EUROPEAN UNION: ESTIMATES OF SUPPORT TO AGRICULTURE

Contact person: Catherine Moreddu

Email: catherine.moreddu@oecd.org

Tel :

(33-1) 45 24 95 57

Fax :

(33-1) 45 24 18 90

DEFINITION AND SOURCES

            Country Total Support Estimate (TSE) and derived indicators in Table 1 cover all agricultural production, i.e. all agricultural commodities produced in the country. Definitions of basic data sets refer to the specific name of the programmes with specific sources indicated in square brackets. For the Producer Support Estimates (PSE) and Consumer Support Estimates (CSE), the description of policy measures indicates the commodities covered by the measures, as well as the method of allocation of the corresponding transfers among commodities. "MPS commodities", which vary across countries, are those for which market price support is explicitly calculated in Table 2.

            Market Price Support (MPS) and CSE by commodity in Table 2 are calculated for the following commodities: common wheat, durum wheat, maize, barley, oats, rice, sugar, milk, beef and veal, pig meat, poultry meat, sheep meat, eggs and potatoes. Definitions are provided only for basic data sets from which all the other data sets in this table are derived, following the formula indicated in each commodity table. Specific sources are indicated in square brackets.

            PSE by commodity in Table 3 are calculated only for commodities produced in the country within a common set of commodities (common wheat, durum wheat, maize, barley, oats, rice, soybeans, sunflower, rapeseed, sugar, milk, beef and veal, pigmeat, poultry meat, sheep meat and eggs); provided that the value of production of that commodity exceeds 1% of the total value of production in the country concerned. All data sets in the calculation of PSE by commodity come from Tables 1 and 2 where definitions are included

. Definitions of the indicators, criteria of classification of programmes included, and methods of calculation can be seen in OECD, Methodology for the measurement of support and use in policy evaluation [http://www.oecd.org/agr/policy].

            European Union (EU) corresponds to EU-12 for 1986-94 and to EU-15 from 1995 onwards, and includes ex-GDR as from 1990. Levels of production and consumption are on a crop year for crops and on a calendar year for livestock products. For example, 2000 production and consumption data for crops refer to the crop year 2000/01. Producer price and reference price for all products are on a calendar year. Budgetary payments are on a fiscal year basis.

            EAGGF Guarantee Fund expenditures: Spending under the EAGGF Guarantee fund covers direct payments to farmers, market intervention measures, export refunds, as well as co-financing with national budgets for agri-environmental, afforestation and early retirement measures. With the Agenda 2000 CAP reforms, the EAGGF Guarantee fund has become almost the only source of funding for all agricultural expenditure. Payments and levies for cereals in fiscal year t+1 are allocated to the PSE in year t. For example, 2000 refers to fiscal year 2001.

            EAGGF Guidance Fund expenditures: The EAGGF Guidance fund section, which is one of the EU's Structural Funds, co-finances measures to assist structural change in the agricultural sector and to promote rural development. Specific measures include investment aid, schemes to help young farmers set up for the first time, training activities, support for processing and marketing of agricultural and forestry products and rural infrastructure projects. With the Agenda 2000 CAP reforms, the EAGGF Guidance fund finances rural development measures under Objective 1 (regions which are lagging behind) and the EU rural development initiative (LEADER PLUS).

            National policies: Expenditures by EU member States (national contribution to EU payments or pure national), mainly on a fiscal year basis, were, as far as possible, disagregated into TSE categories. Notwithstanding the progress made, the degree of detail still varies across countries and policy coverage is not yet comprehensive, particularly for those countries for which sub-national measures are important.

 

 

Table 2. Market Price Support and Consumer Support Estimate by commodity

Definitions:

I. Level of production

Cereals, oilseeds, rice, sugar bee, potatoes and tomatoes: Total harvested production, crop year, annual data [1].

White sugar (sugar equivalent): Total usable production of white sugar equivalent, crop year [2].

