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European support to farm incomes has decreased substantially over the past 20 years, according to this report. Farmers earned 22% of total annual receipts from government support over the 2008-10 period, down from 39% annually over the 1986-88 period.
The decline is due to many factors, including high commodity prices, which automatically push down income support, as well as 25 years of Common Agricultural Policy (CAP) reform outlined in the report.
» Access the full report
» Briefing note: The European Union's Common Agricultural Policy post-2013 (pdf, 4 pages, 145 KB)
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Despite the decline, CAP expenditures nonetheless comprised close to 45% of the total EU expenditures in 2010, or about EUR 53 billion. Overall farm support reached EUR 77 billion in 2010, as measured by the OECD’s Producer Support Estimate, which includes direct payments to farmers as well as the impacts of government policies on prices.
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Recommendations of this report
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The recommendations in this report for future EU agricultural policy reform include:
- Remove remaining impediments to the functioning of input and output markets; in particular more open access to the EU market, and transparent EU-wide markets for the sale and lease of land, production quotas and payment entitlements.
- Increase investment in agricultural innovation.
- Introduce an effective and comprehensive framework for risk management at EU level, though policymakers should steer clear of impeding areas where private sector solutions exist, such as production contracts, insurance and futures contracts.
- Make targeted efforts to improve the environmental performance of agriculture, including direct payments to farmers, when necessary, for provision of environmental goods and services.
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