Cap Payments after 2013 and Rural Public Goods

The aim of this paper is to reconsider the objectives of European farm policy taking a long-term view to assessing the instruments currently in place and advancing some suggestions for the design of the future Cap due in 2013. The proposed guidelines for reforms include defining targeting instruments on clear objectives, guaranteeing social return for public money and replacing assistance with incentives. Measures are suggested to make EU agriculture more competitive by adapting instruments and regulations to that purpose. It is proposed to amend the current complex payment schemes, which could be simplified with a set of payments based on “contracts for services” only, including potentially three basic levels of services (basic husbandry of the countryside preserving farming landscapes; territorial services; environmentally sensitive measures). Regarding market management, it is proposed to reform but maintain public intervention to guarantee a floor price (or “safety net”) restricted to exceptional circumstances. Sharing financial responsibility between the EU and the Member States according to the principle of subsidiarity would imply some co-financing of the first pillar.