Plants and flowers: Value of production of plants and flowers [04200] in the EU, including Nursery plants [04210] and Ornamental plants and flowers (including Christmas trees) [04220] and excluding Plantations [04230] [3].

Wine: Total wine official production, crop year [4]

Milk: Total production of milk from dairy cows, excluding milk for suckling; calendar year [5].

Meats: Gross indigenous production, carcass weight, calendar year [6].

Eggs: Total usable production of eggs in shell (in tonnes), calendar year [6].

Sources:

[1] EUROSTAT, NCRONOS, theme 5B, table PVPROVGA; NCRONOS codes: common wheat: C1120; durum wheat: C1130; maize: C1200; barley: C1160; oats:  C1180; paddy rice: C1250; soybeans: C1470; rapeseed: C1430; sunflower: C1450; sugar beet: C1370; potatoes: C1360; tomatoes: C1750.

[2] EUROSTAT, NCRONOS, theme 5B, Sugar Supply Balance Sheet, table BISUCREA, code B1520.12.

[3] EUROSTAT, NCRONOS, theme 5, Economic accounts for agriculture and forestry, Values at current prices (eaa01), Value at producer price (04).

[4] European Commission.

[5] EUROSTAT, NCRONOS, Milk and Milk products, table LAFERMEA, code MF009 and AGLINK for most recent years.

[6] EUROSTAT, NCRONOS, theme 5, Meat Supply Balance Sheets, table BIVIANDA; and AGLINK estimates for most recent year. NCRONOS codes: beef and veal: B4110.01; pigmeat: B4120.01; poultrymeat: B4150.01; sheepmeat: B4130.01; eggs: B4700.12.

II. Producer prices (farm gate)

Cereals: Production weighted annual average of selling prices in member States, excluding deductible VAT, calendar year. For durum wheat prices are production weighted annual average selling price in France, Greece, Italy, Portugal and Spain. The published EUROSTAT price is net of the basic levy but it has been added back into the production price presented here [1].

Paddy rice: Production weighted annual average selling price for rice in Greece, Italy, Portugal and Spain, excluding VAT, calendar year. The published EUROSTAT price is net of the basic levy but it has been added back into the production price presented here [1].

Soyabeans: US, c.i.f., Rotterdam, calendar year [2].

Rapeseed: Europe, "0", c.i.f., Hambourg, calendar year [2].

Sunflower: Sunseed, EU, c.i.f. Lower Rhine, calendar year [2].

White sugar (sugar equivalent): implicit production price for beet in white sugar equivalent, obtained by dividing the production value of sugar beet by the production of white sugar [1].

Sugar beet: Production weighted annual average of selling prices for sugar beet in EU member States, excluding deductible VAT, calendar year. The published EUROSTAT price is net of the basic levy but it has been added back into the production price presented here [1].

Potatoes: Production weighted annual average selling prices of main crop potatoes in member States, excluding VAT, calendar year [1].

Tomatoes: Average unit value of intra-EU imports of tomatoes, fresh or chilled [HS: 0702] and intra-EU imports of tomatoes prepared or preserved otherwise than by vinegar or acetic acid [HS: 2002], weighted by the shares of production for fresh consumption and for processing. The unit value of tomatoes for processing is multiplied by 0.8 to convert it into fresh tomato equivalent. A processing margin of 5% is also deducted. For each type of tomato, the unit values are calculated using monthly data [3], which are weighted by the monthly distribution of production in total annual production of the type of tomato [8] to obtain an annual calendar year average.

Plants and flowers: not applicable, the value of production is used directly.

Wine: Production value [code: 07000] [4] divided by production volume.

Milk: Value of production (value of deliveries of cows’ milk, including deliveries of cream -- in milk equivalent -- plus value of milk used on the farm valued at the reference price for feed milk and at the delivery price for milk for human consumption) divided by the level of production. The published EUROSTAT price is net of the basic levy but it has been added back into the production price presented here [5].

