Thinking out of the box

Somehow I missed this comprehensive report by three leading agricultural economists and an environmental specialist when it first came out. It considers the issue of further modernisation of the CAP: RISE Report

The analysis laid out in this RISE Foundation report shows how the current CAP does not make best use of the considerable resources deployed to support land managers through the necessary transition.  The largest instruments of the CAP, the pillar 1 direct payments, which account for over 70% of CAP funds are ineffective, inefficient and inequitable.  It is suggested that these direct payments should be systematically reduced and resources switched to provide targeted assistance, including transitional adjustment assistance to help farmers adapt and rise to the specific challenges of improving productivity, resource efficiency and risk management and to pay farmers to provide specific environmental and other public goods.

The report argues that the two principal aspects of the CAP requiring the most attention are land management and risk management. Where land management is concerned, the greatest worry is that the current environmental standards are not being met. The report therefore proposes a redesigned, more integrated tiered structure of supports with clearer targets on the environmental outcomes sought.

The core issue concerning risk management is that the present approach in the CAP towards market orientation has not gone far enough. Indeed the sheer scale of direct payment inhibits farmers from better mitigating the risks they face.  The report outlines the full range of instruments that are most appropriate for managing risk at the farm level, market level and nationally at times of catastrophic risk.

Finally, following the lessons that have been learnt from previous successful reforms, the report suggests some procedural changes to kick-start a more effective reform process which brings together more constructively the conflicting interests in agricultural policy. This is particularly important given the difficulty of securing effective reform in the past.

It is suggested that the Commissioners (and their Directorates General) for Agriculture and Rural Development, for Climate and for Environment15, should be tasked to work jointly to produce the next reform proposals for adoption by the College of Commissioners. Following this, the co-decision process should be correspondingly adapted. This might involve the proposals being considered by an appropriate configuration of the Council Ministers who normally serve on the Agriculture, Environment or perhaps Energy Councils.