Posts Tagged ‘CAP-Reform 2013’

Ecological Focus Area 2016: Data from Lower Saxony suggest low impact

19. Oktober 2016

New data from Lower Saxony on the registration of ecological focus area (EFA) of the season 2016 are published now and the data show almost no changes: The EFA is still an expensive measure for taxpayers with low impact on the biodiversity. The first results of the implementation of the Ecological Focus Area (EFA) of 2015 were disappointing from an ecological point of view. But as always with new policy measures, there are a lot of child’s diseases to observe: There were a lot of administrative problems and obstacles and information deficits. In 2015, there were more precise information information by the ministries and the extension services could work and give recommendation to farmers. So the question is, whether farmers would implement more effective measures and whether the performance of EFA has been improved in the second year.

Line of trees as landscape feature

Line of trees as landscape feature

Why is Lower Saxony a good case for studying EFA-implementation?

First of course, because Mrs. Silke Dahl has again done a great job in analysing the data and providing a complete and very detailed overview on all counties in Lower Saxony to the public. Her analysis is published in the monthly bulletin of the Statistical Office Lower Saxony of October 2016. This is especially outstanding, since even the EU Commission has not yet published a complete overview on implementation data in all EU-member states of 2015. So dear colleagues from DG Agri, this data issue is really difficult, but have a look on Mrs. Dahls publication, it’s a good example! And we are still waiting for the data for all other federal state and we wait for good data on the EU-level.

Second: Taken agricultural land, Lower Saxony is the no.2 production state in agriculture in Germany (after Bavaria) with 2.6 Mio. ha of agricultural land. If we take the gross value added of the federal states, then Lower Saxony has the largest value of 3,352 bill. EUR in 2014 (see figure, data from the Statistical Office of the Bundesländer 2016) and contributes 21% of the total German gross value added in Agriculture. In the animal production, Lower Saxony has an even a higher share of 27.3% of the total gross value added and if we take the average profits (reported in the Agricultural Policy Report of the German Federal Government of 2015: p.103), Lower Saxony has the third highest profits on average.

Gross Value Added in Agriculture in the federal states of Germany 2014, Source: Stat. Office of the Federal States 2016, in bill. EUR, at producer prices

Fig.1: Gross Value Added in Agriculture in the federal states of Germany   2014 Source: Stat. Office of the Federal States 2016, in bill. EUR, at producer prices

Lower Saxony has large arable areas with a high production potential around Hildesheim and Braunschweig, but also very competitive meat production in Western Lower Saxony and some regions with highly specialized milk production in Norther coastal regions. And at the same time we can observe environmental problems in Lower Saxony (as e.g. some Nitrate pollution especially in Western Lower Saxony) and also some regions with reduced biotopes and landscapes elements. Also from a biodiversity perspective, Lower Saxony is one of the states, where actions to preserve biodiversity are highly necessary. And especially in that sense, the implementation data of 2016 are still disappointing.

Net Area of EFA in Lower Saxony

In the following, we will refer to the net EFA-area before applying weighting factors (WF). The data show that the EFA-area has been slightly reduced by 3.8% (= 12.100 ha). Since there has been a substantial ‚overbooking‘ of EFA in 2015, this adjustment is logic. Still, in Lower Saxony the share of EFA-area is at 15.9 %, which is significantly above the average share of Germany in 2015, which was 11.5. North Rhine-Westphalia and Lower Saxony were the two federal states with the highest shares of EFA (both above 15%, i.e. ‚overbooking‘), which also means, they had the highest share of the EFA-options with low weighting factors like nitrogen fixing crops (0.7) and catch-crops (0.3). So farmers need to register more area of these options to comply with the EFA-requirements.

Ecological Focus Area in Lower Saxony 2016 (Source: Data from the Statistical Office Lower Saxony, Share of area before applying weighting factors)

Fig. 2: Focus Area in Lower Saxony 2016
(Source: Data from the Statistical Office Lower Saxony,
Share of area before applying weighting factors)

With respect to EFA-options chosen by farmers, we can observe almost the same picture as last year (see Figure 2):

  • Catch-crops and green cover are the most important measures with together a share of 86%. The area has of catch crops has been reduced a bit (14.000 ha), half of that in just three counties, which indicates that some of the overbooking was a regional phenomenon. We can see this from the regional data (Fig. 4), where the highest share for catch crops with 92.5% was achieved in the administrative region of Weser-Ems, where the specialized meat-producer are located. Especially farms with meat-production seem the prefer this options, since land for folder-production is scares and land-rents in Western Lower Saxony are high (despite a lower soil quality).
  • The second important measure is fallow land with 8.7%. This options has been increasing a bit (+26.400 ha). This can be regarded as a small step in the right direction. Interestingly the increments could be observed in arable regions of Hildesheim, Hannover, Uelzen and Gifhorn, where the shares of fallow land has been already high in 2015. It seems that this options is not chosen by farms with animal husbandry, since here land is especially scarce and farmers tend to use this land rather for productive options. Note however, that this interpretation is specific to Lower Saxony and cannot be generalized to other regions.
  • Nitrogen fixing crops have a comparably low share of 2.9%, in other federal states this measure is taken more often.
  • Landscape features (1.7%) and buffer strips (0.6%) are almost negligible. Here no changes could be observed, despite the fact that buffer strips are supported by the state agri-environmental program. But as mentioned in my post from June, this additional support seems to almost not affect farmers choices.
  • FiOther elements (forestry area and short rotation coppice) contribute with 0.1% to the EFA-uptake, so the recommendation would be to abolish those options since they are almost not chosen but produce administrative burdens.

