presentation of studies results, dg agri, bruxelles 12:30...
TRANSCRIPT
EC JRC Project: „Agricultural Policy Developments and EU Approximation Process in the Western Balkans Countries (APDAP-WB)“
1
Western Balkan agriculture andEuropean integration in 2018
Presentation of studies results, DG AGRI, Bruxelles
20 September 2018
12:30-14:30
Emil Erjavec, Tina Volk, Miroslav Rednak,
SWG Agricultural Economists Network
• The accession of Western Balkan (WB) countries to the EU has gained new momentum in 2018:
– … though countries are at different stages of integration.
• Agriculture: challenging integration into the EU
– align candidates with the EU‘s legal and institutional set-up
– … and efficiently integrate their agriculture into the single market and decision-making process.
– to apply the CAP!• the CAP is a demanding and moving target for the Western Balkans.
– … however, the framework for the future CAP is predictable:• based mainly on area-based producer support and an extensive set of
rural development measures.
– Previous research:• The WB countries are at different stages of forming this kind of policy.
Motivation
2
SWG AgEconomics Network
3
• Monitoring of agricultural policy in WB since 2008!– 5 different project (EU FP7, FAO, 3 JRC)
– Since 2013 under umbrella of SWG
Work of national academic experts and support by SLO team in the fields of:
• Agricultural statistics (national and EUROSTAT)
• Ag Policy documents (programming and legal frame)
• Budgetary transfers to agriculture (APM tool)
• Country and Synthesis Agricultural Policy reports
… special topic relevant for broader public
• Audience:• ministries in the region, stakeholders, international
community, especially the EC
Objectives
Cross-country analysis of agricultural policy
− as an attempt to set up regular monitoring of agricultural policy in the region
Comparison of WB agricultural policy with:
– the current CAP;
– and with the potential CAP framework given the proposed reform and future potential enlargements after 2025.
4
A. Theoretical frame and methodological notes
B. Monitoring of agricultural policy
✓ What are the main development patterns in production and trade of WB agriculture?
✓ The new policy frame (new programming documents) in 2016-2018?
✓ Are there any significant changes in budgetary transfers and direct producer support?
C. Comparison of EU and WB agricultural policy
D. Qualitative assessment of the EU approximation process of WB agriculture 5
Content/issues
A. THEORETICAL FRAME AND METHODOLOGICAL NOTES
6
• The agricultural statistics database has been compiled for the period 2005-2016(7)
• Based on a common template organised in a set of predefined tables for specific data topics covering:
– key general (macroeconomic) indicators,
– all the main fields of agricultural statistics • Farm structure, agricultural land use and production, agricultural prices,
economic accounts for agriculture
– agri-food trade
• Published at http://app.seerural.org/agricultural-statistics/
Agricultural statistics
7
APM Agricultural policy measures tool
• Innovative classification tool for analysing budgetary transfers to agriculture:
– Long-term CAP structure (pillars, measures)
– OECD criteria for defining the lowest level of classification
• Three phases of data collection and analysis:
• Collecting data (all sources related to agriculture)
• Allocation of measures to the proper category
• Results & national and comparative analyses
• Classification scheme composed of:• Total budgetary support to agriculture divided in three main sections using
the current EU concept based on policy pillars
8
Total budgetary support to agriculture1st pillar:
MARKET AND DIRECT PRODUCER SUPPORT
MEASURES
2nd pillar:
STRUCTURAL AND RURAL
DEVELOPMENT MEASURES
3rd pillar:
GENERAL MEASURES RELATED
TO AGRICULTURE
Comparison with EU agricultural policy
• APM tool used for comparison of WB budgetary support with the EU. – All sources of public finance were included.
– The EU has no database including all EU and domestic agricultural policy budgetary transfers at EU and Member states level!
=> The main source of data for the EU was the OECD PSE/CSE database (2018) with some adjustments.
• Relative indicators:– absolute value of budgetary support to agriculture (total and by group
of measures) divided by total agricultural output and expressed in %
– absolute value of budgetary support to agriculture in EUR divided by total utilised agricultural area (UAA).
9
Comparison with EU agricultural policy
➢Qualitative assessment is based on the theoretical concept „CAP accession benchmark model“:
• 7 key bundles of issues with sub-issues
– PRE-ACCESION MODEL:• Pre-accession agricultural policy substantive framework
• Benchmark for the start of serious CAP integration efforts
– ACCESION MODEL:• Agricultural policy substantive framework upon accession
• Benchmark for the final stage of accession process (negotiation agreements, last national policy reforms)
… based on previous research and following the EC approach in the integration process. No official character of model!