Beef and veal: Production weighted average market price for all categories of adult bovine animals, calendar year [6].

Pigmeat: Production weighted average prices in member States, calendar year, class II pigmeat, carcass weight. For France the price refers to Grade I; for the Netherlands to pigs light; and for Ireland to slaughter weight, Class U and after July 1995 class E [7].

Poultrymeat: Production weighted average of selling prices in member States of live chickens, first choice, calendar year; converted to carcass equivalent by dividing the liveweight price by 0.75 [7] .

Sheepmeat: Average market price for sheep and lambs, carcass weight, calendar year [8].

Eggs: Production weighted average of selling prices in member States of fresh eggs, calendar year; given per 100 eggs and converted to a per tonne basis by dividing by average weight 57.5 g (i.e. /0.00575) [7].

Sources

[1] EUROSTAT, NCRONOS, theme 5, table PRAG01A. The specific codes used are: common wheat: 1120; durum wheat: 1130; maize: 1200; barley:  1160; oats: 1180; paddy rice: 1251; sugar beet: 1371, potatoes: 1361.

[2] Oil World Annual, various issues.

[3] EUROSTAT, COMEXT.

[4] EUROSTAT, NCRONOS, theme 5, Economic accounts for agriculture and forestry, Values at current prices (eaa01), Value at producer price (04).

[5] EUROSTAT, NCRONOS, theme 5, table PRAG02M, code 5185.

[6] European Commission and OFIVAL.

[7] EUROSTAT, NCRONOS, theme 5, table PRAG02A: pigmeat:  4421; poultrymeat:  4821; eggs:  5315.

[8] European Commission.

III. Level of consumption

Cereals: Total domestic use of common wheat, durum wheat (triticum durum), grain maize, barley, oats and mixed grains other than maslin, crop year [1].

Rice: Total domestic use of paddy rice, crop year [2].

Oilseeds: Total domestic use of soya, rape and turnip rape, and sunflower, crop year [3].

Sugar: Total domestic use of white sugar equivalent, crop year [4].

Potatoes: Total domestic uses of potatoes, crop year [5].

Tomatoes: Total domestic uses of tomatoes, crop year [6].

Plants and flowers: Production value minus net trade of plants and flowers (HS: 06) [7].

Wine: Total official wine production, crop year [8].

Milk: Total domestic use of drinking milk plus total domestic use of butter (product weight) and cheese, other than processed cheese in milk equivalent, calendar year. It is assumed that 22 litres of milk are needed to produce 1 kg of butter and 6.4 litres of milk are needed to produce 1 kg of cheese [9].

Meats: Total domestic use of beef and veal (total), carcass weight, calendar year [10].

Eggs: Total domestic use of eggs, calendar year [11].

Sources:

[1]        EUROSTAT, NCRONOS, theme 5, Cereals Supply Balance Sheets, table BICEREAA and AGLINK estimates for recent years. The specific codes used are: common wheat: B1111; durum wheat: B1112 (triticum durum); maize: B1124 (grain maize); barley: B1122; oats:  B1123 (oats and mixed grains other than maslin).

[2]        EUROSTAT, NCRONOS, theme 5, Rice Supply Balance Sheets, table BIRIZXXA, code B1201 (sum of long, round and medium paddy rice).

[3]        EUROSTAT, NCRONOS, theme 5, Fats and Oils Supply Balance Sheets, table BIGRHUIA and AGLINK estimates for recent years. The specific codes used: soybeans: B5113; rapeseeds:  B5111 (rape and turnip rape); sunflower: B5112.

[4]        EUROSTAT, NCRONOS, theme 5, Sugar Supply Balance Sheets, table BISUCREA, code B1520.50 and F.O. Licht International Sugar and Sweetener Report estimates for recent years.

[5]        EUROSTAT, NCRONOS, theme 5, Potatoes Balance Sheets, table BIPOTERA.