If we evaluate farmers choices, we need to see, whether the options can contribute to farm biodiversity. Our own assessment (at the moment under review) shows that agricultural ecologists see especially fallow land, buffer strips and landscape elements as effective measures with a positive impact on biodiversity, whereas catch crops, green cover and nitrogen fixing crops are almost ineffective with regards to biodiversity. Taken this as a basis, we can state that 11% of the EFA in lower Saxony might positively influence the preservation of biodiversity. There is a small development in a positive direction, since this share was at 9.8% in 2015. However, needless to say, that this is too little given the financial efforts taken by the greening-policy.

The other elements might have some general positive influence on the environment here and there. However, the EFA is supposed to specifically address biodiversity (as the EU-commission states in their motivation of the EU-regulation, figure 44) and here we must state, that still almost 90% of the EFA in Lower Saxony will have no biodiversity-effect.

Conclusion

After the second year, the results are still disappointing and we cannot take the administrative problems and missing information as excuse. In Lower Saxony, a production region with high competitive advantages, farmers adjust their EFA according economic grounds resulting in a low effectiveness and just 11% of the area will help biodiversity. EFA is just implemented on 15% of the arable land, but for the remaining 85% no changes are taking place. The protection of environmentally sensitive grassland has been there before and a few farms (with biogas-production) might have to adjust their crop-rotation due to the crop diversification-requirement.

Lower Saxony is a very productive region and the results cannot be extrapolated to the EU. The example of Lower Saxony is (as mentioned above) interesting, since the necessity for biodiversity actions is high. In other regions EFA might function slightly or even significantly better (as data from Schleswig-Holstein of 2015 suggest). It will be interesting to get more data from other states and see, whether adjustments are higher and it would be interesting to compare with other high productive regions within the EU. In this text, we did not analyse the protection of sensitive Grassland and the crop-diversification rules of Greening.

Interestingly, the EU-commission has recently published an Online Survey (See Figure 3) of 3.304 EU citizens (with high participation of German farmers, citizens and NGO-members), which shows that only 51% of farmers expect a substantial or moderate positive impact of EFA on biodiversity. So poor implementation might still be a problem of missing information and extension. And even the citizens in this survey have quite a realistic picture on the potential impacts of Greening.

Long term expectation on the effect of Greening (EU Commission 2016)

Fig.3: Long term expectation on the effect of Greening (EU Commission 2016)

The EU-commission seem to still evaluate the first growing season of Greening 2015. Some general data have been published in a very detailed document of the EU-Commission in June 2016 (EU Commission 2016 Review of greening after one year). However, this document does not contain specific figures on how many hectares of which EFA-option were registered in the member states. This goes back to problems of some member states to report the greening figures to Brussels: Especially France, Italy and Scotland had problems and did not report all necessary data. However, the EU Commission so far does not even given an incomplete overview on EFA with precise figures of the states, where data are available. So the public and interested stakeholder cannot participate in the Greening-debate before 2017.

The publication of the statistical office in Lower Saxony is a positive example how we can precisely publish EFA-data and how we can enforce a debate on Greening. Not publishing precise data on Greening (as the EU Commission did, sorry…) leaves the impression, that the Commission is not interested in a Greening-debate before the official Greening-evaluation is out in March 2017. (However, we still need to admit, that missing data is not only the responsibility of the commission, but also of the member states.)

So the next months will be interesting, since some states will publish their data, so the debate will go on with or without official EU-data. And finally, Birdlife, Nabu Germany, Martin Häusling and Robert Habeck (Green Party) are right in their conclusion, that Greening is an expensive failure and we need an intensive debate, whether or not to continue with direct payments of pillar 1 beyond 2020. There might be still some arguments, to use a general basic environmental scheme as entry level, however, even for this objective Greening in its actual form is not appropriate. NABU Germany and Birdlife will present their vision and reform-model for a new “Fit and fair CAP beyond 2020” on November 16, 2016 in Brussels. We will closely follow this and other reform-proposals for the CAP post 2020 in order to improve the environmental performance and the development of agriculture towards more sustainability.

Sources:

Silke Dahl (2016): Ökologische Vorrangflächen in der Landwirtschaft 2016, Statistische Monatshefte Niedersachsen 9/2016, S. 518-521

EU-Commission (2016): Public consultation ‚Experience with the first year of application of the greening obligations under the direct payment scheme (CAP)‘, Brussels, link: http://ec.europa.eu/agriculture/consultations/greening/greening-001-results-online-survey_en.pdf

Statistical Office of the Federal States (2016): Regionale Landwirtschaftliche Gesamtrechnung, url: http://www.statistik-portal.de/LGR/DE_PW_y.asp?y=2014#tbl00

Ecological Focus Area (EFA) in the admin. Regions of Lower Saxony in 2016 (Source: Source: Data from the Statistical Office Lower Saxony, Share of area before applying weighting factor)

Fig.4: Ecological Focus Area (EFA) in the admin. Regions of Lower Saxony in 2016 (Source: Source: Data from the Statistical Office Lower Saxony,
Share of area before applying weighting factor)

Greening 2015: First preliminary data show necessity for further reform

13. April 2016

As one main element of the EU’s CAP-Reform 2013, the Greening of EU Direct Payments has been implemented for in 2015 the first year. In the last weeks some first data on the implementation of Greening and the Ecological Focus Area (EFA) were unofficially presented by the EU Commission. I want to share these data and do a bit of commenting on them.

As already reported on this website, farmers have to fulfill three criteria (crop diversification, maintenance of permanent grassland and the ecological focus area (EFA)) to receive 30% of the direct payments. There are some exemptions for very small farms (< 10 ha), some simplified criteria for small farms (10-30 ha) and some exemptions for farms with a high share of permanent grassland or fodder production on arable land. The EU-Commission provides some general information  on greening and the member-states had some flexibilities in the implementation of Greening on a national level. So most of the information were provided by national authorities, since the Greening-regulations are dependent on the decisions taken in the member-states.

