Scitech Europa reports on the JRC analysis of the impact on the agriculture sector of different policy scenarios, providing a framework for exploration of the process of designing the CAP.
Farmers provide a stable food supply, produced in a stable way at affordable prices for more than 500 million Europeans. The European Union’s farm policy ensures a decent standard of living for farmers at the same time as setting requirements for animal health and welfare, environmental protection and food safety. Sustainable rural development completes the picture of the EU’s Common Agricultural Policy (CAP).
Agriculture is a key sector for sustainable economic development and the EU wants to ensure that agriculture remains sustainable and competitive. To achieve this goal, the EU annual budget goes towards helping farmers with income support and market measures based on market orientation linked with environmental sustainability, animal health and welfare, and food safety. The policy also guarantees sustainable rural development according to the specific needs in each EU country.
In November 2017, the European Commission published a communication on ‘The future of food and farming’ which outlined aims to modernise the CAP with a tailored, rather than ‘one size fits all’ approach, with simpler rules and a more flexible methodology. The communication followed a public consultation which showed support for a strong but simpler and more flexible CAP.
The commission’s simpler rules and a more flexible approach will ensure the CAP delivers real results in supporting farmers and it leads the sustainable development of EU agriculture.
In December 2017, at the third edition of the EU Agricultural Outlook Conference, in Brussels, Commissioner for Agriculture and Rural Development, Phil Hogan said: “Following the last two years, in which the themes were ‘agriculture at the centre of global challenges’ and ‘climate challenges and resource availability challenges for EU agriculture’, this year our focus is directly on food and farming.”
He continued to say that while keeping the current two pillar structure, the simpler, more flexible approach will set out detailed actions to reach objectives agreed at EU level. Each EU country will go on to develop their own strategic plan – approved by the commission – setting out how they intend to meet these objectives.
Climate change and pressures on natural resources will continue to affect farming and food production. The future CAP should reflect higher ambition concerning resource efficiency, environmental care and climate action, Hogan said: “Climate change, climate action and sustainable development are (or at least should be) priorities for all of us. The European Union is, of course, fully committed to its international obligations which include the COP21 targets and the United Nations’ Sustainable Development Goals. The CAP and farmers and agri-food businesses have a key role to play.
“The DG AGRI background paper on the ‘Climate and environmental challenges facing EU agriculture and rural areas’ identifies the issues of climate change, water (pollution and scarcity) and soil (erosion, organic matter and compaction) as particular challenges facing farmers. In terms of air quality, agriculture is the main emitter of ammonia in the EU. In terms of biodiversity and landscapes, the paper describes plant and animal species in Europe as ‘a pool of genetic diversity that needs to be preserved and will help our society face various challenges.’
“It is for all these reasons that the Communication clearly commits the CAP and, by extension, farmers to ‘a higher level of environmental and climate ambition, and address citizens’ concerns regarding sustainable agricultural production’,” the Commissioner added.
Food and farming
In the recent communication ‘The future of food and farming’, Jyrki Katainen, European Commission Vice-President in charge of Jobs, Growth, Investment and Competitiveness, said: “The Common Agricultural Policy has been on our plate since 1962. While we have to make sure it keeps delivering, for example, healthy and tasty food for consumers and jobs and growth to rural areas, the CAP also has to evolve along with other policies. Our proposal is an important step to modernise and simplify the CAP, following the results of the broad consultation with stakeholders. The new delivery model introduced by the commission will provide greater subsidiarity to member states and calls on them to establish CAP strategic plans, which will cover their actions under Pillar I and Pillar II, enabling simplification, better coherence and monitoring of results.”
Other proposals include the use of modern technologies to support farmers; attention to encouraging the younger generation to take up farming; addressing concerns regarding sustainable agricultural production, including health, nutrition, food waste and animal welfare; coherent policies; and creating a platform on risk management on how best to help farmers cope with the uncertainty of climate and other risks.
