Offermann

Slide1: 

Impacts of the 2003 CAP reform on structure and competitiveness of organic farming systems Frank Offermann and Hiltrud Nieberg

Introduction: 

Introduction Background Organic as well as conventional farming heavily influenced by the CAP 2003 CAP reform will affect both organic and conventional farming

Objectives: 

Objectives to assess how the reform will affect organic farms to determine whether the relative economic performance compared to conventional farming systems will change

Structure of the presentation: 

Structure of the presentation Data + methodology CAP reform scenario Policies Prices Results Farmers‘ reactions, impacts on production Impacts on income Conclusions / outlook

Approach: 

Approach Work was part of EU research project EU-CEEOFP (“Further Development of Organic Farming policy in Europe with Particular Emphasis on EU Enlargement”) Survey 550 farmers in 11 countries; this presentation focuses on Austria, Denmark, Germany and the UK randomly selected, spread over the countries face-to-face interviews in winter/spring 2004 Twofold approach survey of organic farmers to gain insight into specific constraints and adjustment plans ‚classical‘ farm modelling approach

The Model EU-FARMIS: 

The Model EU-FARMIS Comparative-static mathematical programming model for farm groups to model the agricultural sector Main database: Farm Accountancy Data Networks(FADN) For this study: EU-FADN, 2002

CAP Reform: Scenario Conditions (Policy): 

CAP Reform: Scenario Conditions (Policy) Target year 2013; Reference ‘Agenda 2000‘ 2003 CAP reform (price reforms in rye and dairy sector; payments for energy crops and pulses; modulation; cross-compliance, decoupling according to national implementation)

CAP Reform: Scenario Conditions (Prices): 

CAP Reform: Scenario Conditions (Prices) Survey + ex-post analysis of Agenda 2000 impacts: reduced impact on organic cereal prices similar impact on beef prices realised by organic farms What about reform impacts on organic prices ??? CAP reform impact on organic milk prices: majority (63 %) of organic farmers expect similar decrease however, 21 % expect lower reduction, 8 % expect no effect Source: Kleinhanss et al. 2004

Organic farmers‘ assessment of the need for changes on the farm following the decoupling of direct payments: 

Organic farmers‘ assessment of the need for changes on the farm following the decoupling of direct payments All Austria Denmark Germany UK 0 % 20 % 40 % 60 % 80 % 100 % I don't know No changes necessary Changes necessary or likely

Organic farmers‘ planned adjustments to the decoupling of direct payments: 

Organic farmers‘ planned adjustments to the decoupling of direct payments

Organic farmers' planned adjustments to the reforms in the dairy sector: 

Organic farmers' planned adjustments to the reforms in the dairy sector

Redistribution of direct payments under regional model of Single Farm Payment: 

Redistribution of direct payments under regional model of Single Farm Payment First pillar payments 10000 20000 30000 40000 50000 60000 70000 80000 OF CCF OF CCF OF CCF OF CCF Arable farms Dairy farms Arable farms Dairy farms > 100 cows North South Denmark Germany EUR / farm Agenda 2000 (2013) OF = Organic Farms CCF = Comparable Conventional Farms

Impact of the 2003 CAP reform on income (family farm income + wages per working unit) compared to an Agenda 2000 scenario: 

Impact of the 2003 CAP reform on income (family farm income + wages per working unit) compared to an Agenda 2000 scenario Austria Denmark Germany UK Organic farms Comparable conventional farms

Impact of the 2003 CAP reform on income (family farm income + wages per working unit) compared to an Agenda 2000 scenario: 

Impact of the 2003 CAP reform on income (family farm income + wages per working unit) compared to an Agenda 2000 scenario Austria Denmark Germany UK Organic farms Comparable conventional farms

Conclusions / outlook: 

Conclusions / outlook Impacts depend on national implementation differ by farm type Future research Incentive for conversion may increase  pressure on organic prices ? Development of 2nd pillar ? Distortions of intra-EU competitiveness ? In general will be more beneficial to organic farms in countries which have opted for full rather than partial decoupling in countries which have implemented the Single Farm Payment on the basis of regional rather than on the basis of farm individual historical references

Slide16: 

Impacts of the 2003 CAP reform on structure and competitiveness of organic farming systems Thank you !