In December 2015, EU member states had to report the figures of the first year of implementation to the EU-Commission. On this website, I already reported on the implementation of Greening and EFA in Germany, since the German ministries (in the Federal States and in Berlin/Bonn) published the implementation data in great detail. So it was possible to draw some first conclusions, even though it is clear, that farmers choices will still change to some extent in the next years, when all the details are known and farmers have more time to take their decisions how to comply to Greening.

Ploughing 2016 in Northern Germany

Ploughing 2016 on the island of Föhr, in Schleswig-Holstein, Northern Germany

The EU-Commission also published a document on the national choices with respect to all the flexible element of the CAP-Reform. From this document, it is clear that on the  national states took the full flexibility of national decision. With respect to the ecological focus area, different options are offered on the national level. The following figure 1 shows the number of countries in which the different EFA-options are chosen:

Figure 1: Number of EU-member states offering the different EFA-options

Fig. 1: Number of EU-member states offering the different EFA-options (Source: European Commission 2015: Direct payments post 2014 Decisions taken by Member States by 1 August 2014 – State of play on 07.05.2015-, Brussels, 
url: http://ec.europa.eu/agriculture/direct-support/direct-payments/docs/direct-payments-schemes_en.pdf)

So the most chosen option are 1.) nitrogen fixing crops, 2.) land lying fallow and 3.) Landscape features. Figure 2 illustrates the number of options chosen in the EU member-states:

Figure 2: Number of chosen EFA-options by the EU-member states

Fig. 2: Number of chosen EFA-options by the EU-member states (Source: European Commission 2015: Direct payments post 2014 Decisions taken by Member States by 1 August 2014 – State of play on 07.05.2015-, Brussels, 
url: http://ec.europa.eu/agriculture/direct-support/direct-payments/docs/direct-payments-schemes_en.pdf )

14 member states have chosen 10 or more EFA-options. Obviously, large countries like Germany, France, Italy and Hungary took the administrative challenge to provide a large number of options for their farmers (17-18 EFA options), which also includes a substantial administrative costs. On the other hand, nine of the member states only offered a moderate choice of 5-9 EFA options and only five member states offered rather few options to their farmers (2-4 EFA options).

Greening causes substantial administration costs and efforts

We know the offered EFA-options in the member states and some implementation data from single member-states. But it turned out to be very difficult to get concrete EFA-data from other member-states. Some ministries were very constructive and helpful and gave data to our research-group. However, even the EU could not get all the data by 15.December 2015. It was obviously difficult to implement Greening into the EU’s Integrated Administration and Control System (IACS) of direct payments. Many representatives, to which we were talking to in the last months, reported difficulties in implementing Greening. The result is, that many countries delivered the data from January to March 2016, and France is still to deliver. Besides the control and administration systems of Pillar II. and of Cross Compliance (CC), we now find a third bundle of regulations, where the administration has to perform controls and register data etc.. So the term „simplification“ is not meaningless in that sense, that the implementation of Greening causes a lot of administrative burden and the overlap of three different control scheme needs simplification. And simplifying without reducing the ecological impact, will be a great challenge of the next mini-reform 2017.

EU-Implementation of Greening & Ecological Focus Area 2015

The EU-Commission announced to publish the first detailed evaluation of data in May/June 2016, however at different conferences in the last weeks, some preliminary data were presented. On April 05, 2016, the European Landowners Organization (ELO) held a meeting titled “A Sustainable European Agriculture: Is Greening the Way Forward?„. At this meeting, Joost Korte, (Deputy Director-General at the DG Agri in the EU Commission) reported some first preliminary figures on Greening on the EU-level. Those figures (probably) do not include the data from France. I also received data from other sources in Brussels, however these figures are preliminary (!) and still subject to data control. However, I still want to present the data here to give some first ideas, how Greening was implemented in Europe. The debate on the further development of Greening will be done this year, because on March 31, 2017 the EU Commission will present a report on the implementation. The public needs to follow up in the debate and influence the discussion. Therefore, even preliminary data might help.

The first figures are about the question, on how much land Greening was implemented: On 73% of the land, at least one Greening criterion was implemented and around 40% of the farms had to comply to at least one criterion. Crop diversification was relevant on 79% of the EU arable land. 67% of the arable land was with obligations of 3 crops, and 12% of 2 crops. This means that 21% of the arable land was excluded from Crop Diversification, which is even more than the first estimates of Pe’er et al. (2014, in Science), who estimated 13% of the arable land to be excluded.

My own calculations and also the calculations of Thünen Institute estimate that around 10% of the farms have problems with the Crop Diversification criterion, but Farmers need to do only small adjustments. In Germany, the main effect of Crop Diversification is to correct a bit of the negative side-effects of the national Biogas-support, which lead to a high share of maize in the crop rotations. Maize is the main crop, which causes problems in Crop Diversification. I would suggest to correct the Renewable Energy Act (EEG) in Germany and leave away the Crop Diversification criterion. I don’t see much of an effect.

Based on Mr. Korte’s report, the Ecological Focus Area (EFA) was relevant on 70% of the arable land. I.e. 30% of the arable land is exempted. The farmers mainly implemented land lying fallow (35% of the arable land after applying the weighting factors), nitrogen fixing crops (38%) and catch crops (15%). Landscape elements (4.5%) and buffer strips (5.9%) are of minor importance.