10
The „CAP Accession Benchmark Model“
11
Bundles of agricultural policy issues
Pre-accession agricultural policy substantive framework(PRE-ACCESSION MODEL)
Agricultural policy substantive framework upon accession (ACCESSION MODEL)
1. Sustainable policy concept
- economic, environmentaland social objectives
- social aspect
- horizontal aspects
Expanding priorities to include environmental and social aspects of farming.
Recognizing the role of institutions of knowledge formation and transfer (AKIS).
Balancing goals (a matter of national prioritization).
Clear environmental orientation.
Expanding policy beyond narrow sectoral aspects (food, knowledge).
2. Strategic policy framework
- planning
- indicators and monitoring
- policy evaluation
- policy management
Establishing a system of analytical support for policy formation and implementation.
Adopting a formal strategic policy framework.
Establishing policy monitoring.
Strategic planning/policy cycle as the basis of policy management.
Defining intervention needs and clear intervention logic.
Policy monitoring and evaluation.
Indicators and analytical support.
3. Size and allocation of financial resources
- total available amount of funds for agricultural policy
- producer support/rural development ratio
Ensuring funding for improving farming and rural areas and absorption of funds after accession (min. 1/3 of EU supported accession levels).
Efficient RDP (sufficient funding for developmental and other impacts).
Ability to co-finance EU actions –min. 1/3-1/2 EU sources after accession.
Available funds for state aids.
Balanced ratio between direct support and RD measures.
The „CAP Accession Benchmark Model“
12
Bundles of agricultural policy issues
Pre-accession agricultural policy substantive framework(PRE-ACCESSION MODEL)
Agricultural policy substantive framework upon accession (ACCESSION MODEL)
4. Direct producer support
⁻ selection of measures
⁻ selection of products
⁻ criteria for obtaining funds
Area and headage payments prevailing (coupled and decoupled for limited sectors –no burden for sectors after accession).
Introduction of decoupled payments.
Some risk management measures.
Introduction of conditionality.
Reducing unequal treatment of potential beneficiaries.
Introducing control systems that are upgradable upon accession.
Single area decoupled payment.
Limited coupled measures (area/headage).
Conditionality for payments (environment and other standards).
Risk management measures.
Equal treatment of beneficiaries.
Functioning IACS, LPIS and other control systems for distribution of funds.
5. Competitiveness support measures
- investments in agriculture
- investment in processing
- investments in land and work
- producer organizations
- quality schemes
Diverse array of effective measures.
Functioning IPARD system of support and reasonable absorption of funds.
Functioning national system of support.
Functioning public extension service.
Established producer organisations.
Established system of setting up quality schemes.
A wide spectrum of measures for restructuring and raising competitiveness.
Support for collective investment and agri-food chains.
Support for producer organizations and quality schemes.
Support for young acquirers.
Support for advisory services.
The „CAP Accession Benchmark Model“
13
Bundles of agricultural policy issues
Pre-accession agricultural policy substantive framework(PRE-ACCESSION MODEL)
Agricultural policy substantive framework upon accession (ACCESSION MODEL)
6. Environmental measures and public goods
- conditions for obtaining funds
- agri-environment and climate measures
- support for organic farming
- support for ANC and HNV farmland
- animal welfare measures
Recognizing the environment as a priority and determining the concept of environmental and conservation elements of agricultural policy.
Determining ANC and pilot support schemes for these areas.
Support to organic farming.
Pilot schemes for AECM.
A clear concept of agri-environment and nature conservation policy.
Established and functioning conditionality system for environmental and other standards.
Appropriate AEC and organic farming support.
Support for ANC and HNV areas.
7. Quality of life and employment
- local support
- diversification of activities
- social inclusion
- improved conditions in the countryside
Creating a concept of LEADER support and pilot projects.
Functioning IPARD measures in this field.
Adopting the logic of measures in this field and conducting pilot projects.
Support for young farmers.
A functioning local support system (LEADER concept).
Extended system of diversification, employment and other broader elements of rural development.
Support for social inclusion.
Support for small farms.
