Download Health Check

“CAP health check and the
future of milk quota”
a Dutch perspective
Tallinn, 8 February 2008
Roald Lapperre
head of Common Agricultural Policy division
Ministry of Agriculture, Nature and Food Quality
The Hague, Netherlands
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Lay out of presentation (1)
•Facts and figures NL agriculture
•Health Check
•Future of dairy quota system
1
Relevance of agriculture in NL
• Agriculture is a pillar of the NL economy
• 10,4 % of total employment
• 10,1 % of total GDP
• Second biggest agricultural exporter in the
world (aim to become no. 1 this year)
• Flowers and food most competitive sectors
of total economy
• Agriculture covers 70% of NL land surface
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3
Farm numbers 1990-2015
Number of farms
1990
2004
2015
% change
1990-2004
2004-2015
Total
124.900 83.890 59.170
-33
-29
dairy
39.550 22.280 13.820
-44
-38
arable farming
16.260 12.630 10.540
-22
-17
combined farming
14.790
7.770
4.690
-47
-40
pig and poultry
12.590
6.700
4.360
-47
-35
glass horticulture
10.240
6.390
4.240
-38
-34
9.990
6.680
5.020
-33
-25
open air horticulture
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Expectations for the future
• Best market expectations for horticulture
• Positive outlook for dairy sector; however
declining EU-support and rising environmental
standards factors to watch
• Difficult times ahead for pig and poultry;
production will continue however, albeit at lower
output levels
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Lay out of presentation (2)
•Facts and figures NL agriculture
•Health Check
•Future of dairy quota system
6
Gemeenschappelijk
Landbouwbeleid
Pijler 1
Markt- en
prijsbeleid
€ 450 mln
Directe
inkomenssteun
€ 850 mln
Pijler 2
?
Plattelandsbeleid
€ 70 mln
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Big changes in policy environment
• Continuous CAP reform: MacSherry 1992, Agenda
2000, MTR 2003, Meditterranean package 2004, Sugar
2005, Fruits and Vegetables, Wine 2007, HC 2008, etc.
• More member states: from 12 to 15 to 25 to 27 (and
30?) with unchanging budget; 5 mio farmers in EU-15
in 2004 and 15 mio farmers in EU-27 by 2007!
• Increased diversity; more changes to come
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Key elements “Health Check”
1. Changing modalities of direct income support
2. Scaling down remaining market/price policies
3. How to deal with modulation/new challenges?
4. Let’s not forget simplification!
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Govt coalition agreement
NL priorities in CAP domain:
• Better linking of income support with public goods
delivered by agriculture, such as food safety, food
quality, food security, rural landscape, environment and
animal welfare
• Financing of CAP within Community framework
• Stick to 2005 budget agreement for period 2007-2013
• Gradual approach
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Direct income support
NL priorities:
• Linking direct income support to public services delivered by agriculture in cases
of market failure
• NL wants to move from the present historical model to a regional model of income
support
• EU wide flat rate not a good solution!; a “flatter rate” at regional level to be
preferred
• A more flexible article 69 can be a helpful tool
• Full decoupling of all income support should be end goal
• Continue but further simplify cross compliance
• Sympathetic towards towards upper and lower limits in direct income support
• Sympathy for wish EU-10 to keep SAPS
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Market and price policies
NL priorities:
• Phasing out export refunds by 2013 (parallelism!)
• Scale down remaining intervention policies to a genuine
safety net mechanism
• End milk quota system by 2015 and agree on soft landing
• Keep set aside as a market instrument, albeit at 0%
• Give special attention to potential negative effects of scaling
down market policies for nature, environment and
biodiversity (set aside, milk quota enlargement)
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Modulation
NL priorities:
• Not in favour of 8% extra modulation
• Addressing new challenges can better be done in first pillar!
• More flexible article 69 better alternative to modulation
• If modulation were to take place, flexibility needed in
choosing destination of money and no upper or lower
spending limits
• Finding means for national co-financing not an easy task!
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New challenges
NL priorities:
• Sympathetic to Commission ideas to focus on
climate change, water management (and add animal
welfare to list)
• Hesitant to include bio energy and risk and crisis
management to list
• Let’s not forget simplification!
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EU agricultural support
History
Future?
40
Targeted
payments
Payments
based on
historical
entitlements
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Payments on
area,
livestock
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Price, output,
input support
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20
20
15
20
10
20
05
20
04
20
01
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96
19
91
0
19
86
% PSE
30
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Lay out of presentation (3)
•Facts and figures NL agriculture
•Health Check
•Future of dairy quota system
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Future of dairy quota system
NL priorities:
• Clear signal quota system will end in June 2015 as foreseen
• Soft landing very important from Dutch perspective because of high
quota prices
• Total debt to banks for quota loans amounts to EUR 7 billion at
present
• Farmers need time to write down these investments!
• Very much in favour of enlarging quota with 2 - 3% this year
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Options for soft landing
NL priorities:
• Enlargement of quota by e.g. 2% per year first choice
• Lowering super levy could help, but difficult to control because
of lack of predictability
• Skipping present fat correction factor positive option for NL, but
only useful for limited number of other Member States
• Tradability of quotas between member states acceptable for NL,
but unlikely to be acceptable in EU-perspective
• Ready to accept call for accompanying policies for less favoured
(mountainous) production areas
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Thank you for your attention!
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