Other sources from Brussels also report, that there is substantial ‚overbooking‘ on EFA: EFA has a share of 16% of the arable land subject to EFA before applying the weighting factors (WF) and 10% after WF. However, the obligation is just 5% (after weighting factors), so farmers registered far more than necessary in order to avoid problems with controls. This also suggests, that the main debate should not be about the questions whether 5% or 7% of the arable land are necessary. It should be more about which options are useful and effective to target biodiversity problems.

The preliminary land-shares of the different EFA-options are shown in figure 3:

Fig. 3: EFA Choices in the EU 2015 as shares of EFA-area in per cent

Fig. 3: EFA Choices in the EU 2015 as shares of EFA-area in per cent (Source: Preliminary data presented by the EU Commission 2016)

The ‚productive options‘ catch crops and nitrogen fixing crops together take the largest part (53%). Landscape elements and buffer strips, as very effective measures to protect species and link structures within the landscape, have only 11% of arable land (after applying WF). Note that the real shares are given by the figures before applying weighting factors (WF), so the proportion of landscape elements and buffer strips are around 5% alltogether. Countries with the largest shares of landscape elements are Ireland (by far!), United Kingdom, Malta, (surprisingly) Germany and Sweden. Buffer strips are of the registered in Denmark, United Kingdom and Ireland. Also interesting is the fact, that many of the two forest-options don’t play a role: There is a bit of short rotation coppice in Finland and Denmark and a bit afforested area in Portugal, Poland, Hungary and Spain. But on the EU-levels, these options play with 1% a minor role.

If we take a look into the main reform document, EU-Regulation No. 1307/2013 of the European Parliament and of the Council of 17 December 2013, into argument (44), we find the main motivation for the Ecological Focus Area (EFA): „Ecological focus areas should be established, in particular, in order to safeguard and improve biodiversity on farms„. So EFA is about Biodiversity! Ecologists tell us, that mainly buffer strips, landscape element and land lying fallow only show a significant impact on biodiversity. The other elements might be in one or the other way beneficial for the environment in general, however their effect on biodiversity is probably rather limited.

Conclusions: A substantial reform of Greening or beyond is necessary

The preliminary data show that only about 45% of the EFA-area (after WF) useful options are chosen. If we take real area, the share is just about 26%, which is disappointing. There is a lot of water in this system, especially if we take into account the administrative costs to implement Greening. Note that the figures vary substantially between the member states. So I am already looking forward to analyze the full published data-set. Note also that some national experts evaluate the EFA-effects a bit differently across the countries.

The figures clearly show: Greening and the EFA is not the best instrument to perform targeted support of biodiversity and especially endangered species! EFA might contribute for a more broad extensification of arable land – if we take this as an objective for EFA. So from an environmental point it might be worth to think about a pragmatic improvement of EFA. But we need other more effective instruments for a targeted support of biodiversity and endangered species. Greening and EFA are not the solution to this problem.

It is still to early to give a final comment on the figures, since we don’t have more precise and detailed data. And 2015 is just the first year, so given the low commodity prices for agricultural goods, I would expect e.g. the fallow land to be chosen more often in 2016. Also the buffer strips might gain a bit, since the regulations are more clear this year and farmers know how to implement buffer strips.

On the other hand, my two main argument would still be the low efficiency of EFA and Greening and missing effectiveness for endangered species. And remember: The endangered species are the main objective of EFA. This still highlights the potential but also the necessity to substantially adjust the EFA-measures and to financially increase the share of Pillar II and also to reform Pillar II-programs. I will comeback to this in a few months, when more data are available.

Did I miss something or is something unclear? Just write or comment, I am happy about feedback!

Thanks to Dr. Jürgen Wilhelm from the Ministry for Agriculture in Lower Saxony for presenting some of the data in Loccum and for fruitful discussion. Also note that not all data stem from Dr. Wilhelm and I won’t take any guarantee on the data, which are still preliminary.

Ecological Focus Area in Germany: The Full Dataset

8. Oktober 2015

Today, the German Ministry for Food and Agriculture published the press-release No. 191 with the full-dataset on the registration of ‚Ecological Focus Area‚ by farmers in 2015 in Germany. The data mainly confirm the rather low impact of greening and ecological focus area on biodiversity.

Fallow land in the region of Göttingen, South Lower Saxony

Fallow land in the region of Göttingen, South Lower Saxony

Overall, ecological focus area have a share of 11.5% of the total arable land in Germany. As already mentioned in the last post, farmers use the full set of options, but with a strong emphasis on the production options. Catch crops and under sawn crops are the most important options (68%), followed by fallow land (16%) and nitrogen fixing plants (12%). The two interesting options for biodiversity and ecosystem-connectivity, buffer strips and landscape elements have a share of only 3.6% of the ecological focus area. But to see the full effect for agro-ecosystems, we need to see the share of buffer strips and landscape elements to the sum of arable land, which is 0.42%. This is from a biodiversity perspective simply disappointing. Fallow land might also have a limited positive effect on biodiversity, but strongly depending on the seed-mixture and the location of the fallow land within the region.

Type of Ecological Focus Area Area in hectares
Fallow land 221,8
Bufferstrips 16,5
Landscape Elements/ Terraces 33,0
Catch crops / Undersawn crops 930,2
Nitrogen fixing plants 161,8
Short forestry plantation 2,2
Afforestation 1,9
 Sum of Ecological Focus Area 1367,4

Source: Ministry for Food and Agriculture, Press-release, 08.10.2015

According to the German Minister for Food and Agriculture, Christian Schmidt (CSU), farmers „create additional environmental services“ and it was a good choice, to offer multiple options for farmers. I think, this is a quite optimistic view, but of course subject to a debate on the topic. From my perspective, the analyses and statements done it the my previous blog-posts are mainly confirmed. The implementation of greening and the ecological focus area are disappointing from a biodiversities point of view. If we argue with the efficiency of tax-payers money, the payments in agri-environmental are more efficient to support biodiversity services from farmers. The actual data on greening bring a lot of arguments to lower the level of direct payments in pillar I. and increase the financial volume of the agri-environmental programs in pillar II. – at least from a scientific point of view and of course from a German perspective.

