European Union

Evaluation of Agricultural Policy Reforms in the European Union


Evaluation of Agricultural Policy Reforms in the European Union | OECD Free preview | Powered by Keepeek Digital Asset Management Solution

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.

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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.

This report provides an overview of the main characteristics and structure of the current Common Agricultural Policy (CAP) and its developments in the last 25 years. It analyses the impacts of policy changes on production, trade, land use, farm structure, the environment and some aspects of rural development.

 Recommendations of this report

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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