On 2 February 2017, the European Commission launched a consultation on the future of the CAP in order to better understand where the current policy could be simplified and modernised. During the three-month consultation period, the European Commission received more than 320,000 replies, mostly from individuals. The consultation found that most respondents wanted to keep a strong Common Agricultural Policy at European Union level but that it needed to be simpler and more flexible, and more focused on meeting the key challenges of ensuring a fair standard of living for farmers, preserving the environment and tackling climate change.
The Joint Research Centre (JRC), the European Commission’s science and knowledge service, supports EU policies with independent scientific evidence throughout the whole policy cycle. They develop methods, tools and systems for use within agricultural monitoring activities applied to Europe and other areas of the world. Providing early warning of crop shortages or failure provides swift information for EU development aid activities to support food insecure countries, as part of the JRC’s work on global food security. Within the CAP, techniques and guidance are continually being refined for the standardised measurement of field areas, identification of crop types, geo-location of landscape features and assessment of environmental impacts. These techniques for agriculture monitoring are a key part of the Integrated Agricultural Control System (IACS) which is at the core of CAP implementation in Europe. The JRC provides methods and technical guidance in support of this implementation.
Science for an evolved CAP
The JRC, has recently released a report analysing the impact on the agriculture sector of different policy scenarios, providing a framework for future exploration of the process of designing the future CAP. A positive future for food and farming with a strong EU agri-food sector also depends on an effective CAP.
Scientists at the JRC have applied three exploratory policy scenarios to characterise future visions for the CAP up to 2030. The ‘no-CAP’ scenario – removing all budgetary support to farmers – could lead to a strong decline in farming income by 2030, less jobs in agriculture and a return to the EU as a net importer of agricultural products. Whatever policy choices are made, smaller farms are likely to be more heavily impacted by changes to regulations and subsidies.
The report considers two other scenarios that are variants from the ‘no-CAP’ scenario, and which take polar paths, against a reference scenario, to characterise different versions for the CAP. The first, ‘Income and Environment’ scenario sees the CAP budget being maintained at its current level with stricter environmental rules which could result in an overall higher income while avoiding an increase in greenhouse gas emissions; and second, ‘A Liberalisation and Productivity’ scenario considers a strong reduction in subsidies and a shift to productivity-increasing measure and further trade liberalisation. This scenario could potentially lead to a reduction in farming income, job losses and agricultural production.
The JRC’s scientific insight helps policymakers understand the scope and impacts of potential efforts to ensure CAP is fit for today’s world: a policy that is focused on meeting the challenges of a fair standard of living for farmers, preserving the environment and tackling climate change.
The new JRC study assesses trade, demand, the market impacts on production, and prices of policy scenarios. It also evaluates the impacts on land use, the environment and farmer income from the global to the farm level. The analysis considers increases in agricultural production and farm income as positive policy outcomes and increases in greenhouse gas emissions and nitrogen surplus as negative ones.
Throughout the analysis, emphasis has been put on the vulnerability of small farms, particularly focusing on marginal areas of the EU, where agriculture is more important economically than the market income. The trade liberalisation scenario reveals opportunities for some. However, it possesses risks for far more agri-food sectors.
The report employs the iMAP platform models MAGNET, CAPRI and IFM-CAP in an integrated manner covering different spatial scales including global, European Union, member states, NUTS 2 region and individual farm levels. These were used in the analysis of the social, economic and environmental impacts of various options for the next CAP. The use of three different models and their relations adds complexity, particularly in the comparison results across models.
Global food security
The CAP faces the challenges of evolving towards a malfunctional policy that demands to the constant changing needs of society. It must, therefore, respond to demands related to increased market efficiency and competitiveness; promoting jobs and ‘smart’ growth; contributing to climate change mitigation while adapting to a changing climate; ensuring responsible and sustainable biologically renewable resource management; and still respecting its initial aim of ensuring food security.
According to the United Nations Food and Agriculture Organization (FAO) by effect of demographic growth and other factors such as changes in diets and incomes, demand for food is likely to grow by 70% until 2050. Currently, the outlook of increasing global demand is mirrored by considerable uncertainties of supply liked to the unpredictable economic and political issues, as well as climatic biological development. This implies a need for accelerated agricultural production growth in developing countries.