So the debate is open, I am looking forward to your comments!

Greening and Ecological Focus Area: First Data on Decisions in Germany

7. Oktober 2015

Some weeks ago, we asked on this blog how farmers would implement Greening 2015 and which options they would choose in order to comply with the criterion of the ‘ecological focus area (EFA)’. The main message was that farmers would probably prefer to use the options of catch crops, nitrogen-fixing crops and fallow land, since they provide cost-advantages against the classical biodiversity options such as buffer-strips and landscape elements. This expectation was also based on the fact, that the latter go alongside with legal insecurity. In addition, structural policies and the practise of direct-payments before 2013 lead to a situation, where farmers would rather exclude landscape elements from their registered farm land. Overall, the expectation was that landscape-elements and buffer-strips (as the most effective options to support biodiversity) would hardly be chosen by farmers.

EFA Fallow land in the region of Göttingen

EFA Fallow land in the region of Göttingen

In May, the EU-Commission published a detailed report on the implementation of the CAP-reform. Most of EU-member-states (MS) have offered a number of EFA-options (see a report from the EU-commission on the CAP-reform implementation), 14 MS are offering 10 EFA-options and more, 9 MS are offering between 5 and 9 EFA-options. Only in 5 MS the choice is restricted to max. 4 EFA-options. So the choice within most member-states is quite broad and it is going to be an interesting topic to observe how farmers finally decide.

Development of legumes and fallow land in 2015

During this summer there were some press-releases and reports were published, that document the impact of ‚Greening‘ on farms in Germany. On August 03, 2015 the Federal Statistical Office of Germany (Destatis) published some preliminary production data. According those data ‚Legumes‘ (74%) and ‚Fallow Land‘ (+62%) have drastically increased in Germany. The following fig.1 shows the increment of legumes from 2014 to 2015.

Fig 1. Growth of legume production in Germany 2014 to 2015 Source: own calculations, data from Destatis 2015

Fig. 1. Growth of legume production in Germany 2014 to 2015 Source: own calculations, data from Destatis 2015

The main production area are in Eastern Germany and Hesse with shares between 2% and 3% of the total arable. In contrast, in most western states we find just shares of 0.5%. In Eastern Germany this can be explained by economies of scale, i.e. larger average farm-size and the available harvesting machines for harvesting legumes. Appropriate machinery and harvesting techniques are important, since harvesting legumes is often regarded as one of the main problems in legume-production.

However, the impact of Greening is only a turn-back to the shares of the mid-2000s. At the moment, legume production has reached almost the level of 2005 (95%). Since 2004, the production mainly of beans has drastically declined (as shown in fig. 2):

Fig 2. Harvested legumes in Germany from 2004 to 2014 (1,000 t) (Source: Agrarmarkt-Information 2010, 2015)

Fig. 2. Harvested legumes in Germany from 2004 to 2014 (1,000 t)
(Source: Agrarmarkt-Information 2010, 2015)

A similar effect (+62%) can be observed on fallow land, which has been decreasing after the ‚Health-Check-Reform‘ 2009. And here again, the shares have been substantially higher in the mid-2000s: The share of fallow land is just a 37% of the share in 2005.

Overall, my expectation would be that the observed growth of legumes won’t be sustainable. If Greening gives incentives to produce legumes and ‘fallow land’, farmers will follow, especially because other options are much more costly. However, as soon as those incentives fall, the shares of legumes and fallow land might decrease again.

Any market impacts of Greening?

In addition, it is unclear how the market-equilibrium of legumes is affected by Greening and how supply and prices of beans and peas develop. If all legumes are finally harvested and processed, we might observe and oversupply and prices might drop substantially. The price of legumes is displayed in figure 3:

Fig 3. Prices for Legumes and Soybean meal in Germany 2007-2015 Source: Agrarmarkt-information 2010/2015

Fig. 3. Prices for Legumes and Soybean meal in Germany 2007-2015
Source: Agrarmarkt-information 2010/2015

So far this does not seem to be the case: During the summer we could observe prices for peas and beans of 150-185 €/t, which is still above the low level of the years 2009/2010. During this low-price period prices use to reach a low level of 100-140 €/t. The price-drop of legumes after harvest 2014 until Sept. 2015 is rather due to the general decreasing price-trend on the world-market followed also by legumes.  It might be that a share of farmers finally did not harvest the legumes and rather used it as a green nitrogen-fertilizer and that some of the produced legumes are not appearing as supply on the market. (But this is just speculation.)

Reports of Ecological Focus Area in Lower Saxony and Saxony-Anhalt

The Statistical Office of Lower Saxony has also published detailed data on the registration of Ecological Focus Area (compare Dahl 2015, in the monthly statistical report 08/2015). The data document that fallow-land and catch-crops are the most important option chosen by farmers in Lower-Saxony (See fig. 4):

Fig 4. Ecological Focus Area in Lower Saxony 2015 (Source: data from Dahl 2015)

Fig. 4. Ecological Focus Area in Lower Saxony 2015
(Source: own calculations, data from Dahl 2015)

Fallow land and catch crops take 95% of the total EFA in Lower Saxony. The high share of catch-crops is not surprising. For catch crops it is necessary to use a summer-crop, mainly with sugar beet (which has a high share in Lower Saxony) catch crops are useful, because it also avoids soil-born diseases and nematodes. According our calculations (published in Natur & Landschaft in June 2015) catch crops have the lowest costs of all EFA-options.

