Posts Tagged ‘CAP-reform implementation’

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.

Implementation of CAP-reform 2013: The single country overview

5. Mai 2014

As already described in my last post, I did a detailed review on the decision of the EU-member on how to use the three flexibility elements of the CAP-reform 2013. I focused on 1.) the re-coupling of direct payments, 2.) the reallocation of funds between the pillars and 3.) the redistribution options. The EU-member-states have to report their final decision until August 1, 2014. There has been a discussion whether the flexibility elements improve or if they deteriorate the CAP-reform 2013. Therefore, it might be useful, to get an overview on how countries use this flexibility.

Here is the table overview on the CAP-reform-implementation in the single member-states.

These information were gathered by internet-search, Agra Europe (diff. Issues), and by the 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 responses on my requests and support from the ministries of Poland, Czech Republic, Greece, Finland and Hungary, thanks a lot for supporting this search!

This table is presented according my best knowledge, so no guarantee on the details. Any comments, questions, corrections or further information are welcomed: slakner@gwdg.de

A very interesting and detailed timeline for the implementation in United Kingdom from DEFRA can be found here: CAP-reform timeline UK.