This document provides an overview of current agricultural policy and implications of reforms to the Common Agricultural Policy (CAP). It discusses: 1) Strategic challenges facing EU agriculture like increasing input costs, global food demand growth, climate change, and reduced public financing. 2) Prospects for farming and land management in England like higher commodity prices but also input costs, strong public support for land access but poor understanding of issues, and need for diverse farm incomes. 3) Successes of current policy like environmental management but also issues like disconnected schemes sometimes working against each other.

1. Overview of current policy and
implications of CAP reform
Janet Dwyer
Professor of Rural Policy
Co-Director CCRI, University of Gloucestershire

2. Outline
• Strategic needs: Challenges for agriculture
and rural areas in the EU, 2020 and beyond
• Prospects for the English uplands and the
commons
• The role of current policy – successes and
messes…..
• The CAP reform process: likely outcomes
at EU and England levels
• Reflections on possible tactics and priorities

3. EC Challenges and Opportunities
(courtesy Martin Scheele, DG Agri)
Biodiversity
Habitats Economic
Viability
Food
Bioeenergy
Biomass
Climate Change
Resource- Supply Chain
management Integration

4. Strategic challenges: EU
agriculture & rural areas
• Increasing fossil fuel prices – higher global
demand, lower / more costly / less secure supplies
• Growing global food demand (+70% by 2050)
• Climate change - pressures from temperature and
rainfall shifts
• Demographic change – shrinking workforce, ageing
population
• Continuing austerity in public finances – reduced
financing for land and people?

5. EU regions: climate change vulnerability
highest negative
impact
medium negative
impact
low negative impact
no/marginal impact
low positive impact
No data*
reduced data*
ESPON CLIMATE study

6. EU: Implications for rural
activities & resources
• Agriculture and the food sector must become
much more resource-efficient: using fewer non-
renewable inputs, conserving carbon, soil and water,
and reducing or eliminating waste

7. • ‘Multi-functionality’ of rural
land must be maintained &
increased, taking on energy
generation and non-food
products, AND sustaining food
production and leisure (all
these demands will not shrink,
but grow)
• Ecosystem services (water,
carbon) will require long-term
planning and much better
ground-level co-ordination
between actors and policies

8. • Rural communities will face
reduced central support, but
enhanced information:
- Eroding transport options
- Increased scope for distance
learning and exchange of ideas
- Continuing challenges from
ageing: capacity to cope
- Some ‘renewal’ via in-migration
(potential social, environmental and
economic gains)

9. Prospects for farming and
the commons
• Higher prices for finished products, but also for
inputs – low energy / lower-input systems favoured
• Strong public support for land management,
access, but poor understanding of issues
• Juggling to survive?: most farm household
incomes are diverse – this need won’t go away

10. Prospects for farming and
the commons
• Pressures and opportunities from other
land uses – energy, carbon?
• Continued growth in local food
networks but barriers to access / lack
of capacity to respond?

11. The role of policy
CAP Single Payment Scheme – has underpinned
farm incomes for many decades, in SW uplands and
for most sheep and beef farms across the region
For many, SPS aid has reduced since 2000 in real
terms due to growing modulation and exchange rate
effects (though some upswing in recent years)
Agri-environment – most farms now in schemes,
but lots of issues about proper design and delivery
tailored to local conditions
Disease control policy uses ‘all or nothing’ tactics,
insensitive to wider impacts, ineffective at control….

12. Policy: successes &
messes
• A legacy of environmental management: long-
term commitment to commons, better legislation
• Strong regional actors and networks borne of the
many ‘partnerships’ in recent years
BUT
• Too many disconnected schemes and initiatives
acting in opposite ways – SPS and BTB versus
ES/UES, RDPE versus laissez-faire approach to
market concentration, housing, transport –
 The mix is a mess: is this promoting resilience at
a local level?

13. CAP reform – where are we?
• Main thrust of these reforms was about
redistribution across the EU = more funding,
more access to Pillar 1 support for new
Member States
• Greening seen as a necessary ingredient for
interest groups in the EU-15
• There is agreement on both these principles,
but no one wants to lose out
• Difficult wider financial climate, but most
countries not (yet?) willing to make big changes

14. CAP reform – where are we?
• Cyprus presidency (2nd half of 2012) focused
upon securing agreement on the EU budget
for 2020 – agreement by end November 2012
• European Parliament tabled a large number of
proposed amendments – these will take some
time to be considered, even if all are rejected
• So, new CAP legislation will not be agreed
before the new budget: most likely in March
2013, under Irish Presidency – only then will
UK funding be fixed

