The future of farming

Picture of Emil  Erjavec
Re: CAP budget
by Emil Erjavec - Thursday, 7 May 2015, 6:17 PM

Dear Nikolai,

many thanks for your interesting questions which could clarify the topic. Some of the questions are very technical, I am not dealing with the budget on tecnical, but on strategic level. If you have more questions will be better to go on EC DG Agri side ( and ask them directly. 

  1. I presume the 57,6 billion EUR under Title 05 is the full budget of what we colloquially call the CAP?
EE: Yes.

  • Are there other agriculture-related expenses in the EU budget outside Title 05? For instance promotion measures; are they within this budget or they fall outside?

EE: The EC originally in the MFF 2014-2020 proposed the part of CMO funding relating to the crisis reserve will be outside the budget, but the final decision has been that all CAP related expenditures are under the Chapter 2. In this sense the Title 05 should include all  CAP expenses.

  • Title 0503 represents the full direct payments section and nothing else? I assume the money for the crisis reserve fund is part of the figure?
EE: This item is including only the direct payment schemes. The crisis reserves is not the part of this measures. In fact there is no specific item for crisis reserves.

  • Titles 0507 and 0508 - 'audit of expenditures' & 'policy strategy coordination' - what are these activities and who carries them out? Are these basically also EU staff costs similar to Title 0501 - 'administrative expenses'?
EE: This are activities done by DG agri civil servants. Part of the activities is also outsorced.

  • Title 0502 - 'improving competitiveness of agricultural sector through market intervention' - what is this? Is it the full budget for the CMO?
EE: You are right this should be the the full CMO budget.

  • Title 0506 'international aspects' - what kinds of activities are these?
EE:  To technical for me. I pressume that this item is covering the EC activities regarding WTO, FAO, OECD and other international organisations, trade agreements, bilateral work, etc. 

Finally a more general question: the EU seems to be moving towards a freer market in agriculture. At the same time, it appears quite some money is set aside to cushion the effects of market liberalization and boost producers' ability to better compete on the international plain. Any move towards liberalization seems to be accompanied by calls for money to protect against bad times. Do you know of any studies that have quantified the finances that can be directly linked to measures to boost exports and protect against internationally induced crises?

EE: You are right that the CAP intervention regarding agricultural markets are gradually liberalised. There is itention to have safety net for markets which means that in time of price and market crisis there will be still market interventions in place. It has to be clearly stated that the key stabilisation policy are direct payments and that CAP is not providing risk management tools like in some other developed countries.  Export refunds are not anymore daily policy instruments, they are used only in the time of market crisis. The best source for explanation is DG Agri web side. Sorry, I do not have additional good sources on this issues. Maybe some works on risk management and dealing with the EU from OECD or some studies for European parliament (look the side of the CommAgri).

Thanks for the questions and do not hesitate to come back if there is still something open.

Emil Erjavec