The JRC is also involved in increasing the food availability of the world, and their activity has contributed to a more effective and efficient management of the CAP through the provision of a broader range of technical support services to DG Agriculture and member state administrations.
JRC research in the area of food security focuses on the issue of trying to determine the role of factors such as research and development investment, genetic process, changes in management practices, patterns of agricultural inputs use and policy changes in the final productivity of wheat. Three main challenges related to the increasing of food availability, according to the JRC, include supporting the dominant small-scale mixed crop/livestock farming systems; ensuring innovations from demand-driven research are accessible to farmers; and allowing international trade from surplus to deficit areas by regionally more integrated agricultural policies. On the other hand, the EU and other developed countries’ agriculture and food industries contribute to global food security by being important suppliers of agricultural and food products in a growing world market. The Common Agricultural Policy can impact global food security and its possible effects should be considered.
The study by the JRC offers a well-established, model-based agro-economic analysis with new and up-to-date features, with a particular attempt to deliver a transparent study report. When the report was being finalised, uncertainties remained about the future of the agriculture sector. These include Brexit, the ongoing free trade negotiations, the implementation of COP21 and SDGs, the Renewable Energy Directive, and the evolving bioeconomy among others.
The idea of post-2020 farm policy is once again under consultation and a wide range of policy options are also in consideration. However, changes are due to come into force from the beginning of January 2018 which will
continue the drive towards a simpler, more modern Common Agricultural Policy. Major improvements will come into force following the adoption by the Council of agriculture ministers and the European Parliament of the agriculture and rural development part of the so-called Omnibus regulation.
In December, the EU released the communication ‘EU farm policy rules to be further simplified’, commenting on the omnibus regulation, Commissioner Hogan said: “I welcome the developments in the European Parliament and the Council, which pave the way for the implementation of a series of significant simplification measures, which will make the lives of farmers and other CAP beneficiaries easier. These include the important areas of simplification of the rules for financial instruments, the improvement of risk management tools and greater flexibility for the active farmer provision.
“I want to acknowledge the role and hard work of the EP rapporteurs and the Estonian Presidency during the trialogue process for ensuring that these simplification measures will be available to farmers from 1 January 2018. The adoption last month of the Commission’s Communication on the CAP is further evidence of our commitment to continue with the agenda of bringing greater and much-needed simplification to our farmers and all stakeholders.”
The Omnibus simplifies and strengthens existing EU rules on a wide range of agriculture issues.
How is the European Commission tackling food sustainability?
Farming – agriculture and livestock, tree cropping, fisheries and aquaculture – is a key economic sector in many developing countries, and small-scale farming remains the economic base for the majority of the poor in the world. As a result, the European Initiative for Sustainable Development in Agriculture (for a discussion of some of the issues facing sustainable agriculture in Europe from EISA see the last edition of Pan European Networks) was founded with the common aim of developing and promoting sustainable farming systems, which are an essential element of sustainable development.
However, climate change, environmental degradation, biodiversity reduction, global population growth and economic growth are putting increasing strain on the world’s natural resources. The gap between food supply and demand is set to widen. Agriculture therefore faces multiple challenges: it must become more sustainable on a dwindling resource base and strengthen the resilience of the vulnerable while having to feed and nourish an increasing number of people.
Along with sustainable development the European Union needs to secure sustainable animal production, and to do so all challenges such as differing systems of production i.e. systems with more confined productivity, or grassland-based systems, must be taken into account. Livestock farmers must also take stock of these challenges whilst ensuring the wellbeing of their animals as the European animal production sector is so diverse.
The European Commission have seen a significant need to research the account under its ‘Horizon 2020’ research programme. The commission has taken an inclusive approach and launched a call for a European Research Area Network (ERA-NET) on sustainable animal production, to ensure effective research. By bringing together multiple research partners a multidisciplinary research approach will be used, this type of approach is needed to tackle the sustainability challenges.
This article will appear in SciTech Europa issue 26, which will be published in March, 2018.