Dahl has prepared the same data for six production regions in Lower-Saxony (11 of all counties don’t belong to those regions):

Tab 1: Production Regions in Lower Saxony (Dahl 2015)

Region Main type of farming
Western Lower-Saxony Pig- & poultry production
Costal Region, East Frisia Milk farming
Lüneburg Heath Potato-production
Lower Saxon Börde Arable farming
Southern Lower Saxony Arable farming
Old Country
(between Hamburg & Bremen)
Fruit-production,
milk & mixed farming

 

The following fig. 5 show the regional reports of Ecological Focus Area (EFA):

Fig. 5: Options for the Ecological Focus Area (EFA) in the Regions of Lower Saxony (Source: based on Dahl 2015)

Fig. 5: Options for the Ecological Focus Area (EFA) in the Regions of Lower Saxony (Source: own calculations, based on Dahl 2015)

We can see, that decisions in the regions vary substantially. We can observe high shares of fallow land in the arable regions ‚Börde‘ and ‚Southern Lower Saxony‘. However, this might be due to small sizes of land plots. And within the respective counties, there are plots with lower productivity, where fallow land is then applied. Under sawn crops are mainly chosen in regions with a higher share of grassland (‚Old Country‘, ‚East Frisia‘), which can obviously be combined with the production of fodder-grain. A similar statistics on EFA in Saxony-Anhalt gives a different picture (Fig. 6):

Fig. 6: Ecological Focus Area in Saxony-Anhalt 2015 (Source: own calculation, data from the Ministry of Agriculture and Environment in Saxony-Anhalt 2015)

Fig. 6: Ecological Focus Area in Saxony-Anhalt 2015 (Source: own calculations, data from the Ministry of Agriculture and Environment in Saxony-Anhalt 2015)

This is fully consistent with the statistics above: Farms in East-Germany are using the option of legumes, which take a share of 24% – in contrast in Lower Saxony, where legumes have only a share of 2.4%. This might be explained by economies of scale: The average farm size in East-Germany is larger and farms also have better harvesting techniques.

Conclusions

Overall, the share of landscape elements and buffer strips is very low, around 2% in both states. Landscape elements and buffer strips could be the most effective and useful options to support the maintenance of biodiversity in agri-ecosystems. However, this options as almost not chosen.

  • This might be explained by the recommendation of the official advisory services to register mainly catch-crops, fallow land and legumes for legal security reason.
  • Legal issue and insecurities, and in East Germany fragmented land-ownership might explain the low use of landscape elements. If e.g. hedges are used for EFA, the diverse land-owners of this hedge need to accept this options, which might cause problems and a lot of communication and transaction cost.
  • Structural policy and the control practise of cross-compliance have rather given incentives for farmers, to exclude landscape elements form their core-farmland and sell it to the local communities. Therefore, a lot of farmers do not own their former landscape elements anymore.
  • Finally, planting a new landscape element is (probably) the most costly options to comply with the ecological focus area. The greening component (87 EUR/ha) is not enough to cover investment- and maintenance-costs of landscape elements. Therefore, greening is not the appropriate measure to support landscape elements.
  • Interestingly, the option of buffer-strips also has a very low share. Buffer-strips are sometimes also additionally supported by agri-environmental measures in the II. pillar. This sounds attractive, but in practice there are a lot of restrictions and requirements: e.g. in Saxony-Anhalt, this support of the II. pillar is restricted to only 2.5 hectares per farm. With an regional average farm-size of ca. 400 ha, about 12,5 ha would be necessary to comply with EFA. Therefore, this highly supported combination does not seem to be attractive for farmers.

Finally, these results are only the first round of 2015 and for two regions, where arable farming plays an important role. I have picked those federal states, since biodiversity indicator show that landscape deficits are high especially in the main arable regions (‚Börde‘) of those two federal states. The results for the states are rather poor. It will be interesting to investigate other regions as well and to observe the development during the next years. However, a substantial increment of landscape elements and buffer-strips from my point of view doesn’t seem to be very realistic.

The figures document that farmers react according the general expectations and incentives and they use the given production option of Greening. A moderate small impact on biodiversity might still come from fallow land, however, overall Greening shows to be mostly ineffective to protect biodiversity. The EU-commission and the supporters of the greening-concept need to answer questions, such as how we can justify the greening-component of 1.5 Billion EUR per year in Germany, which has little effect on biodiversity and windfall gains for farmers between 70% and 90% of the greening component. Even the most severe measure, the ‚ecological focus area‘ seems to show almost no effect on biodiversity, but restrictions for farmers entrepreneurial decision and a substantial amount of administration for both farmer and state.

Implementation of CAP-reform 2013: Update on the single country overview

23. Februar 2015

The CAP-reform contains some flexible elements, where the EU member states can decide, which options to implement into the national legal framework. These flexible elements were to be reported by the EU-member states to the EU-Commission until August 2014. Last year, I published a preliminary overview on my blog, that was requested a lot (see CAP Implementation an Overview of April 2014). In December 2014 I did a second round of eMail-request to different ministries for agriculture, where I had no information and got a few answers again (Thanks to the ministries of Denmark, Lithuania and Cyprus!). The EU-Commission was also busy and recently published an The CAP towards 2020 Implementation of the new system of direct payments MS notifications, which is especially detailed on voluntary coupled payments and contains also the option taken on greening-regulations.

Today, I am completing the list of country decisions based EU-Commission publication, and also on the information provided by the ministries. You can find in the attached list the single country decisions with respect to a.) voluntary coupled support, b.) Reallocation between Pillars and c.) Degressivity / redistribution. In some cases I added links to interesting government documents, however, that is not a complete link list. Many ministries websites are very detailed and provide complete information even in English. Other websites are rather poor and contain rather confusing informations. Here is the Tabelle CAP-Implementation – Version 2b. (PDF-file). If you have questions or comments on this, let me know, I hope the list of country decisions is useful. I am also working on a qualitative assessment of the flexibility elements, which will (hopefully) be published soon.

