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Home arrow Economics arrow Disaggregated impacts of CAP reforms : proceedings of an OECD workshop.

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Conclusions

The net impact of the decisions by the French Minister responsible for agriculture with respect to application of the CAP Health Check to France is a slight narrowing of the gap between the levels of direct payment per farm (Table 10.8) and a greater consistency in the amount of decoupled direct payment per hectare (Velazquez, 2008). Furthermore, the measures adopted permit a more targeted allocation of funds to the protection of natural resources and remuneration of environmental and territorial services (Bureau and Mahe, 2008). The redistribution of support is to the detriment of producers of arable crops and to the benefit of producers of grazing livestock, particularly those engaged in extensive systems.

Any analysis of the CAP Health Check must be set against the broader context of discussions (which have already begun) on the financial prospects of the European Union during the period 2014-20. At issue is whether decisions made at the domestic level will be adequate, in the long term, to justify the “French agricultural model” to the other Member States (Cooper et al., 2007), in light of the fact that the latter often pursue simpler agricultural policies and have to contend with less diversity in terms of agricultural products, structures and geography. From this perspective, two avenues need to be prioritised (Guyomard et al., 2007): increasing the share of funds dedicated to risk management (health, climate, price, income); and increasing budgets for “new challenges” in the area of the environment (quantitative and qualitative water management, protection of biodiversity, reduction of greenhouse gases). However, several provisions, in particular retention of the agri-environmental grass premium and new aid for productive grasslands, should help greater account to be taken of environmental and territorial goals, thus bolstering the legitimacy of the public’s support for French agriculture and farmers.

In the wake of the decisions of 23 February 2009, only 75% of the current suckler cow premium will remain coupled — along with the new sheep and goat premium and various smaller premiums — accounting for a total of approximately EUR 900 million (in contrast to coupled payments amounting to over EUR 2.7 billion in 2008). France will thus be able to provide objective evidence to its European partners that it has taken a major step towards practising an agriculture that is more sensitive to market signals, namely prices (through greater decoupling of Pillar 1 aid) and, simultaneously, towards an agricultural policy focused on the environment and the land (for example, by means of the new support for grasslands, increased assistance for more sustainable production methods). This new, greater share of decoupled support in total support should strengthen the Community’s position in negotiations on domestic supports to agriculture (Bureau et al., 2007; Guyomard et al., 2007) currently being conducted under the aegis of the World Trade Organization (WTO). This presupposes that, on one hand, there will be diplomatic breakthroughs in the floundering Doha Round, and, on the other hand, that the classification of the single payment in the “green box” will be retained (Oxfam et al., 2006; Swinbank and Tranter, 2006). Finally, to the objection that decoupled payments continue to be granted on the basis of the historical model, we can reply that the link with the past of every farm has been very slightly weakened.

 
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