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Desertification Indicator System for Mediterranean Europe


1. Definition

Name

EU PRODUCTION SUBSIDIES

Brief definition

Percentage of EU Production subsidies on the Standard Gross Margin plus EU subsidies

Unit of measure

%

2. Position within the logical framework DPSIR

Type of Indicator

Driving Force

3. Target and political pertinence

Objective

The indicator aims to show how the structure of CAP support influences the choice of farmers in terms of agricultural production.

Importance with respect to desertification

The impact of the CAP has operated through its price and structural policies. Price support has ensured an adequate income to farmers, and thus contributed to the development of regional economies and the maintenance of landscapes especially in less favoured areas. However, the price support under the Common Agricultural Policy also accelerates the intensification and specialisation process in Europe. Higher farm prices under the CAP encourage farmers to produce more which, given the limited land base in Europe, implies greater intensification and use of inputs such as fertilisers. Differences in protection rates under the CAP tend to favour more environmentally stressful crops. Imbalances in protection were also responsible for the growth in intensive animal husbandry.

International Conventions and agreements

The UNCCD emphasizes that combating desertification must be tackled within the general framework of actions to promote sustainable development.

Secondary objectives of the indicator

The indicator aims to show how the CAP support affects the patterns of agricultural production and farming practices, which, in turn, determine the environmental impact of agriculture.

4. Methodological description and basic definitions

Definitions and basic concepts

Measures for Common Market Organization (CMO):

Legal basis for Arable Crops:

Council Regulation (EC) No 1253/1999 of 17 May 1999 amending Regulation (EEC) No 1766/92 on the common organisation of the market of cereals and repealing Regulation (EEC) No 2731/75 fixing standard qualities for common wheat, rye, barley, maize and durum wheat

Council Regulation (EC) No 1251/1999 of 17 May 1999 establishing a support system for producers of certain arable crops

Commission Regulation (EC) No 2316/1999 of 22 October 1999 laying down detailed rules for the application of Council Regulation (EC) No 1251/1999 establishing a support system for producers of certain arable crops (Consolidated text)

Council Regulation (EC) No 1252/1999 of 17 May 1999 amending Regulation (EC) No 1868/94 establishing a quota system for the production of potato starch

Legal basis for Wine:

Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine.

Commission Regulation (EC) No 1227/2000 of 31 May 2000, laying down detailed rules for the application of Council Regulation (EC) No 1493/1999 on the common organisation of the market in wine, as regards production potential

Legal basis for Olive Oil:

Council Regulation (EC) No 1513/2001 of 23 July 2001 amending Regulation No 136/66/EEC and Regulation (EC) No 1638/98 as regards the extension of the period of validity of the aid scheme and the quality strategy for olive oil (OJ L 201,26.7.2001]

Legal basis for Fruit and Vegetables:

Acting on a Commission proposal the Council on 4 December 2000 adopted the Regulation (EC) No 2699/2000 amending Regulation (EC) No 2200/96 on the common organisation of the market in fruit and vegetables, Regulation (EC) No 2201/96 on the common organisation of the market in processed fruit and vegetables and Regulation (EC) No 2202/96 introducing a Community aid scheme for producers of certain citrus. The new Regulation applies to each product or product group concerned from the 2001/02 marketing year. The higher ceiling on aid towards the operational funds of producer organisations applies from 1 January 2001. This is the first substantial modification of the fruit and vegetable reform package adopted by the Council in November 1996.