B. MONITORING OF AGRICULTURALPOLICY
14
Macroeconomic and trade context
Importance of agriculture
• has decreased slightly, but remains high
Agri-food trade
• has shown an increasing trend in all six WB countries, with higher growth rates generally being recorded for exports than for imports
Source: WBs Agricultural Statistics Database 2018
15
AL BA XK MK ME RS
2013 2017 2013 2017 2013 2017 2013 2017 2013 2017 2013 2017
GVA for agriculture (% of total GVA) 22.4 22.7 8.3 7.1 14.4 11.9 11.4 10.9 9.8 9.6 9.4 7.3
Employment in agriculture (% of total employment)
52.5 38.2 18.9 18.9 n/a n/a 18.7 16.2 n/a n/a 21.3 17.2
AL BA XK MK ME RS
2013 2017 2013 2017 2013 2017 2013 2017 2013 2017 2013 2017
Agri-food exports (% of total exports) 5.9 11.0 8.2 9.6 11.9 16.2 15.3 10.6 14.2 12.9 18.9 18.7
Agri-food imports (% of total imports) 18.7 17.0 18.0 17.4 23.8 22.8 13.0 11.1 26.3 22.0 7.7 8.1
Agri-food trade 2013-17 (mio. EUR)
(exports as proportion of imports)
16
Serbia had a positive agri-food trade balance and its surplus generally shows an increasing trend. All the other WB countries are net importers of agri-food goods.
Qualitative assesment of policy development
➢ Programming structure exists, but what about implementation?
17
Agriculture and rural development strategy
National programmes / Action plans
IPARD II
AL National Agriculture and Rural Development Strategy (ISARD) 2014-2020 (2014)
Action Plan for ISARD implementation 2014-2020 (2014)
Action Plan for ISARD implementation 2016-2018 (2016)
Prepared and approved by EC (2015)
BA Mid-term development strategy for agricultural sector in the Federation of Bosnia
and Herzegovina 2015-2019 (2014)
Strategic plan for the development of agriculture and rural areas in the Republic of
Srpska 2016-2020 (2015)
Strategic plan for the Rural Development of Bosnia and Herzegovina 2018-2021 (2018)
Program for Rural development of the Federation of Bosnia and Herzegovina 2015-
2020 (2014)
In preparation
(since 2014)
XK Agriculture and Rural Development Program2014-2020 (2013)
Mid-term expenditure framework 2016-2018 (2015)
Economic reform programme 2016-2018 (2016)
Prepared
MK National Agriculture and Rural Development Strategy 2014-2020 (2014)
National program for agriculture and rural development 2018-2022 (2018)
Prepared and approved by EC (2015)
ME Strategy for the Development of Agriculture and Rural Areas 2015-2020 (2015)
Action Plan for acquis alignment, Chapter 11 – Agriculture and Rural Development 2015-
2020 (2015)
Prepared and approved by EC (2015)
RS Strategy of Agriculture and Rural development 2014-2024 (2014)
National Program for agriculture 2018-2020 (2017)
National rural development program 2018-2020 (in adoption)
Prepared and approved by EC (2016)
Total budgetary support(relative, % of agricultural output)
Budgetary support to agriculture
18
• Significant differences. High increase in Kosovo*. • Highest level in Macedonia and lowest in Albania.
*This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence
Total budgetary support
Budgetary support to agriculture
19
Evolution and composition by groups of measures (%)
0
2
4
6
8
10
12
0102030405060708090
100
13 14 15 16 17
%% MK
0
2
4
6
8
10
12
0102030405060708090
100
13 14 15 16 17
%% AL
0
2
4
6
8
10
12
0102030405060708090
100
13 14 15 16 17
%% BA
0
2
4
6
8
10
12
0102030405060708090
100
13 14 15 16 17
%% XK
0
2
4
6
8
10
12
0102030405060708090
100
13 14 15 16 17
%% ME
0
2
4
6
8
10
12
0102030405060708090
100
13 14 15 16 17
%% RS
13 16
OTHER MEASURES RELATED TO AGRICULTURE
STRUCTURAL AND RURAL DEVELOPMENT MEASURES
Direct producer support measures
Market support measures
TOTAL % of output (right scale)
BA,RS and MK highlevel of directproducersupport.
Tendency: higher support for agriculture: higher level of direct producer support!