[6]        EUROSTAT, NCRONOS, theme 5, Fruits and vegetables Balance Sheets, table BIFRLEGA.

[7]        EUROSTAT, COMEXT.

[8]        European Commission.

[9]        EUROSTAT, NCRONOS, theme 5, Milk and Milk Products Supply Balance Sheet, table BILAITXA, codes B4411, B4450 and B4460; AGLINK for recent years.

[10]      EUROSTAT, NCRONOS, theme 5, Meat Supply Balance Sheet, table BIVIANDA and AGLINK estimates for recent years. The specific codes used are: beef and veal: code B4110.50; pigmeat: code B4120.50; poultrymeat: B4150.50; sheepmeat: B4130.50 (sheepmeat and goatmeat).

[11]      EUROSTAT, NCRONOS, theme 5, Meat Supply Balance Sheet, table BIVIANDA and AGLINK estimates for recent years. The specific code is eggs: B4700.50.

IV. Reference prices

Common wheat: EU export price of standard quality wheat (FCW 2) to specified zones, fob Rouen, calendar year, minus handling and trading margin [1].

Durum wheat: Canada No.1 W Amber Durum (CWAD), fob St. Lawrence, minus handling and trading margin [1].

Maize: EU import price of USA Yellow Corn No. 3, c.i.f. Rotterdam, calendar year, minus handling and trading margin [1] extrapolated using the US Gulf No. 3 Yellow fob since 2002 [1].

Barley: EU export price, fob French (Rouen), calendar year, minus handling and trading margin [1].

Oats: EU import price, c.i.f. Rotterdam and fob Sweden price from 1995 onwards, calendar year, minus handling and trading margin [1], updated in 2004 using the oat price white heavy N0.2, FOB Minneapolis [9].

Rice: EU import price of short-grain Japonica rice, husked (since 1995 rice type indica) c.i.f. Rotterdam, in "green ECU", calendar year, monthly data, converted to paddy rice by dividing the price by 1.25, minus handling and trading margin [2], and converted to market ECU using the "switchover coefficient" defining green ECU parity with the market ECU.

Soyabeans: cf. producer price.

Rapeseed: cf. producer price.

Sunflower: cf. producer price.

White sugar(equivalent): White sugar, Paris, contract No. 2, European ports in bags of 50 kg, calendar year, dividing by the product of the ratio of white sugar intervention price to basic sugar beet price and the ratio of white sugar production to sugar beet production. As of 2000 London prices are used [3].

Potatoes: Calculated from the average import tariff rates (lines 7019051, 7019051 (in-quota), 7019059 and 7019090) [10] weighted by extra-EU imports [7], applied to the producer price (PP) using the formula [PP/(1+tariff)].

Tomatoes: Producer price minus the market price differential. The market price differential is the average of the market price differentials calculated for fresh tomatoes and for tomatoes for processing, weighted by the shares of production for fresh consumption and for processing. The market price differential for fresh tomatoes is the unit value of extra-EU trade of tomatoes, fresh or chilled [HS: 0702] calculated using monthly data [3], weighted by the monthly distribution of production in total annual production of fresh tomatoes [2] to obtain an annual calendar year average. Extra-EU exports are used in the months when the EU is a net exporter and extra-EU imports are used in the months when the EU is a net EU importer of fresh tomatoes. Similarly, the market price differential for tomatoes for processing is the unit value of extra-EU trade of tomatoes prepared or preserved otherwise than by vinegar or acetic acid [HS: 2002], calculated using monthly data [3], weighted by the monthly distribution of production in total annual production of tomatoes for processing use [2] to obtain an annual calendar year average. Extra-EU exports are used in the months when the EU is a net exporter and extra-EU imports are used in the months when the EU is a net EU importer of tomatoes for processing.