Legal basis for Tobacco:

Council Regulation (EEC) No 2075/92 and following amending Regulations

Legal basis for Hops:

Council Regulation (EEC) No 1696/71 of 26 July 1971 on the common organisation of the market in hops (OJ L 175, 4.8.1971) Council Regulation (EEC) No 1784/77 of 19 July 1977 concerning the certification of hops (OJ L 200, 8.8.1977) and Commission Regulation (EEC) No 890/78 of 28 April 1978 laying down detailed rules for the certification of hops (OJ L 117, 29.4.1978) Council Regulation (EC) No 1098/98 of 25 May 1998 introducing special temporary measures for hops (OJ L 157, 30.5.1998) and Commission Regulation (EC) No 609/1999 of 19 March 1999 laying down detailed rules for granting aid to hop producers (OJ L 75, 20.3.1999)

Legal basis for Milk and Milk products:

Council Regulation (EC) No 1255/1999 of 17 May 1999 on the common organisation of the market in milk and milk products Council Regulation (EC) No 1256/1999 of 17 May 1999 amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector (OJ L 160, 26.6.1999)

Legal basis for Beef and Veal:

Council Regulation (EC) No 1254/1999 of 17 May 1999 on the common organisation of the market in beef and veal Commission Regulation (EC) No 2342/1999 of 28 October 1999 laying down detailed rules for the application of Council Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal as regards premium schemes Commission Regulation (EC) No 907/2000 of 2 May 2000 laying down detailed rules for the application of Council Regulation (EC) No 1254/1999 as regards aid for private storage in the beef and veal sector

Legal basis for Sheep and Goat:

The sheep and goat sector was not included in the Agenda 2000 reforms because the pressing reasons for reform existing in other sectors: overproduction, trade problems, budgetary pressure, were not present in the sheep market. The last major reform was agreed by the Council in June 1992: Commission Regulation (EC) No 2069/92; Commission Regulation (EC) No 2070/92

Standard Gross Margins

The concept of Standard Gross Margin (SGM) is used to determine the economic size of farms, which is expressed in terms of European Size Units (ESU). This concept is also used in the Farm Structure Survey organised by Eurostat. The Standard Gross Margin (SGM) of a crop or livestock item is defined as the value of output from one hectare or from one animal less the cost of variable inputs required to produce that output. For each region all crop and livestock items are accorded an SGM. The Liaison Agencies calculate the SGMs themselves on the basis of empirical data collected from farms. To avoid bias caused by fluctuations, e.g. in production (due to bad weather) or in input/output prices, three year averages are taken. SGMs are expressed in Commission publications in European Currency. SGMs are updated every two years and are calculated on a regional basis for more than 90 separate crop and livestock items. This large number of items not only reflects the diversities of agriculture within the European Union but also indicates the level of detail that is required to ensure that the results of FADN and other surveys are both comprehensive and reliable.

Benchmarks Indication of the values/ranges of value

0 - 0.33
0.34 - 0.66
0.64 - 1

Methods of measurement

Ratio between Production Subsidies (P.S.)/ Standard Gross Margin+P.S.

Limits of the indicator

The indicator does not account for subsidies on per hectare bases (i.e. Arable Crop) and subsidies on for level of production (i.e. Olive Oil)

Linkages with other indicators

Net farm Income; Husbandry Intensity; Gross Income

5. Evaluation of data needs and availability

Data required to calculate the indicator

Financial information on Expenditure for the EAGGF Guarantee section from CEC DG Agriculture. Standard Gross Margin for each crop/husbandry

Data sources

National/Regional Offices involved in the management of EAGGF Guarantee section.

The Farm Accountancy Data Network (FADN). At national level the responsibility for FADN data collection rests with the Liaison Agencies, often together with agricultural research institutes. These either employ their own staff to visit the sample farms and to collect the data, or they contract this work out to accountants, universities, farmers' cooperatives or other organisations.

Availability of data from national and international sources

European Commission - DG Agriculture

6. Institutions that have participated in developing the indicator

Main institutions responsible

University of Basilicata

Other contributing organizations

Universities of Athens, Lisbon, Murcia

7. Additional information

Bibliography

The European Commission DG Agriculture: Financing the common agricultural policy.OECD, 1999: Environmental indicators for agriculture, methods & results

Other references

http://europa.eu.int/

Contacts Name and address

University of Basilicata
Prof Giovanni Quaranta
email: quaranta@unibas.it