Παρουσίαση1

Supervisor: Professor Jerzy WilkinStudent: Stavros Skartsoras

New Common Agricultural

Policy Reform (2014-2020)

& the Overview of Greek

Agriculture

The presentation will be developed to the following sections:

-A brief overview of NEW Common Agricultural Policy Reform (2014-2020)

-Basic Legislative Regulations of new CAP reform (2014- 2020) on EU Member States

- The predicted distribution of the new CAP funding in the European and Greek Territory

-The overview of Greek Agriculture and Rural Sector

-The effects of Financial Crisis on Greek agriculture and the consequences

-Conclusions and Provisions of Greek Agriculture regarding new CAP’s contribution.

1st Section: The Overview of NEW CAP 2014-2020

Introduction Why do we need CAP?

WHAT DO WE WANT FROM AGRICULTURE IN THE EU ?

Food Security Land Management

Viable Rural Areas Competitiveness in a Global Market

Responding to Climate Change



WHY DO WE NEED AN AGRICULTURAL POLICY ?

Volatile Markets

Public Goods

Sustainable rural environment



Policy Consequences

Common Rules

Basic Direct Payments

Safety net

Targeted measures addressing specific needs

Review


New CAP reform challenges and Objectives

-Income support and safety net mechanisms for producers

-Improved the integration of environmental requirements

-Reinforced support for rural development across the EU

Challenges


CAP BUDGET MFF (2014-2020)

Multi Financial Framework Ceiling 2014-2020 (in billion EUR)

2014-2020 Ceiling

(Current Prices)

2014-2020Ceiling

(2011 Prices)

Pillar 1 312,74 277,85

Pillar 2 95,58 84,94

Total CAP 408,31 362,79

Source: DG Agriculture and Rural Development

• Pillar 1 cut by 1,8%

• Pillar 2 cut by 7,6%

• Represents the entire ceiling


EVOLUTION OF POLICY AND SPENDING

• 1992 radical change in the orientation of CAP Budget

• 1992 Market Management represented 90% of CAP, while 2013 dropped to 5%

• By 2014 Direct support allocated to Coupled Support

• Expenditures between pillars may change (up to 15%)


NEW FEATURES OF THE CAP

-Joint Provisions of Public and Private Goods.-Award Farmers for Environmental Friendly Implements on landscapes,

farmland biodiversity, Climate Stability- First Pillar (Greening)

-Efficient, Targeted and Coherent.

- Flexibility for funding by the Member States.

- Objectives for the 3 Pillars -CAP more effectiveness

-Better targeted instruments of the first pillar-Voluntary measures of the second pillar


HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED

Competitiveness

Sustainability Improves

Targeting and efficiency of

Agricultural Policy

Agricultural Sector

1st Section: A brief Overview of NEW CAP 2014-2020

HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED Enhanced competitiveness of EU agriculture

A more sustainable EU agriculture

Changing Market Orientation of EU Agriculture.

Existing Restrictions on Production volumes for Rural Products.

Modernization of schemes

Measures to facilitate Producer Cooperation to boost competitiveness.

Other instruments under the second pillar which enhance competiveness at farm level

400 mill EUR established to secure the financial resources


HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED A more sustainable EU agriculture

• Improve Environmental Performance.

• Combined and Complementary effects of various Instruments.

• 30% of the National Direct payment envelope and Rewards Farmers for Greening Policy.

• Rural development will continue to play a pivotal role in achieving the CAPs environmental objectives and in combating climate change.

• Arm Advisory System, insights gained from the Innovation Partnership and applied research, which should help farmers to implement appropriate solutions for their specific situations.


HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED A more effective and efficient CAP:

…through more targeted and equitable direct payments

• more equitable distribution of payments across and within Member States and a strategic approach to spending.

• Firstly direct payments are better targeted by limiting support to those who are actively engaged in agricultural activities.

• possible additional support for ANCs will contribute to specific environmental and territorial objectives.

• from 2015, all young farmers entering the sector will have the opportunity to get an additional first pillar payment, which can still be complemented by a start-up aid under the second pillar.

• Member States also have the option to further target direct payments through other optional schemes.

• Member States may also grant limited coupled support to secure the future of potentially vulnerable sectors.


HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED A more effective and efficient CAP:

…and a more strategic approach to RD spending

Rural Development Priorities Actions targeted under both Pillars

2nd Section: Basic Legislative Regulations of new CAP reform (2014- 2020)

Introduction

Legislative Texts

European Commission

EU MemberStates Agriculture

Ministers

European Parliament

CAP Legislation:Rural Development: Regulation 1305/2013"Horizontal" issues such as funding and controls: Regulation 1306/2013Direct payments for farmers: Regulation 1307/2013Market measures: Regulation 1308/2013

http://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:32013R1305





LEGISLATION ON RURAL ENVIRONMENT

New Rules on Second Pillar

Target for six Broad “Priorities” and detailed “focus areas” will cover:

• Promoting knowledge and innovation• Improving competitiveness of all types of farming• Sustainable forest Management Promotion the organization of the food chain - including

the processing and marketing – and risk management• Restoration, conservation and enhancement of ecosystems• Promoting resource efficiency and the shift towards a low carbon economy• Promote social inclusion, poverty reduction and economic development in rural Regions



New Rules on Second Pillar

• Member States should spend at least 30% of EU agricultural funds• Combat measures climatic mate change• 5% for the approach LEADER

Rural development policy will also be better coordinated with other policies through a common strategic framework at EU level and through partnership agreements at national level covering all the support from the European Structural and Investment Funds (EAFRD, ERDF, the Fund Cohesion, the ESF and the EMFF) in each Member State.

subprograms such as:• young farmers, small farmers mountain areas women in rural areas • mitigation of climate change or the adaptation biodiversity • local business supply chains. In somecases will benefit from higher rates of support under the subprograms.



• European Partnership Innovation one for agricultural productivity and sustainability – PES

• PES will promote efficient use of -resources-productivity-low carbon emissions -The development of agriculture and forestry environmentally friendly and durable to climate change.

• Greater collaboration between agriculture and research to accelerate technology transfer to farmers.



• Mitigation of climate change

• Adaptation

• Environmental challenges

• Economic development

• Training



• European Innovation Partnership

• Joint projects



• Starting businesses grantstions(up to 70.000 €)

• General investment in fixed assets

• Training

• Consulting services



• Business start-up aid to 15.000 € per small farm.



• Fuses & mutual funds

• Extended to include

• Allow aid (up to 70% losses) from a fund if income reduced by 30%.



• Support for the creation of groups / organizations SMEs



• Common contracts

• Interconnections

• With appropriate training / information

• Greater flexibility



• Greater visibility of the sector



• Awareness raising

• Support strategies

• Promote flexibility in conjunction with other funds at local level, e.g. cooperation rural-urban regions


LEGISLATION ON "Horizontal" issues

• Reduction in areas where the rules properly applied.

• Increased where the areas with problems



• aid for rural development

• payments to vines

• condition of soil

• animal welfare

• health standards for animals and plants



• Crisis reserve of EUR 400 million. EUR (in 2011 prices)

• Returned to farmers in the form of direct payments next year.


• Provide full transparency regarding all beneficiaries



LEGISLATION ON Direct Payments

• 70% Direct Payments of the national envelope

• Amounts committed as premiums for young farmers

• bonuses in disadvantaged areas

• redistributive aid and coupled payments



Switch to more evenly aid levels per hectare:

• implement national or regional approach (based on administrative or agronomic criteria)

• ensure that there will be a gradual increase for farmers who receive less than 90% regional / national average

• Amounts available to farmers receiving more than the regional / national average will adapt accordingly, while the Member States can reduce any "losses" at 30%



• The basic aid granted new entrants to the profession young farmers (under age 40) will be increased by an additional 25% for the first five years employment

• 2% of national envelope maximum



• Payments related to specific products

• Depending amounts limited to 8% of the national envelope:

-0-5% for coupled payments in the current CFP-13% if the current level of connectivity to tied aid is higher than 5%.



• Grant an additional payment for areas with natural constraints

• Up to 5% of the national envelope



• Already implemented practices environmentally friendly considered to replace these theseessential requirements

• For others, agri-environmental measures

• The new regulation contains a list of such equivalent measures



• Member States will use 30% of their national envelopes.

• There are three main steps:• Maintenance of permanent grassland and • Diversification of agricultural production• Maintaining an "ecological focus area" equal to at least 5% of the arable land exploitation for holdings larger than 15 hectares

• ….In other wise the offenders will lose up to 125% ecological aid they deserve.



• No reduction to the first 2,000 euro direct aid for each farmer

• fed the crisis reserve when necessary



More tightened Rules for ‘active farmers’



• Restrict the rights of the aid program is to be granted in 2015 to 135% or 145% of the number of hectares declared in 2009

3rd Section: The predicted distribution of the funding of the new CAP in the European and Greek Territory.