Another Assessment has been done by Kaley Hart from the Institute for European Environmental Policy (IEEP): Member State choices on Pillar 1 implementation revealed.

The Implementation of the CAP-Reform 2013 – an actual overview

25. April 2014

A. Flexibility options of the EU-member-states

In December 2013, EU-Parliament and Council could reach an agreement on the main issues of the CAP-Reform 2013. The final EU-Regulation 1307/2013 is already published in the Official Journal of the European Union. Some of the main issues of the reform allow a lot of flexibility for the single EU-member-states. The following article will go into details which of the options are going to be used by the EU-member-states.

Flexibility of EU policies in general might even be useful if motivated by the concept of subsidiarity, which means that specific political problem is decided by the decision level (regional, national or EU), which is capable and in the position to do the most appropriate and precise decision and to design an efficient policy-solution. That is so far the theory.

The decision upon the CAP-reform 2013 was taken in a quite complicated institutional environment, where EU-Commission, EU-Parliament and EU-Council had to agree to the reform. Besides those three institutions, specific national interests of 28 EU-members and also party-loyalties had an influence on the decision-process. So the flexibility elements of the CAP-reform have not always been introduced because of subsidiarity, but rather, because otherwise, some of the issues within the reform would not have been solved at all. This fact has already been criticized by scientists (Lakner et al. 2013), however, the interesting question is now, how do the EU-member-states use their flexibility options and do the flexibility elements at the end improve the reform.

We will focus on the following flexibility elements of the CAP-reform 2013, note that there are still some other flexibility elements (see Menadue and Hart 2014):

1.)   Redistribution of direct-payments:

  1. Degressivity tax of direct payments: According art. 11 in the EU-regulation 1307/2014, member-states have to reduce direct-payments exceeding 150.000 EUR/beneficiary by a so-called degressivity-tax of min. 5%. That also means, that member-states can increase the degressivity-tax up to a 100% tax, which is finally the concept of capping of direct-payment. Member-states can optional subtract salaries paid on farms from the direct-payment and thereby reduce the tax-load for large and labour-intensive farms (art. 11, 2).
  2. A more relevant option might be the use of a redistributive payment, which is a top-up payment for the first hectares of a farm, instead of the degressivity tax (art. 11, 3). So 5% of the national ceiling can be used to pay a top-up for the first hectares up to the limit of 30 hectares or up to the average size of agricultural holdings (art. 41, 2). E.g. in Germany, a top-up-payment for the first 46 hectares is paid, which is the average farm-size in Germany.

The topic of the redistribution of direct-payment has raised many debates in the last reforms 2005, 2009 and 2013. Especially the option of a redistributive payment has been criticized in Germany by Bahlman and Sahrbacher (2014) as ‘museum-premia’, since it potentially supports small structures in agriculture, but does not substantially contribute to support small farmers e.g. on the land markets. Besides this, the redistribution of direct-payment is about fairness of distribution, which is a political term, but hard to scientifically evaluate. Therefore, ag-economists for many goods reasons are generally very reluctant in giving positive statements on this option. The overall consensus seems to be, that the state should not intervene into agricultural structures. However, it will be interesting to see, what options the member-states use.

2.)   Flexibility between pillars: Member-states can reallocate funds between the two pillars (art. 14). For this option, member-states have to declare their willingness to do so to the EU-commission by the end of 2013 for using this option in the year 2014, and by August 1, 2014 for the years 2015-2020. The rural development programs (Pilllar 2) can be regarded as potentially more targeted. In practise, a lot of the P2 programs are still suffering from unfocused and poor policy design and from windfall gains (as e.g. in the agri-investment-schemes) (see Zahrnt 2009). However, the principle of policy design in P2 is a definition of objectives, design of appropriate measures and a minimum-standard of evaluation – even though there is a lot of scope for improvement here. Therefore, a strong shift to P2 could support a more targeted and efficient use of tax-payers money for policies, which are designed and co-financed on the national or regional level. Therefore, some experts say, that this might improve the overall balance of this reform. On the other hand, the CAP-reform 2013 also has the option for member-states to reallocate funds from P2 into P1 (direct payments), which might be used to increase the level of direct-payments in some of the member-states (with a low level of direct payments).

3.)   Re-coupling of direct-payments: Member-states can use coupled payments for particular sectors or farm-types facing specific challenges (Fig. 49) and which deserve (from the perspective of a member-state) support for environmental or social reason. First of all, the formulation in the EU-regulation is very broad and unspecific and it leaves a lot of space for interpretation. But basically, the member-states have to bring some arguments to the EU-commission, why a specific sector or farm-type needs specific support by coupled direct-payments. Member-states can use between 8% and 13% of their national ceiling for coupled support and another 2% of the ceiling to support protein-crops. Since coupled direct payment are generally regarded as more distortive to production and trade, an excessive use of this element (if not for environmental reason, so e.g. an extensive grazing premium) might bee seen critical. It is therefore also very interesting to see, how many member-states are still using this tool.

B. Status of Implementation in the Member States

The EU-member-states have to report the options they want to take until August 1, 2014. Nonetheless, some of the member-states have already taken a decision. Therefore, I did a detailed web-search on available government-documents, I reviewed the available issues of Agra Europe. I also did a written request some of the CAP-experts I know and to the ministries, where I could not find any information. The objective of this exercise is to get a picture as complete as possible on what is the actual status implementation in the member-states. I also asked, if there is already a tendency within in the ministry, what option the member-state wants to take. There is also a similar overview recently published by Henrietta Menadue and Kaley Hart from the Institute for European Environmental Policy (IEEP), which has though a slightly different focus.

