The Potential of Land-linked Quotas
At a time when dairy quotas are being phased out, the intellectual space opened by CAP2020 allows us to think about the CAP in a ‘politically incorrect’ way. Against the dominant stream of thinking, we propose that quotas offer a potentially useful and powerful tool to deal with most of the challenges faced by the CAP, and notably environmental issues. In order to clarify our proposal, we mean improving the definition of the core purpose of quotas, as well as their management rules.
To support such a thesis, let us first state that most environmental problems in Europe related to agriculture stem from (i) the inappropriate spatial distribution of production (too much in some places, while too few in others) and related over-specialisation in most cases, and (ii) the excessive intensity of land-use in most places. More specifically, the causes of such dynamics can be found in the concentration of production on cereals in some specialised regions, while other areas are specialised in livestock production. Cereals are used in the forage diet, implying greater use of imported protein (e.g. soya beans), with major environmental impacts abroad. In the meantime, alternative environmentally friendly forage resources such as extensively managed pastures are losing importance in the European production context.
We are aware that such quotas could not be the alpha and omega of the whole CAP in the future.
An overall issue for the CAP is then to maintain balanced land-use across different regions, while capping the overall cereal production used for animal food (and/or imports of substitutes to such cereals) and the related stocking density of animals reared in the EU (currently somewhat excessive in some places). Given this perspective, the use of quotas could be extended to the main sectors that influence environmental and land-use issues, notably crops, dairy, beef and sheep and goats.
These quotas should be designed at different levels:
- The overall European level, at which the amount necessary for different uses should be defined in accordance with market needs (human food and animal food notably), as with the present system of dairy quotas. This would allow a reduction of the environmental pressure on EU grassland and lessen the impact of exports of EU production on the international market (i.e. limiting dumping in developing countries).
- The Member State level, at which the EU quotas are allocated in order to preserve or favour balanced production.
- The regional and more local level, in a perspective that seeks harmonious land-use.
A superlevy scheme should be implemented for production in excess of the quota, as with present dairy quotas.
The advantages of such an approach could be, at least in principle:
- reduced pressure on the CAP budget, as shown by the example of dairy quotas; production is limited and hence payments to farmers are as well.
- maintenance of sustained, higher prices across Europe combined with the prevention of further intensification (which is limited at its root by the quotas themselves). A clear message is given to farmers, meaning they can apply their entrepreneurial spirit towards optimising their production pattern to a stated production objective, at the lowest possible cost;
- more direct management of desirable land-use, without giving excessive room to market forces which have till now led to intensification on the one hand and land abandonment on the other;
- a strong levy on the farm economy, thus allowing the efficienct application of instruments such as cross-compliance without high costs.
We are aware that such quotas could not be the alpha and omega of the whole CAP in the future. They should be designed alongside the development of more positive incentive tools such as the agri-environment measure (which quotas could strongly support while providing the necessary structural basis for good practice). We are also aware that quotas require considerable research in order to find the balance between the desirable effects outlined above and the administrative and political burden (but the management of the dubious Single Farm Payments is not perfect from this perspective, and has much less clear objectives). Our purpose, at this stage, is simply to open the range of discussed options to further debate.
17 Dec 2008
Xavier Poux is a consultant at AScA and a fellow researcher at RGTE. He is a member of the executive committee of the European Forum on Nature Conservation and Pastoralism.
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