Plants and flowers: Calculated from the simple average of import tariff rates (HS: 06) [4] applied to the producer price (PP) using the formula [PP/(1+tariff)].

Wine: Producer price minus the market price differential. The market price differential is calculated as export refunds [5] divided by extra-EU exports [7].

Milk: Border prices of butter, SMP and cheese converted into a milk equivalent border price using technical coefficients minus a processing margin, calendar year. The border price of butter is the “Butter f.o.b. export price, 82% butterfat, N.E.” [6], the border price of SMP is “Non fat dry milk f.o.b export price, extra grade, Northern Europe” [6]; and the border price of cheese is the average unit value of extra-EU exports of the five largest traded categories [7]. The processing margin is calculated as the difference between the domestic wholesale price (domestic wholesale prices of butter and SMP converted into a milk equivalent price using technical coefficients) and the producer price. The domestic wholesale price of Butter is the “Wholesale price, branded butter, Cologne” [6] and the domestic wholesale price of SMP is the “Skim milk powder wholesale price (Germany) [6].

Beef and veal: Unit export value in extra-EU trade of meat of bovine animal, fresh and chilled (code 0111, SITC, Rev. 3), in carcass weight equivalent, calendar year [7] minus processing costs. Processing costs are calculated as actual processing costs in selected French abattoirs [8] multiplied by the reference border price at the processing level (unit export value in extra-EU trade), divided by the producer price at the processing level (unit export value in intra-EU trade) [7].

Pigmeat: Unit export value in extra-EU trade of meat of swine, fresh, chilled or frozen (Code 0122, SITC Rev3) less exports to Japan, in carcass weight equivalent, calendar year [7] minus processing costs. Processing costs are calculated as actual processing costs in selected French abattoirs [8] multiplied by the reference border price at the processing level (unit export value in extra-EU trade), divided by the producer price at the processing level (unit export value in intra-EU trade) [7].

Poultrymeat: Unit export value in extra-EU trade of 65% chickens, frozen (NIMEXE Code 020203 and, since 1989, weighted average of CN 02071190 and CN 02071290 of external trade statistics), in carcass weight equivalent, calendar year [7] minus processing costs. Processing costs are calculated as the ratio of producer price at the processing level (unit export value in intra-EU trade) [7] and the producer price at the farm gate level [see Section II], which is multiplied to the reference border price at the processing level (unit export value in extra-EU trade).

Sheepmeat: EU import price of frozen New Zealand lamb, grade PM, c.i.f. UK, calendar year, net of slaughter and freezing costs, plus 30% adjustment to account for the difference in weight and quality between frozen New Zealand lamb and fresh UK lamb [7]. From 2001, unit value of UK exports of carcasses and half carcasses of lamb, frozen, from New Zealand (code 02043000) [7].

Eggs: Unit export value in extra-EC trade of poultry eggs in shell, fresh or preserved, other than eggs for hatching (NIMEXE Code 040514 and since 1988 CN 04070030 of external trade statistics), calendar year [7]. Unit market price support is the difference between unit export value in intra-EU trade minus the reference price.

Sources:

[1] International Grains Council (on line).

[2] European Commission.

[3] International Sugar Organisation, Market Report and Press summary, monthly.

[4] WITS database.

[5] EAGGF budget, European Commission.

[6] AGLINK database.

[7] EUROSTAT, COMEXT.

[8] OFIVAL.

[9] USDA, Feed Outlook.

[10] EC Official Journal.

X. Budgetary transfers

Levies

Common wheat, durum wheat, maize, barley, oats

Basic levy : applied from 1985 to 1993; net of aid for small cereal-growers.

Additional levy: applied from 1987 to 1992.

Sugar

Production levies: only the portion paid by producers (60%) is included in this category. The remaining 40% is paid by processors and is included in the CSE. See above.

Milk

Basic co-responsibility levy: fiscal year.

Additional levy: fiscal year.

Sources:

European Commission Budget: Guarantee Section, various years.