Direct producer support(relative, % of agricultural output)
Budgetary support to agriculture
20
0
2
4
6
8
10
AL BA XK MK ME RS
2013 2014 2015 2016 2017
• Serbia: decreasing tendency; elsewhere increasing.• Very low support in Albania, relatively high in Macedonia.
Direct producer support
Budgetary support to agriculture
21
Evolution and composition by groups of measures (index)
0
2
4
6
8
10
0102030405060708090
100
13 14 15 16 17
%% MK
0
2
4
6
8
10
0102030405060708090
100
13 14 15 16 17
%% AL
0
2
4
6
8
10
0102030405060708090
100
13 14 15 16 17
%% BA
0
2
4
6
8
10
0102030405060708090
100
13 14 15 16 17
%% XK
0
2
4
6
8
10
0102030405060708090
100
13 14 15 16 17
%% ME
0
2
4
6
8
10
0102030405060708090
100
13 14 15 16 17
%% RS
13 14 15 16 17
Miscellaneous direct producer supportDisaster and other compensations to producersVariable input subsidies Direct payments based on current area/animal Direct payments based on output (price aids)TOTAL % of output (right scale)
Structural and rural development measures
Budgetary support to agriculture
22
Relative level of structural and rural development support in WB countries,
(% of output)
Agricultural budgets are less development-oriented?• low absolute and relative amounts of funds• impacts on development?
0
1
2
3
4
5
AL BA XK MK ME RS
2013 2014 2015 2016 2017
Structural and rural development measures
Budgetary support to agriculture
23
Composition of structural and rural development support in WB countries
• Funds for improving
the competitiveness
of agriculture prevail.
• Mostly for capital
investments in farm
production assets and
irrigation (MK).
• Funds intended for
improving the
environment and the
countryside are
negligible in most WBs.
• MK significant share of
rural economy
support measures.
0
1
2
3
4
5
0102030405060708090
100
13 14 15 16 17
%% MK
0
1
2
3
4
5
0102030405060708090
100
13 14 15 16 17
%% AL
0
1
2
3
4
5
0102030405060708090
100
13 14 15 16 17
%% BA
0
1
2
3
4
5
0102030405060708090
100
13 14 15 16 17
%% XK
0
1
2
3
4
5
0102030405060708090
100
13 14 15 16 17
%% ME
0
1
2
3
4
5
0102030405060708090
100
13 14 15 16 17
%% RS
13 14 15 16 17
Supporting rural economy and populationProviding environmental and societal benefitsImproving the competitiveness of agro-food sectorTOTAL % of output (right scale)
C. ASSESSMENT OF THE EUAPPROXIMATION PROCESS OF WB AGRICULTURE
24
EU Total budgetary support
EU/WB agricultural policy comparison
25
Composition of total budgetary support to agriculture in the EU
by financial sources, 2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CAP EU CAP nat CAP total State aid EU total
State aid
CAP nat
CAP EU
• Only presented EU CAP financial resources! (less than 70 % of available funds for CAP EU!)
• National co-financing (CAP nat) and State aid important!
EU and WB: Total budgetary support
EU/WB agricultural policy comparison
26
Relative level of total budgetary support to agriculture
(% of agricultural output; EUR/ha), 2017
0
50
100
150
200
250
300
350
400
450
500
02468
1012141618202224
AL BA XK MK ME RS EU total CAP total
EUR/ha%
% of total support in output total EUR/ha (right scale)
• Lower support for agriculture in WB in comparison with the EU. • The highest support: MK (around half of average total support in
EU 28).
EU Member states: relative level of total budgetary support
EU/WB agricultural policy comparison
27
(% of agricultural output; EUR/ha), 2017
Differences
between
Member states!
Co-financing of
CAP (mostly RD,
top-up for DP not
included) is about
2-4 % of output!
WB countries
have already
reached this
level.
EU and WB: Relative level of total budgetary support
EU/WB agricultural policy comparison
28
(by APM Pillars, % of agricultural output; EUR/ha), 2017
0
50
100
150
200
250
300
350
400
450
500
0
5
10
15
20
25
AL BA XK MK ME RS EUtotal
EUR/ha%
OTHER MEASURES RELATED TO AGRICULTURE
STRUCTURAL AND RURAL DEVELOPMENT MEASURES
MARKET AND DIRECT PRODUCER SUPPORT MEASURES
total EUR/ha (right scale)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
AL BA XK MK ME RS EUtotal
• Composition of support is different within the WB and compared to the EU. • However, Member states in the EU have very different structures of support.
