduced and the money is transferred to the Rural Development Fund. This will allow a better response to the new challenges and opportunities faced by European agriculture, including climate change, the need for better water management, and the protection of biodiversity.”

(more…)

Farm Bill: Average Crop Revenue Election (ACRE) Could Be Expensive; Commodity Prices- Hearings on Volatility; Food Prices- Biofuels

Farm Bill

Dan Morgan reported in today’s Washington Post that, “A major new program in the recently enacted farm bill could increase taxpayer-financed payments to farmers by billions of dollars if high commodity prices decline to more typical levels, administration and congressional budget officials said yesterday.

“The potential costs came to light as administration officials pored over details of the 673-page, $307 billion legislation. President Bush has promised to veto the measure, which he called ‘bloated.’ The House and Senate passed the bill by bipartisan margins large enough to override him unless dozens of lawmakers switch sides.”

(more…)