I have quit CAP work, and economics more generally. My thanks go to all those who have followed this site and with whom I had the pleasure to collaborate in the past.
I would be glad to hand over this site to a professor who supports bold CAP reform in line with the declarations posted on this site. Please contact me via email if you are interested.
(And please do not contact me with any questions about the CAP anymore.)
Stephan von Cramon-Taubadel, Professor at the University of Göttingen, says that models are like maps: they are never entirely realistic but help us find the way. In the case of the post-2013 CAP, the reform path does not even depend on the traditional models because the main issue is not greater market orientation.
Jean-Marc Boussard is a former director of the French agricultural research institute INRA and highly experienced in models of agriculture that incorporate uncertainty. Reacting to the recent ‘Guide to the CAP reform politics’, he raises important questions about what economists really know about agriculture and what kind of recommendations they can give with sufficient certainty. Readers are welcome to contribute short comments or longer responses (1-3 pages) in this debate that will be posted on this blog.
On 13 January, Dacian Cioloş gave testimony to the UK Environment, Food and Rural Affairs Committee on CAP reform. Here is what he said.
Does the EU need agricultural tariffs and subsidies to ensure its food security? The food price surges in 2007/08 and the 2010 spike in wheat prices have pushed this question into the headlines. In December 2010, the FAO food price index even exceeded its 2008 peak.
Since the beginning of OECD calculations in 1986, EU agricultural policies have transferred about €2.5 trillion from taxpayers and consumers to farmers. If an interest rate of 5% is assumed (a conservative figure compared to the social returns from investments in education and research), the present value of these transfers rises to about €5 trillion. If the agricultural subsidies and tariffs between 1957 and 1985 were added, for which no OECD data exists, we would get two-digit trillion numbers. But this money does not raise farm wages in the long run.
Farmers and speakers from DG Agri have repeatedly complained about the double squeeze of farm incomes: falling farm gate prices combined with rising costs for inputs, such as energy and fertilizer. The disastrous year of 2009 had wiped out all the gains of the last 15 years, they said. But the upswing of 2010 has been generous with farmers, and future price increases promise further improvements in farm incomes.
Promoting a more liberal and competitive Europe would gain the UK more than only focusing on cuts to the budget.
By Stefan Tangermann, retired OECD director for trade and agriculture and Professor Emeritus, University of Göttingen. He expresses his disappointment with the Commission communication on the post-2013 CAP and thinks about what the Commission could have proposed instead.
Whereas the Socialist group published a surprisingly reform-oriented position paper in March 2010, the EPP position paper of September 2010 trumps even DG-Agri’s CAP orthodoxy. Already in the past, the EEP has repeatedly condemned the Socialists for betraying European farmers, for instance in dealing with the Doha trade negotiations and the milk fund. But don’t conservative parties stand for low taxes, small government, free trade and market orientation? Don’t conservatives wish to spend more EU money on research and development? And isn’t there a conservative case for preserving landscapes and nature, rather than giving the money away as income support?