Comparison credits MFF 2014/2020 and 2007/2013

Commitments / paymentsMFF MFF CHANGE MFF

Millions €Millions €

Smart and inclusive growth

- 1a. Competitiveness (growth and employment)

- 1b. Economic, social and territorial cohesion

2. Sustainable development (Resources – CAP)

3. Security and citizenship

4. Europe in the World

5. Administration

6. Hedges

Total commitment appropriations

As a percentage of GNI

Total payment appropriations

- As a percentage of GNI

Source: European Council, a summary of the agreement on the MFF 2014-2020, 04/07/2013

Billions €

Comparison credits MFF 2014/2020 and 2007/2013 by sector (At constant 2011 prices)

The new CAP reform associated with support of:

• rural income

• and survival facing the financial crisis.

• addressing the consequences of climate change

• further enlargement of the European Union


Distribution of resources for sustainable development

Direct Payments, 71.05%

Market Measures,

3.41%

Rural development , 22.76%

Fishing, 1.76%

Life , 0.82% Organisations , 0.09%

Margin, 0.11%

Distribution of resources for sustainable development in the EU-28

Direct Payments Market Measures Rural developmentFishing Life Organisations

Remarked reduction in 2020

36.1% of the total EU budget

compared to 44.3% 2007


Market Measures

Direct Payments

Rural Development

SUM CAP Expenditure

SUM CAP Expenditure

Change

Source: European Parliament, Directorate General for Internal Policies, Policy Department B: European Council Conclusions on the Multiannual Financial Framework 2014-2020 and the CAP, July 2013


Source: European Parliament, Directorate General for Internal Policies, Policy Department B: European Council Conclusionson the Multiannual Financial Framework 2014-2020 and the CAP, July 2013

Pillar 1 Direct Payments Pillar 2 Rural development

Bill

ion

Eu

ro


Source:


U

Latvia

Poland

SlovakiaLithuania

Bulgaria

RomaniaEstonia

Member StatesChange

UK

Greece

FranceGermany

Netherlands

ItaliaDenmarkBelgium

Source


1) France 14.30%2) Malta 10.72%3) Italy 1.40%4) Croatia 0.00%5) Belgium -1,20%6) Finland -4%7) Denmark -4,50%8) UK -5,5%9) Greece -5,9%10) Luxembourg -7,8%

.

.

.26) Poland -29,00%27) Cyprus -30,30%28) Czech Republic -33,8%

Change%

Period2014-2020

Period2007-2013Member States

4th Section: The overview of Greek Agriculture and Rural Sector

The agricultural sector in Greece

Primary Sector



Primary Sector

1995 - 2005

9.95% 5.2%



Primary Sector

4.9% in 2004



Primary Sector

• Working population decreasesContinuously

1981 2004

28% 12,6%

• Age structure of employed in agriculture.

63% Over 45Years Old



Primary Sector

• 132 million acres• agricultural land covers

about 40.2%• 17.9% is forested land• 38.5% corresponds to natural

areas• 2.2% to artificial • 1.2% in inland waters



Primary Sector

Eastern Macedonia & ThraceCentral Macedonia

Western Macedonia

Thessaly

Epirus

Ionian Islands

Western Greece

Central Greece

Peloponnese

Attica

North Aegean

South Aegean

Crete

Sum

Regions

GDP / capita compared to GDP in EU25

Economic the growth planned primary Sector % of Greek economy

Employment agricultural sector total population (25-65 years)

Age structure in agricultural sector. Proportion of farmers age <35 years to farmers age> 55 years



Primary Sector


Western Macedonia

Thessaly

Epirus

Ionian Islands

Western Greece

Central Greece

Peloponnese

Attica

North Aegean

South Aegean

Crete

Sum

Regions


Economic the growth planned primary sector% of Greek economy





Primary Sector


Western Macedonia

Thessaly

Epirus

Ionian Islands

Western Greece

Central Greece

Peloponnese

Attica

North Aegean

South Aegean

Crete

Sum

Regions


Economic the growth planned primary Sector % of Greek economy





Primary Sector

• 67% comes from the plant production

• 30% from livestock • 3% from fisheries and forests 67%

30%

3%

Production Value

Plant Production Animal Production Fisheries and Forests



Primary Sector

• arable crops covering 21.8 million. ha. (63.3%)

• in tree 10 million. ha. (29.5%),• vineyards 1.3 million. ha.

(3.4%)• and vegetables 1.1 million. ha.

(3.8%)

63%

30%

3% 3.80%

Percentage distribution of cultivated land (NSSG, 2005)

Arable Tree Vegetables Wines



Percentage contribution of different products in the value of agricultural production (NSSG, 2005).

