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Supervisor: Professor Jerzy Wilkin
Student: Stavros Skartsoras
New Common
Agricultural
Policy Reform
(2014-2020)
& the Overview
of Greek
Agriculture

The presentation will be developed to the following sections:
-A brief overview of NEW Common Agricultural Policy Reform (2014-2020)
-Basic Legislative Regulations of new CAP reform (2014- 2020) on EU Member
States
- The predicted distribution of the new CAP funding in the European and Greek
Territory
-The overview of Greek Agriculture and Rural Sector
-The effects of Financial Crisis on Greek agriculture and the consequences
-Conclusions and Provisions of Greek Agriculture regarding new CAP’s contribution.

1st Section: The Overview of NEW CAP 2014-2020
Introduction Why do we need CAP?
WHAT DO WE WANT FROM AGRICULTURE IN THE EU ?
Food Security Land Management
Viable Rural Areas
Competitiveness
in a Global Market
Responding to
Climate Change

WHY DO WE NEED AN AGRICULTURAL POLICY ?
Volatile Markets
Public Goods
Sustainable rural environment

Policy Consequences
Common Rules
Basic Direct Payments
Safety net
Targeted measures addressing specific needs
Review

New CAP reform challenges and Objectives
-Income support and safety net
mechanisms for producers
-Improved the integration of
environmental requirements
-Reinforced support for rural
development across the EU
Challenges

CAP BUDGET MFF (2014-2020)
Multi Financial Framework Ceiling 2014-2020 (in billion EUR)
2014-2020
Ceiling
(Current Prices)
2014-2020
Ceiling
(2011 Prices)
Pillar 1 312,74 277,85
Pillar 2 95,58 84,94
Total CAP 408,31 362,79
Source: DG Agriculture and Rural Development
• Pillar 1 cut by 1,8%
• Pillar 2 cut by 7,6%
• Represents the
entire ceiling

EVOLUTION OF POLICY AND SPENDING
• 1992 radical change in the
orientation of CAP Budget
• 1992 Market Management
represented 90% of CAP,
while 2013 dropped to 5%
• By 2014 Direct support
allocated to Coupled
Support
• Expenditures between
pillars may change (up to
15%)

NEW FEATURES OF THE CAP
-Joint Provisions of Public and Private Goods.
-Award Farmers for Environmental Friendly Implements on landscapes,
farmland biodiversity, Climate Stability
- First Pillar (Greening)
-Efficient, Targeted and Coherent.
- Flexibility for funding by the Member States.
- Objectives for the 3 Pillars
-CAP more effectiveness
-Better targeted instruments of the first pillar
-Voluntary measures of the second pillar

HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED
Competitiveness
Sustainability
Improves
Targeting and
efficiency of
Agricultural Policy
Agricultural Sector

1st Section: A brief Overview of NEW CAP 2014-2020
HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED Enhanced competitiveness of EU agriculture
A more sustainable EU agriculture
Changing Market Orientation of EU Agriculture.
Existing Restrictions on Production volumes for Rural Products.
Modernization of schemes
Measures to facilitate Producer Cooperation to boost
competitiveness.
Other instruments under the second pillar which enhance
competiveness at farm level
400 mill EUR established to secure the financial resources

HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED A more sustainable EU agriculture
• Improve Environmental
Performance.
• Combined and Complementary
effects of various Instruments.
• 30% of the National Direct
payment envelope and Rewards
Farmers for Greening Policy.
• Rural development will continue
to play a pivotal role in achieving
the CAPs environmental
objectives and in combating
climate change.
• Arm Advisory System, insights
gained from the Innovation
Partnership and applied
research, which should help
farmers to implement
appropriate solutions for their
specific situations.

HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED A more effective and efficient CAP:
…through more targeted and equitable direct payments
• more equitable distribution of payments across and within Member
States and a strategic approach to spending.
• Firstly direct payments are better targeted by limiting support to
those who are actively engaged in agricultural activities.
• possible additional support for ANCs will contribute to specific
environmental and territorial objectives.
• from 2015, all young farmers entering the sector will have the
opportunity to get an additional first pillar payment, which can still
be complemented by a start-up aid under the second pillar.
• Member States also have the option to further target direct
payments through other optional schemes.
• Member States may also grant limited coupled support to secure
the future of potentially vulnerable sectors.