Note that in Belgium, the region of Flanders and Wallonia and within the United Kingdom, England, Scotland, Wales and Northern Ireland are using different options. This is the reason why we have to evaluate not 28 EU-member-states but rather, 26 EU-member-states and another 6 regions within Belgium and UK. Actually, we could get information from almost 22 of 32 EU-member-states / regions and these are the main tendencies. If we indicate an intention in the following graphs, that means that the ministry has not yet decided and the intention is just a tendency, which is still subject of the political debate and the decision process in the member-state.

1.)   Redistribution of direct-payments:

For the redistribution options, we could get information from 16 member states / regions. The following fig.1 shows the decided or intended options by the member-states:

Fig.1: CAP-reform 2013 – redistribution (n=18, updated)

It is already quite clear, that most of the countries are opting for the simple degressivity tax, just four countries (Germany, France, Wallonia and Bulgaria) will work with a redistributive payment and Romania is tending to opt for a redistributive payment. The majority tend to use the degressivity tax. Ireland and Northern Ireland will apply a 100% degressivity tax, which is finally capping direct payment at 150.000 EUR. Still for 16 member-states there is no information.

2.) Re-coupling of direct-payments:

For recoupling of direct payment we could get information from 21 member-states /regions. The main policy options are described in the following fig.2:

Coupling of Direct-Payments

Fig 2: Coupling of Direct-Payments (n=21)

Most countries are tending to use the instrument of coupled payment and in most of the 13 countries, the full envelope of 13% will be used, some of the countries will use the 2% for protein crops, but not all of them. The countries which are opting against coupled payments are Germany, Irland, Austria (sic!), Wales and England. Italy and Estonia are also sceptical to coupled payments, but in both countries the final decision is not clear yet.

3.) Flexibility between pillars:

We could get information on the decisions and tendencies in 22 member states /regions, which is documented in fig. 3:

Fig. 3: CAP-reform 2013 – Allocation Pillars (n=22, updated)

The figure indicates, that both directions of transfer is used. Still the transfer to pillar 1 is only used in Poland, Croatia and Slovakia. This was especially surprising in Poland, since the former minister for agriculture had a strong emphasis on P2-policies, which is now under different under the minister. Germany, France, UK (England, Wales, Scotland), Flanders and Latvia. In Northeren Ireland, the agricultural minister was in favor of a reallocation to P2, but the cabinet did not support this option. Hungary might also use the option to increase P2-budget. The following fig.4 is showing the relative shift in the different EU-member-states in percent:

Fig. 4: Reallocation 2014-2020

Fig. 4: Reallocation 2014-2020

Since the ‚big‘ EU-members Germany, UK and France are all opting for a reallocation to P2, the net-effect on the total budget of the EU-28 is 0,6% between 2014 and 2020. This might still change a bit, since especially the situation in Italy and Spain is not yet clear, but the most of the large countries have already done a final decision. We can also see, that countries, that are using reallocation in order to increase the level of direct payment, such as Poland, Croatia and Slovakia, have an originally a rather low level of direct payment, on the other hand, countries with a relatively low level of P2-budget, use the option to shift funds to P2. Overall, the 2.46% of the total EU-budget is allocated with the net-tendency (0.6%) towards P2. The following graph shows the net-budget transfer. Nonetheless, this might still change as soon as some of the remaining countries (especially Italy and Spain!) make their final decision.

Fig. 5: Reallocation net effect

Fig. 5: Reallocation net effect

Status: 25.04.2014.

Updates: on 29.04.2014, I included some new information from Finland, Sweden and also Romania in the figure 1 and 3.

Thanks: Most of these information were gathered by support of different experts and colleagues of mine. Therefore great thanks to: Alex Lotman (Estonia), Oana Tanasache (Romania), Sebastian Hess (Sweden), Ewa Rabinowicz (Sweden) Anne van Doorn (Netherlands), Marian Stuiver (Netherlands), Sergio Araujo Enciso (Spain), Tomás García Azcárate (Spain) and Thelma Brenes Muñoz (expert for Portugal!). Besides this, I received immediate response and support from the ministries of Poland, Czech Republic, Greece, Finland and Hungary, thanks a lot for supporting this search!

Disclaimer: No guarantee on the provided information, some of these information might not be complete, and a lot of documents are not 100% clear. Especially the information on the intentions or tendencies of the administration might be mistaken (especially when provided in Italian!). So if you have questions, more precise information or even other information, let me know, I am very interested in feedback! This article is subject to constant updates. I hope by next week, I can publish a comprehensive table with the respective information on every country.

Other Sources:

Balmann, Alfons and Christoph Sahrbacher (2014): Mehr als „Museumsprämien“? Zur Förderung der ersten Hektare und Junglandwirte im Rahmen der EU-Agrarpolitik.
IAMO Policy Brief No. 14, Halle (Saale).

Lakner, S., C. Holst, B. Brümmer, S. von Cramon-Taubadel, L. Theuvsen, O. Mußhoff and T. Tscharntke (2013): Zahlungen für Landwirte an gesellschaftliche Leistungen koppeln! Discussion-paper of the Department for Agricultural Economics and Rural Development, University of Göttingen.

Menadue, H. and K. Hart (2014): Member State implementation of the CAP for 2015-2020 – a first round-up of what is being discussed, online article by the Institute for European Environmental Policy (IEEP).

Zahrnt, V. (2009): Public Money for Public Goods: Winners and Losers from CAP Reform, ECIPE WorkIng Paper Nr. 08/2009