Written evidence submitted by Valentin
Zahrnt
VALENTIN ZAHRNT IS A SENIOR FELLOW AT THE
EUROPEAN CENTRE FOR INTERNATIONAL POLITICAL ECONOMY (ECIPE) AND
EDITOR OF WWW.REFORMTHECAP.EU
1. The Commission communication does not address
key issues (such as budget size, budget distribution across instruments
and co-financing) and it remains vague on most issues it covers.
For a detailed examination of the text, see: http://www.reformthecap.eu/blog/commission-communication-cap-examination.
2. The three reform options are particularly
underdevelopped. It is clear that the Commission rejects the third,
ambitious option, which it criticized heavily in its leaked draft.
Prof Berkeley Hill even argues: "It is hard to read the Commission's
'options' for the CAP after 2013 without a feeling that there
is something rigged about it. The Commission must well know that
some of its proposals are non-starters. This concerns especially
option 2, the moderate reform scenario. In the leaked version
of the communication, the Commission has severely criticized option
3, making clear that this is just a strawman. This implies that
the most likely outcome is option 1: to broadly continue the status
quo but with some of the details tweaked."
See: http://www.reformthecap.eu/blog/commission-communication-cap-appraisal-hill.
3. The leaked and the final version are equally
disappointing. It is an attempt to greenwash direct income support.
The crux is a lowering of current cross-compliance standards and
the introduction of another layer of eco-conditionality. But the
greening of blanket subsidies is not sufficient. What is needed
are truly targeted payments that reward farmers' individual provision
of public goods in line with local conditions.
See: http://www.reformthecap.eu/blog/leaked-commission-communication.
4. The Commission proposals are incompatible
with the mainstream opinion of academics and scientific advisory
bodies.
See: http://www.reformthecap.eu/sites/default/files/1010%20comparison%20DG%20Agri%20official%20
and%20Declaration.pdf for a comparison between the communication and a declaration
by agricultural economists from across Europe issued in 2009.
See also agricultural economists' criticism of policy-makers'
status quo bias at http://www.reformthecap.eu/declaration. The
Commission contradicts the vision of environmental NGOs and other
bodies—see: http://www.reformthecap.eu/cap-visions.
5. The Commission proposals have been received
rather positively by the press/public because of their reform-minded
public-goods rhetoric. However, the key points made or implied
(maintaining the SFP with full EU-financing, a strong LFA element
that partly moves into the first pillar, a large CAP budget that
is needed to finance the proposed objectives and instruments etc)
are conservative and will appeal to the EP and most member states.
6. The current CAP, and the proposed changes,
has only minor impact on the competitiveness of UK agriculture.
It is important to avoid that a shift towards increased support
for competitiveness leads to more old-style, farm-level measures,
such as investment aid, that are distorting and administratively
burdensome. More public investment should instead be undertaken
in research and development.
7. It should be kept in mind that competitiveness
of any given sector is not a suitable policy objective. The relative
strength of different sectors and trade balances should be left
to the market. Government should only interfere if its action
promises a clear net gain for society. Declining productivity,
output, exports or market shares are no valid justifications for
governmental interference in markets.
8. The formal structure (eg two-pillar) does
not matter in itself. The crucial question is whether the non-targeted
instruments of the first pillar (market intervention and SFP)
are maintained and whether co-financing by member states is enhanced.
On the merits of co-financing, see: http://www.reformthecap.eu/blog/co-financing-of-public-goods.
9. If the UK wants to achieve a greener and leaner
CAP, it will be essential to signal 1) that the size of the CAP
budget will depend on the quality of CAP spending, 2) that reform
of the UK rebate is conditional on CAP reform (an issue that will
be crucial to win German support for CAP reform) and 3) that the
UK is willing to risk another EU crisis if the overall EU financial
framework fails to respond to EU priorities.
December 2010
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