HOW THE KEY OBJECTIVES OF THE REFORM ARE ADDRESSED A more effective and efficient CAP:
…and a more strategic approach to RD spending
Rural Development Priorities Actions targeted under both Pillars

2nd Section: Basic Legislative Regulations of new CAP reform (2014- 2020)
Introduction
Legislative Texts
European
Commission
EU Member
States Agriculture
Ministers
European
Parliament
CAP Legislation:
Rural Development: Regulation 1305/2013
"Horizontal" issues such as funding and controls: Regulation 1306/2013
Direct payments for farmers: Regulation 1307/2013
Market measures: Regulation 1308/2013

LEGISLATION ON RURAL ENVIRONMENT
New Rules on Second Pillar
Target for six Broad “Priorities” and detailed “focus areas” will cover:
• Promoting knowledge and innovation
• Improving competitiveness of all types of farming
• Sustainable forest Management Promotion the organization of the food chain - including
the processing and marketing – and risk management
• Restoration, conservation and enhancement of ecosystems
• Promoting resource efficiency and the shift towards a low carbon economy
• Promote social inclusion, poverty reduction and economic development in rural Regions

New Rules on Second Pillar
• Member States should spend at least 30% of EU agricultural funds
• Combat measures climatic mate change
• 5% for the approach LEADER
Rural development policy will also be better coordinated with other policies through a common strategic
framework at EU level and through partnership agreements at national level covering all the support from
the European Structural and Investment Funds (EAFRD, ERDF, the Fund Cohesion, the ESF and the EMFF) in
each Member State.
subprograms such as:
• young farmers, small farmers mountain areas women in rural areas
• mitigation of climate change or the adaptation biodiversity
• local business supply chains. In some
cases will benefit from higher rates of support under the subprograms.

• European Partnership Innovation
one for agricultural productivity and
sustainability – PES
• PES will promote efficient use of
-resources
-productivity
-low carbon emissions
-The development of agriculture and
forestry environmentally friendly
and durable to climate change.
• Greater collaboration between
agriculture and research to
accelerate technology transfer to
farmers.

• Mitigation of climate
change
• Adaptation
• Environmental challenges
• Economic development
• Training

• European Innovation
Partnership
• Joint projects

• Starting businesses
grantstions
(up to 70.000 €)
• General investment in fixed
assets
• Training
• Consulting services

• Business start-up aid to
15.000 € per small farm.

• Fuses & mutual funds
• Extended to include
• Allow aid (up to 70%
losses) from a fund if
income reduced by 30%.

• Support for the creation of
groups / organizations
SMEs

• Common contracts
• Interconnections
• With appropriate training /
information
• Greater flexibility

• Greater visibility of the
sector

• Awareness raising
• Support strategies
• Promote flexibility in
conjunction with other
funds at local level, e.g.
cooperation rural-urban
regions

LEGISLATION ON "Horizontal" issues
• Reduction in areas where
the rules properly applied.
• Increased where the areas
with problems

• aid for rural development
• payments to vines
• condition of soil
• animal welfare
• health standards for
animals and plants

• Crisis reserve of EUR 400
million. EUR (in 2011
prices)
• Returned to farmers in the
form of direct payments
next year.

• Provide full transparency
regarding all beneficiaries

LEGISLATION ON Direct Payments
• 70% Direct Payments of
the national envelope
• Amounts committed as
premiums for young
farmers
• bonuses in disadvantaged
areas
• redistributive aid and
coupled payments

Switch to more evenly aid levels per
hectare:
• implement national or regional
approach (based on administrative
or agronomic criteria)
• ensure that there will be a gradual
increase for farmers who receive less
than 90% regional / national average
• Amounts available to farmers
receiving more than the regional /
national average will adapt
accordingly, while the Member
States can reduce any "losses" at
30%

• The basic aid granted new entrants
to the profession young farmers
(under age 40) will be increased by
an additional 25% for the first five
years employment
• 2% of national envelope maximum

• Payments related to specific
products
• Depending amounts limited to 8% of
the national envelope:
-0-5% for coupled payments
in the current CFP
-13% if the current level of
connectivity to tied aid is
higher than 5%.

• Grant an additional
payment for areas with
natural constraints
• Up to 5% of the national
envelope

• Already implemented
practices environmentally
friendly considered to
replace these these
essential requirements
• For others, agri-
environmental measures
• The new regulation
contains a list of such
equivalent measures

• Member States will use 30% of their
national envelopes.
• There are three main steps:
• Maintenance of permanent
grassland and
• Diversification of agricultural
production
• Maintaining an "ecological focus
area" equal to at least 5% of the
arable land exploitation for holdings
larger than 15 hectares
• ….In other wise the offenders will
lose up to 125% ecological aid they
deserve.