15. Current state of play
• Budget – countries split between those
wanting increased funding for CAP and those
wanting significant cuts, but
• 9 October joint statement by French and
German Agriculture Ministers confirms a wish
to hold to the Commission’s proposal – a
freeze in nominal terms (c.7% cut in real
terms) – this appears now the most likely
outcome

16. Current state of play
Allocations and shape of Pillar 1 (SPS),
among the Member States
• likely to be based upon historic aid amounts,
with redistribution towards more ‘equal’ rates per
hectare: implies a modest cut for UK farmers
• BUT this doesn’t include modulation – England
currently takes 20% from pillar 1 to fund pillar 2
• Defra is committed to continuing modulation: at
present, max. proposed rate is 10% but this
could be increased / made more flexible

17. Current state of play
Allocations and shape of Pillar 2 aids (RDP),
among the Member States
• likely to be based upon historic aid / spending,
some adjustment (upwards, for UK) to include
more ‘objective’ criteria - i.e. not much change
to the basic allocation
BUT
RDPE is almost 50% funded by modulation:
Reduced modulation to 10% could prevent any
more new agreements in ES

18. Pillar 1
• 30% SPS conditional on ‘greening’ is accepted
as a principle, but big arguments now about what
it should mean
• UK doesn’t like the EC options, not least
because it can’t actually monitor and control them
(more disallowance)
• RPA functions may be outsourced –
opportunity or threat? Better maps would help…
• Possibility of ELS elements / some other basic
model being accepted as ‘greening equivalence’
(reduces need for modulation)?

19. Pillar 2
• Likely to be agreed more or less unchanged
from the draft regulations
• Fewer measures, each more flexible than the
current measures
• Higher rates of co-financing for certain types:
young farmers, collaborative groups, ‘innovation
partnerships’
• At least 25% of spending must go to climate
change action and/or agri-environment
• Assumption of multiple measures to reach
strategic goals: scope for more integrated
approaches, going forwards?

20. New Pillar 2 measures
„Co-operation’ article 36: funding to help set up
groups (which can get higher co-funding)
• Partnerships among different actors in the
agriculture and food chain or forestry sector and/or
with other actors, to contribute to the aims of rural
development policy
• Creation of clusters and networks
• For pilot projects, new products and processes,
sharing facilities, short supply chains, local
markets, also landscape or water management
groups
• Can fund meetings, equipment, visits, market
research, facilitation support, for up to 7 years

22. New Pillar 2 Measures
European Innovation Partnership
An initiative to attempt to stimulate a ‘step-
change’ in EU farming practice towards
greater sustainability and competitiveness
• Funding for bringing together farmers, advisors
and scientists to work in communities of
practice, to address key challenges (climate,
biodiversity, water, renewable energies,
ecosystem services)

23. Farmers
NGOs Advisors
Agri- EIP
business Operational Researchers
Group
Networking support from the centre,
higher co-financing,
a ‘prize’ for exceptional progress

24. Timetable for the RDP
• If agreement in March, Defra must draft the RDP
by August 2013
• The EU will publish implementing regulations in
summer 2013: can’t submit RDP before these
• RDP approval time at the Commission could be
up to 8 months: RDP launched spring 2014 at
the earliest: more likely summer ?
There will be a gap between spending on
the current programme and the new one

25. Reflections:
SW Uplands have been building capacity,
partnerships

26. Reflections on tactics: sorting
the mess
• We need smarter policies which acknowledge multiple
goals, and use integrated planning & delivery - join up
environment , people and economy
• We need to control and reduce the weight of controls
and bureaucracy – make policies closer to the
beneficiary, more flexible, learn from on-the-ground
experience
• We need to incentivise experimentation - learning,
doing things differently, building confidence to act
- consider the plumber… local tailoring doesn’t
have to mean higher costs

27. Pointers for a new recipe?
• Defra and national agencies are experimenting
with pilots at ‘landscape scale’ – these are
welcome, but constrained
• Local and regional networks seem stranded, or
disempowered by constant cycles of institutional
reorganisation – the best knowledge is probably
NOT in Defra (or agencies?), now
• Pillar 2 offers scope for new groups to pick up
the EU agenda, build on local partnerships and
promote new approaches
• The centre needs to ‘loosen the reins’ of control

28. The role of policy: enabling
“a supportive and responsive government is required
at a UK, devolved and local level. Action on all these
levels is needed to: address regional level inequalities;
build capacity in local communities; and mitigate
against any unintended consequences of macro level
policies at a local level.”
Carnegie Trust, 2012
- This was written about rural communities; but
the same might equally be said about future
farm policies

29. Thank you