Presentation by Florian Dittrich of DG-AGRI of the European Commission during CAPIGI 2011 in Amsterdam on 6 April 2011.

1. The CAP towards 2020: future demands for
innovation
Florian Dittrich
Olof S.

2. Outline
1. The context: Europe 2020
2. Where are we with the CAP?
3. Why do we need a reform?
4. New objectives, future instruments and policy options
5. Innovation Union and Innovation Partnerships
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3. 1. The CAP’s contribution to Europe 2020
• SMART growth – by increasing resource efficiency and improving
competitiveness through knowledge transfer and innovation,
developing high value added and quality products
• SUSTAINABLE growth – by maintaining the food, feed and
renewable production base, environmental public goods, ensuring
sustainable land management
• INCLUSIVE growth – by unlocking local potential, diversifying rural
economies, accompanying restructuring
• CAP has to contribute to these aims.
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4. 2. Where are we with the CAP ?
Background of reform
• Entry into force of Lisbon Treaty
• Budgetary framework ends in 2013
• Need to align CAP post-2013 to Europe 2020 strategy
• Consultation conference and institutional discussion
Roadmap for the reform
• 18 November 2010: Presentation of Communication
• 23 November 2010 - 25 January 2011: Consultation on impact
assessment (> 300 contributions)
• Summer 2011: proposal for new budgetary framework
• Autumn 2011: Proposals + impact assessment for CAP reform
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5. CAP expenditure and CAP reform path
(2007 constant prices)
EU-10 EU-12 EU-15 EU-25 EU-27
Source: European Commission - DG Agriculture and Rural Development
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6. 3. Why do we need a reform?
To respond to challenges ahead
Economic
challenges
• Food security
• Price variability
• Economic crisis
• Competitiveness
& efficiency
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7. Recent evolution of agricultural input and
output prices
Source: Eurostat
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8. 3. Why do we need a reform?
To respond to challenges ahead
Economic Environmental
challenges challenges
• Food security • Water/air quality
• Price variability • Habitats and
biodiversity
• Economic crisis
• Soil depletion
• Climate change
adaptation
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9. Climate change
- Possible impacts on EU agriculture
! Floods risk
! Hotter and drier summers
! Sea levels
! Risk crop pests, diseases
! Crop, forage yields
" Animal health, welfare
" Summer rainfall
! Winter storms, floods
! Length growing season,
yields
! Suitable farmland
! Pests, diseases risks
! Winter rainfall, floods
" Summer rainfall
! Risk drought, water stress
! Soil erosion risk
! Yields, range of crops
" Water availability
Source: DG Agriculture and Rural Development, based on EEA reports, JRC and MS academic studies
! Risk drought, heat spells
! Risk soil erosion
" Growing season, crop yields
" Optimal crop areas
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10. 3. Why do we need a reform?
To respond to challenges ahead
Economic Environmental Territorial
challenges challenges challenges
• Food security • GHG emissions • Vitality of rural
areas
• Price variability • Soil depletion
• Diversity of EU
• Economic crisis • Water/air quality
agriculture
• Habitats and
biodiversity
Equity and balance of support
Contribution to Europe 2020 strategy
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11. 4a. What are the objectives with the reform?
Viable food Sustainable Balanced territorial
production management of development
natural resources
and climate action
• To contribute to • To guarantee the • To support rural
farm income and provision of vitality and
limit its variability public goods employment
• To improve sector • To foster green • To promote
competitiveness growth through diversification
and share in food innovation
• To allow social and
chain value-added
• To pursue climate structural diversity
• To compensate change mitigation in rural areas
areas with natural and adaptation
constraints
Common EU response needed
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12. 4b. What policy instruments?
Better targeted to objectives Based on two pillar structure
Direct payments
• Redistribution
• Better targeting
• Redesign:
• Greening of direct
payments
• Capping of
payments
• Small farmers
support
• Areas with
specific natural
constraints
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13. Average direct payments per potentially
eligible area and beneficiary
Direct payments net ceilings fully phased-in (in 2016)
Source: European Commission - DG Agriculture and Rural Development
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14. 4b. What policy instruments?
Better targeted to objectives Based on two pillar structure
Direct payments Market measures
• Redistribution • Market orientation
• Better targeting • Streamline and
simplification
• Redesign:
• Greening of direct • Improved food
payments chain functioning
• Capping of
payments
• Small farmers
support
• Areas with
specific natural
constraints
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15. 4b. What policy instruments?
Better targeted to objectives Based on two pillar structure
Direct payments Market measures Rural development
• Redistribution • Market orientation • Environment, climate
change and innovation
• Better targeting • Streamline and
simplification
• Redesign: • Address risk
• Greening of direct • Improved food management
payments chain functioning
• Capping of • Improved coherence
payments with other EU policies
• Small farmers
support
• Areas with
specific natural
constraints
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16. 4c. What policy options?