• No reduction to the first
2,000 euro direct aid for
each farmer
• fed the crisis reserve when
necessary

More tightened Rules for
‘active farmers’

• Restrict the rights of the
aid program is to be
granted in 2015 to 135% or
145% of the number of
hectares declared in 2009

3rd Section: The predicted distribution of the funding of the new CAP in the European and Greek Territory.
Comparison credits MFF 2014/2020 and 2007/2013
Commitments / payments
MFF MFF CHANGE MFF
Millions €Millions €
Smart and inclusive growth
- 1a. Competitiveness (growth and employment)
- 1b. Economic, social and territorial cohesion
2. Sustainable development (Resources – CAP)
3. Security and citizenship
4. Europe in the World
5. Administration
6. Hedges
Total commitment appropriations
As a percentage of GNI
Total payment appropriations
- As a percentage of GNI
Source: European Council, a summary of the agreement on the MFF 2014-2020, 04/07/2013
Billions €
Comparison credits MFF 2014/2020 and 2007/2013 by sector
(At constant 2011 prices)
The new CAP reform
associated with support of:
• rural income
• and survival facing the
financial crisis.
• addressing the
consequences of climate
change
• further enlargement of
the European Union

Distribution of resources for sustainable development
Direct Payments,
71.05%
Market
Measures,
3.41%
Rural development
, 22.76%
Fishing, 1.76%
Life , 0.82% Organisations , 0.09%
Margin, 0.11%
Distribution of resources for sustainable development
in the EU-28
Direct Payments Market Measures Rural development
Fishing Life Organisations
Remarked
reduction in 2020
36.1% of the total EU
budget
compared to 44.3%
2007

Market
Measures
Direct
Payments
Rural
Development
SUM CAP
Expenditure
SUM CAP
Expenditure
Change
Source: European Parliament, Directorate General for Internal Policies, Policy Department B: European
Council Conclusions on the Multiannual Financial Framework 2014-2020 and the CAP, July 2013

Source: European Parliament, Directorate General for Internal Policies, Policy Department B: European Council Conclusions
on the Multiannual Financial Framework 2014-2020 and the CAP, July 2013
Pillar 1 Direct Payments Pillar 2 Rural development
BillionEuro

Source:

U
Latvia
Poland
Slovakia
Lithuania
Bulgaria
Romania
Estonia
Member States
Change
UK
Greece
France
Germany
Netherlands
Italia
Denmark
Belgium
Source

1) France 14.30%
2) Malta 10.72%
3) Italy 1.40%
4) Croatia 0.00%
5) Belgium -1,20%
6) Finland -4%
7) Denmark -4,50%
8) UK -5,5%
9) Greece -5,9%
10) Luxembourg -7,8%
.
.
.
26) Poland -29,00%
27) Cyprus -30,30%
28) Czech Republic -33,8%
Change
%
Period
2014-2020
Period
2007-2013Member States

4th Section: The overview of Greek Agriculture and Rural Sector
The agricultural sector in Greece
Primary Sector

Primary Sector
1995 - 2005
9.95% 5.2%

Primary Sector
4.9% in 2004

Primary Sector
• Working population decreases
Continuously
1981 2004
28% 12,6%
• Age structure of employed in
agriculture.
63% Over 45Years Old

Primary Sector
• 132 million acres
• agricultural land covers
about 40.2%
• 17.9% is forested land
• 38.5% corresponds to natural
areas
• 2.2% to artificial
• 1.2% in inland waters

Primary Sector
Eastern Macedonia &
ThraceCentral Macedonia
Western Macedonia
Thessaly
Epirus
Ionian Islands
Western Greece
Central Greece
Peloponnese
Attica
North Aegean
South Aegean
Crete
Sum
Regions
GDP /
capita
compared
to
GDP in
EU25
Economic
the growth
planned
primary
Sector % of
Greek
economy
Employment
agricultural
sector
total
population
(25-65
years)
Age
structure in
agricultural
sector.
Proportion of
farmers
age <35 years
to farmers
age> 55 years

Primary Sector
Eastern Macedonia &
ThraceCentral Macedonia
Western Macedonia
Thessaly
Epirus
Ionian Islands
Western Greece
Central Greece
Peloponnese
Attica
North Aegean
South Aegean
Crete
Sum
Regions
GDP /
capita
compared
to
GDP in
EU25
Economic
the growth
planned
primary
sector% of
Greek
economy
Employment
agricultural
sector
total
population
(25-65
years)
Age
structure in
agricultural
sector.
Proportion of
farmers
age <35 years
to farmers
age> 55 years

Primary Sector
• 67% comes from the plant
production
• 30% from livestock
• 3% from fisheries and forests67%
30%
3%
Production Value
Plant Production Animal Production Fisheries and Forests

Primary Sector
• arable crops covering 21.8
million. ha. (63.3%)
• in tree 10 million. ha. (29.5%),
• vineyards 1.3 million. ha.
(3.4%)
• and vegetables 1.1 million. ha.
(3.8%)
63%
30%
3% 3.80%
Percentage distribution of cultivated land
(NSSG, 2005)
Arable Tree Vegetables Wines

Percentage contribution of different products in the value of agricultural production (NSSG, 2005).
1)Meat
2) Vegetables
3)Cotton
Products Turn out
Cereals 9%
Cotton 13%
Vegetables 15%
Fruits 9%
Olive oil 10%
Milk 13%
Meat 15%
Other 19%

Exceed 25% of the value of
agricultural production
agricultural gross fixed capital
formation account for 4% of total.

