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Evaluation of Measures Applied Under the Common Agricultural Policy to the Cereals Sector

European Commission. March, 2013.

Friday 15 March 2013, by Carlos San Juan

1.1 Introduction

This evaluation examines the impact of measures under the Common Agricultural Policy (CAP) applied to the cereals sector covering the period from 1 January 2005 onwards.

In 2003, the Mid-Term Review (MTR) marked a major change in policy with the introduction of ‘decoupling’ and further adjustments were made under the 2008 CAP Health Check. The focus of measures, specifically in the cereals sector, shifted from automatic price support to safety net measures. Increased emphasis was also placed upon meeting sustainability, greater market orientation and a competitive sector.

The crops examined are common wheat, durum wheat, barley, maize, rye, oats and triticale; policy impact is discussed for the EU-27 as a whole, complemented with analysis from ten Member States (MS). Comparisons have been made between the situation in 2000-2003 (‘pre-reform’), 2004-2006 (‘transition’) and 2007-2010 (‘postreform’).

1.2 Overview of the cereals sector

1.2.1 Areas and production

Between the pre- and post-reform periods, EU-27 cereal areas fell from 60.4 to 58.0 million hectares, but the major change in cereal, oilseeds and protein (COP) areas was a sharp expansion in the oilseeds area. Rapeseed benefited from the cultivation of nonfood crops on set-aside land and the energy crop payments, and was the main feedstock in the biodiesel sector. Protein crop areas fell sharply, while uncultivated land initially rose and then fell back after the application of zero rates of set-aside. Common wheat increased its share of the total cereal area from 37% to 40% over the decade; barley’s share remained steady at 23%, but that under maize fell from 16% to 14%. The share of durum wheat fell from 5% to 4%, while that under rye and ‘other cereals’ remained stable at 5% and 14% respectively. Cereal output rose by 5%, but its rate of increase was dwarfed by that of oilseeds, up 46% in the same period. Yields for all five main cereal crops increased, with maize and common wheat consistently recording the highest yields. Maize and durum wheat yields displayed comparatively fast-rising trends, while common wheat, barley and rye yields showed more modest advances.

In terms of self-sufficiency, common wheat, barley and oats all produced surpluses throughout. Durum wheat was the only cereal with a consistent deficit.

1.2.2 End-use developments

The contribution of biofuel provided an additional 6.6 million tonnes to cereal demand over the period under review. Without this growth, combined EU-27 cereal consumption in the post-reform period would have been barely two million tonnes above that of the pre-reform level. In feed, the largest end-use for cereals, the cereal share of industrial feed output rose from 43.1% to 47.5%. For human consumption, the second largest cereal end-use, demand was relatively stable. This primarily consists of milling for flour. In industrial use, the starch sector witnessed an expansion of processing capacity in Western and Central and Eastern Europe. However, while most of the grind capacity is still located in the EU-15, the EU- 12 had a more rapid rate of growth in processing capacity and increased its share of the total EU grind.

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