Continue the reform process by introducing
further gradual changes while adjusting the most
Option 1
pressing shortcomings (e.g. more equity in the
distribution of direct payments)
Capture the opportunity for reform ensuring that
CAP becomes more sustainable and balanced
Option 2
(between policy objectives, MS and farmers)
through more ‘green’ targeted measures
More fundamental reform focusing entirely on
environmental and climate change objectives
Option 3
through rural development, moving away from
income support and most market measures
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17. Summary: Preliminary results from the public
consultation
• Majority finds that policy scenarios are consistent with the objectives of the
reform.
• Only very few preferred a no-policy option
• Option 2 most popular. Option 1 slightly more popular than 3.
• Option 2 is believed to lead to higher administrative costs
• Greening is popular among the wider public but many farmers are
concerned about effects on competitiveness
• CAP has a role to play on agricultural markets
• Strong support for Rural Development measures, not least agri-
environmental schemes
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18. 5a. Innovation Union Communication
COM(2010) 546 final 6 October 2010
• Strategic approach
– Partnership with Member States & stakeholders
– Whole cycle of innovation: from blue sky research to market uptake
• Tackling weaknesses
– Under-investment
– Fragmentation & framework conditions
• Building on strengths
– Focus on societal challenges
– Broad concept of innovation involving all actors
• A distinctive European approach to innovation: partnerships
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19. • A new approach to innovation which is:
– Societal challenge-driven, going beyond the technological focus
– Cross-sectoral, reflecting the cross-cutting nature of challenges
– Resource-pooling, around a common target
– To facilitate the innovation process
• A successful Partnership should:
– Have a clear target and a convincing roadmap
– Bring EU-added value
– Use both supply-side tools and demand-side policies
– Engage Member States and key stakeholders from the private
sector
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20. What is the state of play for the first EIPs?
• The Commission is currently examining candidate
proposals for a first round of partnerships: agriculture,
raw materials, water, smart cities, smart mobility
• Pilot partnership on Active and Healthy Ageing: lessons
learnt from this EIP will help developing the candidate
EIPs
• Candidate partnerships will need to be approved by the
European Council and the Parliament
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21. • Amongst the intended Partnerships is one to:
– Improve the supply of foodstuffs produced in a resource-efficient,
productive and low emission way through improved agricultural and
food-processing methods (p.25 Innovation Union)
• The objective of this Partnership is to:
– Deliver a safe and steady supply of food, feed and biomaterials –
both existing products and new ones. There is a need to improve
processes to preserve our environment, adapt to climate change
and mitigate it. The Partnership would build a bridge between
cutting-edge research and technology and the farmers, businesses
and advisory services (p.43 IU).
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22. Which are the challenges for innovation in
agriculture?
AGRI-Commissioner: agricultural EIP has to enhance
productivity and efficiency, whilst ensuring sustainable
resource management:
“Produce more with less”
• Build bridges between cutting-edge research and
technology and farmers, businesses, stakeholders,
industry and advisors
• Work on increased knowledge exchange and provide
feedback about research needs
• Mobilise multiple approaches, including technological
and non-technological innovations
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23. Where is scope for innovation in agriculture ?
some examples
• Solutions for increased resource efficiency (soil, water,
energy, fertilisers, pesticides,…) and reduced GHG
emissions, e.g. ICT and satellite based precision
farming, decision support systems for pest management,
etc.
• Solutions with respect to recycling, bio-refinery (biomass
conversion to produce fuels, power, heat, and value-
added chemicals), development of specific primary
production (e.g. pharmaceutical plants)
• Solutions for farm management beneficial to eco-system
services and soil functionality (e.g. functional green
infrastructures, pest suppressive soils, etc.)
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24. For further information
• The CAP after 2013
http://ec.europa.eu/agriculture/cap-post-2013/index_en.htm
• The Communication on the future of the CAP
http://ec.europa.eu/agriculture/cap-post-2013/communication/
index_en.htm
• Innovation Union
http://ec.europa.eu/research/innovation-union/index_en.cfm
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25. Thank you
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26. • European Innovation Partnerships – agriculture is involved
• European Research Area framework – removing obstacles
• Streamlining EU programmes – simpler access
• New financial instruments – start-ups, risk sharing, loans
• Reform of standardisation system – EU patent, screening
• Public procurement of innovation – dedicated budgets
• Regions & Social innovation pilot – citizen-centred approaches
• Stronger monitoring – new scoreboard
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27. How will the Partnership work?
• EIP will rely on outcomes provided by research
community, which will feed concrete actions of EIP
• ‘Operational Groups’: may carry out projects testing and
applying innovative processes, products and
technologies (involving farmers, scientists, advisers and/
or business)
• Support for cooperation and setting up of the ‘operational
groups’ (e.g. farmers, advisers, enterprises,
researchers, administration)
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28. How are ICT going to be involved?
• ICT and satellite navigation support provides for an
important potential to shift the development patterns
towards agricultural practices that preserve the
environment and eco-system services.
• Known applications are EGNOS and GALILEO
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