• Agricultural products
amounted to 12.5% of the total
value of imports and the value
of exports stood at 22.9%.
• Trade with EU countries
represent 86% of total volume
of transactions

• employs 124,000 workers (3.2%
of total employed in the
country),
• the Gross Value Added of
sector accounts for 2.5% of
total GVA in the country and
participates in 71.7% to the
total value of exports of
agricultural products and
• 16.4% in the value of exports
for all products.

Feta Cheese
Macedonian halva

Florina Prespa beans

26 oils,
15 species of edible olives
20 kinds of cheese,
22 fruits, vegetables and
nuts and
other products such as
saffron, the mastic, roe
Messolonghi

Structural problems of Greek agriculture
• 800.000 farms
• 44 – 48 acres each farm
• 75% of farm has an area of 50 acres
• Fragmentation of agricultural land
Number and size of holdings
Causes of the fragmentation of
agricultural holdings
a) Free market and sale of fields
b) Inheritance law
c) Construction of large infrastructure
projects
d) Restoration of refugees
e) "Sure" investment

Structural problems of Greek agriculture
Number and size of holdings
Disadvantages resulting from the fragmentation
• Waste of time for the transition from land to parcel
• Increase of transport costs of inputs
• Limited improvements in exploitation
• crop surveillance Difficulty
• High cost of transportation of agricultural products

Timeless performance and problems of Greek agriculture
• The interest of Greek Farmers to focus on subsides by 1981
• Gross output (Instant Prices 1993)
Source: Processing of Eurostat
5th Section: Timeless performance - problems and the Effects of Financial Crisis on Greek agriculture
• output is increased by 10%
until 2000
• After successive fluctuations
falls around 2010
• 10 percentage points
occurred in the periods 2000-
03 and 2005-07
• a small rise in 2008 and then
decline slightly

The Agricultural Household income per fully employed
• fall is stable after 1994
• all Greek farms decreased to
about half
• Sharp fall exhibit after 2004
Portugal
Greece ItalySpain Portugal

The Agricultural Household income per holding

The trade balance of food sector in Greece
Source
Exports Imports Balance

Source: Greek Statistical Authority
Primary Sector Secondary Sector
Employment

A sector of economic activity with specific characteristics and problems
Global economic crisis of recent years, develops an agricultural crisis, with
clear economic and other dimensions.
The Influence in Agriculture of financial crisis that erupted in 2008 in the
US and Europe
Focuses on the economic and "structural" aspect of the current crisis
5th Section: Timeless performance and problems and The effects of Financial Crisis on Greek agriculture
Greek Agriculture in Financial Crisis Period

5th Section: The effects of Financial Crisis on Greek agriculture
The consequences of the Russian Embargo
Trade Balance in Agriculture Products Greece Russia
Imports Exports Balance
EURO
Fruit and Vegetables
Smoke
Cereal

• Fruit and Vegetables
• Smoke
• Cereal

fell to 357 million. euro, while the products falling under embargo decreased by 38.5% and reached 77 million. EUR
125 million. EUR in 2013. Of these the hardest hit were the bass, whose exports fell at 81.5%, mandarins (-81.5%),
kiwi (-60.6%), cucumbers (-51.3%) and apricots (-37.1%).

6th Section: Conclusions and Provisions of Greek Agriculture regarding new CAP’s contribution.
Innovative ideas on agriculture and livestock have now ... sponsor the new CAP
(Common Agricultural Policy). Farmers who want to exploit the possibilities opened up
by the new rural development programs (2015-2020) is already looking for clever
ideas to go their production a step ahead.
Winners, based on the "tools" of the new CAP, it seems that those producers will
come not limit themselves only to direct subsidies but also take advantage of the new
programs for rural development (Second Pillar). These include free advice from
agronomists (agronomists, farmers, etc.)
Bonus to farmers
Besides the innovative farmers, the new CAP gives "bonuses" to farmers. Direct
payments increased by 6%. Alongside forage legumes (eg, clover), the production of
quality goat milk and the increase of livestock in cattle will get and coupled payments
(subsidies associated with the production of 13 products)

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