EU and WB: Relative level of direct payments to producers
EU/WB agricultural policy comparison
29
(% of agricultural output; EUR/ha), 2017
0
50
100
150
200
250
0
2
4
6
8
10
12
AL BA XK MK ME RS EUtotal
EUR/ha%
Production decoupled direct payments
Direct payments based on other criteria
Direct payments based on current area/animal
Direct payments based on output (price aids)
total EUR/ha (right scale)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
AL BA XK MK ME RS EUtotal
• No decoupled support in WB. Area and headage payments prevail. • Output payments are a challenge for policy reforms!
EU and WB: Relative level of structural and rural
development measures
EU/WB agricultural policy comparison
30
(% of agricultural output; EUR/ha), 2017
0
20
40
60
80
100
120
140
160
0
1
2
3
4
5
6
7
AL BA XK MK ME RS EUtotal
EUR/ha%
Miscellaneous rural development measures
Supporting rural economy and population
Providing environmental and societal benefits
Improving the competitiveness of agro-food sector
total EUR/ha (right scale)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
AL BA XK MK ME RS EUtotal
• The EU is seeking to balance the main elements of sustainability. • In the WB, only MN is following this path at the moment.
EU and WB: Relative level of support for the
provision of environmental and societal benefits
EU/WB agricultural policy comparison
31
(% of agricultural output; EUR/ha), 2017
0
10
20
30
40
50
60
70
80
0
0.5
1
1.5
2
2.5
3
3.5
AL BA XK MK ME RS EUtotal
EUR/ha%
Other ecosystem related payments
Agro-environment, organic and animal welfare payments to farmers
Payments to farmers in areas with natural and environmental constraints
total EUR/ha (right scale)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
AL BA XK MK ME RS EUtotal
D. QUALITATIVE ASSESSMENT OF POLICY AND RECOMMENDATIONS
32
Policy assessment and recommendations
1. Sustainable policy concept– Commitment to sustainability, however production orientation prevails in
implementation, weak AKIS and role of knowledge and development
Recommendation:Increase role of democratic decision-making and transparent functioning; improve/introduce training and a good personnel policy in the public administration; foster rediscovery of the role of knowledge
2. Strategic policy framework– Clearly set strategic framework for agricultural policy, but announced
changes do not appear; political willingness for change?
– Quality of analytical support? Quality of planning?
Recommendation: Improve national planning and analytical structures and adopt the strategic logic thinking; modernisation of implementation and monitoring
33
Policy assessment and recommendations
3. Size and allocation of financial resources– The funding level in the WB is not critical for the start of the accession
process,
– … however there is significant room for improvement for the finalisation!
– Certain countries are neglecting their rural development policies and favouring direct support, diminishing their absorption capacity.
RecommendationIt is necessary to invest into agriculture and rural areas to prevent too great a shock due to increased competition and to increase absorption in the pre-and post-accession period.
This includes sufficient funding for rural development and a sufficiently broad array of measures.
34
4. Direct producer support– In the WB, area and headage payments prevail. These can be converted
into decoupled payments. Serious problem: output payments and support for sectors for which the EU does not grant support.
RecommendationPrepare a clear policy action plan for the period until accession and then implement it. Strong political will is necessary!
5. Measures to improve competitiveness– The impacts of existing policies is unknown. Most of the support is for
mechanisation and equipment.
– Support for small farms, creation of efficient agri-food chain is mostly missing.
RecommendationIncrease funding and broaden the array of measures (for small farms, cooperation, supply chain integration, quality schemes), increase the role of support systems and invest into public and private advisory services. 35
Policy assessment and recommendations
6. Environmental measures and public goods– Exist only in traces. Challenges for funding and public awareness. Low
absorption capacity after accession.
RecommendationAction plans should be prepared and pilot measures should be implemented. Shifts are demanding and time-consuming. A matter of modernizing the policy; the shift should be made regardless of the accession process.
7. Quality of life and employment– Some good cases. Not prioritized and insignificant in budgetary terms
(except MK).
RecommendationStrengthen the LEADER approach, support the creation and functioning of local action groups. More should be done to diversify activities, especially on farms (e.g. supplemental activities).
36
Policy assessment and recommendation
Thank you for your attention!
37
Policy assessment and recommendations