1)Meat2) Vegetables 3)Cotton

Products Turn out

Cereals 9%

Cotton 13%

Vegetables 15%

Fruits 9%

Olive oil 10%

Milk 13%

Meat 15%

Other 19%




Exceed 25% of the value of agricultural production agricultural gross fixed capital formation account for 4% of total.




• Agricultural products amounted to 12.5% of the total value of imports and the value of exports stood at 22.9%.

• Trade with EU countries represent 86% of total volume of transactions




• employs 124,000 workers (3.2% of total employed in the country),

• the Gross Value Added of sector accounts for 2.5% of total GVA in the country and participates in 71.7% to the total value of exports of agricultural products and

• 16.4% in the value of exports for all products.



Feta Cheese Macedonian halva



Florina Prespa beans



26 oils, 15 species of edible olives 20 kinds of cheese, 22 fruits, vegetables and nuts and other products such as saffron, the mastic, roe Messolonghi


Structural problems of Greek agriculture

• 800.000 farms

• 44 – 48 acres each farm

• 75% of farm has an area of 50 acres

• Fragmentation of agricultural land

Number and size of holdings

Causes of the fragmentation of agricultural holdings

a) Free market and sale of fields b) Inheritance lawc) Construction of large infrastructure

projects d) Restoration of refugees e) "Sure" investment


Structural problems of Greek agriculture

Number and size of holdings

Disadvantages resulting from the fragmentation

• Waste of time for the transition from land to parcel• Increase of transport costs of inputs • Limited improvements in exploitation • crop surveillance Difficulty • High cost of transportation of agricultural products

Timeless performance and problems of Greek agriculture

• The interest of Greek Farmers to focus on subsides by 1981

• Gross output (Instant Prices 1993)

Source: Processing of Eurostat

5th Section: Timeless performance - problems and the Effects of Financial Crisis on Greek agriculture

• output is increased by 10% until 2000

• After successive fluctuations falls around 2010

• 10 percentage points occurred in the periods 2000-03 and 2005-07

• a small rise in 2008 and then decline slightly


The Agricultural Household income per fully employed



• fall is stable after 1994• all Greek farms decreased to

about half• Sharp fall exhibit after 2004

Portugal

Greece ItalySpain Portugal


The Agricultural Household income per holding




The trade balance of food sector in Greece



Source

Exports Imports Balance


Source: Greek Statistical Authority

Primary Sector Secondary Sector

Employment


A sector of economic activity with specific characteristics and problems

Global economic crisis of recent years, develops an agricultural crisis, with clear economic and other dimensions.

The Influence in Agriculture of financial crisis that erupted in 2008 in the US and Europe

Focuses on the economic and "structural" aspect of the current crisis

5th Section: Timeless performance and problems and The effects of Financial Crisis on Greek agriculture

Greek Agriculture in Financial Crisis Period

5th Section: The effects of Financial Crisis on Greek agriculture

The consequences of the Russian Embargo

Trade Balance in Agriculture Products Greece Russia

Imports Exports Balance

EUR

O

Fruit and VegetablesSmokeCereal



• Fruit and Vegetables• Smoke• Cereal



fell to 357 million. euro, while the products falling under embargo decreased by 38.5% and reached 77 million. EUR 125 million. EUR in 2013. Of these the hardest hit were the bass, whose exports fell at 81.5%, mandarins (-81.5%),

kiwi (-60.6%), cucumbers (-51.3%) and apricots (-37.1%).

6th Section: Conclusions and Provisions of Greek Agriculture regarding new CAP’s contribution.

Innovative ideas on agriculture and livestock have now ... sponsor the new CAP (Common Agricultural Policy). Farmers who want to exploit the possibilities opened up by the new rural development programs (2015-2020) is already looking for clever ideas to go their production a step ahead.

Winners, based on the "tools" of the new CAP, it seems that those producers will come not limit themselves only to direct subsidies but also take advantage of the new programs for rural development (Second Pillar). These include free advice from agronomists (agronomists, farmers, etc.)

Bonus to farmersBesides the innovative farmers, the new CAP gives "bonuses" to farmers. Direct payments increased by 6%. Alongside forage legumes (eg, clover), the production of quality goat milk and the increase of livestock in cattle will get and coupled payments (subsidies associated with the production of 13 products)

Supervisor: Professor Jerzy WilkinStudent: Stavros Skartsoras

New Common Agricultural

Policy Reform (2014-2020)

& the Overview of Greek

Agriculture

Παρουσίαση1

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