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Evaluation of Agricultural Policy Reforms in the European Union

The Common Agricultural Policy 2014-20

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The Common Agricultural Policy (CAP) is the primary agricultural policy instrument of the European Union. This report focuses on the new features and institutional context of the current CAP 2014-20, adopted by the European Parliament and the European Council in December 2013. Special attention is given to risk management instruments and environmental measures. The conclusions drawn in this report seek to inform future reforms of the CAP.

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Foreword and Acknowledgements

Successive reforms have shaped the European Union’s agricultural policy. This report offers an evaluation of the main new features of the Common Agricultural Policy (CAP) over the 2014-20 period. It notes that in many ways the CAP 2014-20 is a continuation of the previous CAP while also offering some novel features. Starting with the description of the new institutional context whereby it was co-signed by Council and Parliament, the report then reviews the new policy features. New compulsory measures are introduced within an overall stable budget. These include the greening payment that is conditional on farming practices deemed to deliver specific environmental outcomes, and also the payment to support newly installed young farmers. The CAP 2014-20 also allows for greater flexibility. Member states may now partly tailor the implementation of some compulsory measures to their own conditions, they may also adopt choice measures from a menu of direct payments. Member states have embraced to varying degrees these new opportunities for flexibility. Their choices are discussed in this report. The OECD Producer Support Estimate (PSE) framework that quantifies policy transfers and the CAPRI model of European agriculture are used to offer an ex ante assessment of public expenditure associated with the new measures.Two policy dimensions are discussed in greater detail, first the provision of risk management instruments and their take up by member states and, second, the menu of environmental measures.

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