Extensive Summary

Objectives, overall approach and result

The main objective of this project was to develop an analytical tool that enables the integrated assessment of the impact of (a selection of) all Statutory Management Requirements (SMRs) and Good Environmental and Agricultural Condition standards falling under the EU Cross Compliance (CC) policy at regional level. Impacts assessed by the tool include effects on agricultural markets, producer’s income, consumer’s welfare, land use, soil, water, air, climate, biodiversity and landscapes, as well as animal welfare and public health. The project also did an evaluation of the impacts of cross-compliance measures since 2005 and in different scenario situations. These differ according to levels of compliance with CC measures and regional implementation specifications. The assessments of impacts also take account of national and regional conditions.

The CCATool enables the use of the tool beyond the lifetime of the project and is available in two user types: end users and researchers.

  • End users or viewers can investigate the results of predefined scenarios and have the possibility to extract information from these scenarios to Word, Excel, etc. They do not have the possibility to change and/or rerun these scenarios, nor have the possibility to define and create additional scenarios. End users however will have insight from within the tool in most documents and presentations and also most relevant input data.
  • Researchers can create and define new scenarios by inheriting from existing scenarios, can run those new scenarios and investigate the results. Researchers will also have insight in all relevant input data.

Organisation in work packages

The project is organized in 5 work packages (WPs). In WP1 the coordination and management of the project is done. The rest of the project is structured in such a way that the main analytical framework of the project is designed in WP2. This WP provided the analytical and methodological input for the way impacts of CC were assessed using the knowledge and tools developed in WP 4 and the analytical framework in WP 5 and using the data and information collected in WP3. The overall evaluation of the effects of CC since 2005 is done using the knowledge and models in WP4 and the analytical tool developed in WP5. The results of this assessment were then critically evaluated in WP2 and WP3 in order to produce feed back to WP4 and WP5 to improve the analytical tool. 

Focus of project

Cross Compliance is an extra mechanism to stimulate farmers to adjust behaviour in a desired direction. Enforcement measures include monitoring, inspection and punishment in the form of either a legal fine and/or a deduction of direct payments and should encourage further compliance with existing legal requirements (SMRs) and GAEC standards. The adjusted or standard-satisfying behaviour of the regulated (the farmer) generates several impacts.

Part of these impacts will have a private character and affect the regulated party. Standards might also generate private benefits or private disadvantages.  Alongside these there are also other impacts, having a public or/and non-commodity character which are often related to the policy aims associated with the standards.

In terms of impact assessment, the primary focus is on standards. How is this than linked to cross compliance? Firstly, the set of standards taken into account is not an arbitrary one, but includes all those that are part of the cross compliance package. Secondly, the GAECs are considered to be a part of cross compliance and their impacts can thus be directly attributed to cross compliance. Thirdly, there is an indirect effect: cross compliance might improve the degree of compliance to standards because it acts as leverage to the enforcement system. As far as this is the case the changes in impacts can be said to be cross compliance-induced. This project will therefore focus especially on identifying the changes in compliance with SMR and GEACs standards since the implementation of CC in 2005 and on assessing the impacts of additional compliance with standards.

The analytical tool of CCAT enables the assessment of the integrated impacts of CC given different implementation pathways and specific national and regional conditions. In total 2 versions of the integrated assessment tool were built in CCAT: Prototype 1 included impact assessments of a selection of standards while for the final tool practically all standards of CC were included for which impacts could be assessed with the models and knowledge available in the project. The first prototype of the tool was demonstrated at the April 2009 end-user meeting and the final tool was demonstrated at the last end-user meeting in March 2010. The viewer version of this tool can be downloaded from the CCAT website (www.CCAT.nl\UK).

In order to assess impacts of SMR and GAEC standards it is clear that this requires insight into the way these standards are implemented at regional levels, the compliance levels with standards as well as the costs of compliance. These three aspects are likely to vary with regional heterogeneity. For the assessments in CCAT scenarios are developed in which varying levels of compliance with standards and differences in implementations are specified. One main scenario is the baseline which refers to the implementation and compliance level situation level just before CC starts to have its impact which is just before 2005; the first year of implementation of Cross Compliance standards. For the old member states (MS) for all GAECs and most SMRs this is the year 2005 and for most new MS this varies between 2006 and 2009.

Beside the baseline scenario another 8 scenarios are available:

0)     Baseline compliance (2005-2009, depending on SMR and EU country): estimated level in the first year of implementation of a SMR or GAEC under the CC package which differs per Nuts 2 region and standard. 
1)      50% gap closure:  halve way between baseline and 100% compliance
2)      0% compliance:  voluntary level, 0% = minimum level, but is often higher because of voluntary compliance
3)      50% compliance: 50% = minimum level
4)      75% compliance: 75% = minimum level
5)      100% compliance: full compliance
And 3 scenarios which were used for sensitivity analysis:
6)       Shortname100 %: Assumes 100% compliance with standards specified only in national and regional legal text. So the assessment is purely based on the coding table specifications. The results of this scenario will not be different from the compliance scenario of 100% in the case of GAECs as these are based on national legal text available for all EU27 and of SMRs for old MS+ Malta and Slovenia. The other MS are missing. 
7)       Full implementation100%: Assumes 100% compliance in combination with an implementation situation following purely the EU regulation specifications.
8)       All implemented100%: This is a purely hypothetical situation assuming 100% compliance of all SMRs and GAECs including those that are non-mandatory based on EU regulation specifications.

Approach, tools and indicators for the assessment of impacts  

There was a lot of knowledge available from various projects where upon CCAT could built. In particular information from the Cross Compliance project, the CIFAS project, the IRENA project, and the SEAMLESS and NEU project have been a useful basis. Whereas the first three contributed mainly with respect to classifications, characteristic descriptions and indicator frameworks, the latter two projects contributed in terms of modelling tools (CAPRI) or modelling elements (INTEGRATOR of which information was used to further develop MITERRA-Europe).

From the inventory of available indicator frameworks a large set of indicators resulted. In a scrutinize analysis these indicators were linked to various fields of impact. A similar exercise was done for all the SMRs and GAECs, where the regulations were decomposed into several requirements. Together this inventory and classification provided a stepping stone for further indicator selection, where the established linkages made it possible to guarantee that each aspect of the CC measures was properly linked to indicators.

There are four types of assessment approaches included in CCAT:

1)       A modelling-based assessment to estimate impacts on farmers’ income and markets, land use and livestock patterns and  the environment (water, air, soil)
2)       A post-model assessment taking output of CAPRI and MITERRA and translate this further into pressure indicators for biodiversity in terms of changes in intensity and habitat quality.
3)       A qualitative approach involving the allocation of a potential effectiveness scores for biodiversity and landscape preservation to an SMR and GAEC standard. This allocation is based on the legal text at national and regional levels and should be seen as an inventory focussing on a so-called positive by-product of CC standards.
4)       A qualitative approach to estimating the contribution of the implementation of the SMR standards on animal health. Contrary to the above assessments, this approach has been implemented only at the scale of a case study and some limited extrapolations were made to the EU wide scale.

The CCAT tool includes impact assessments for practically all SMR and GAEC standards in relation to all impact fields that could be assessed with the tools, data and knowledge available in the project.

The starting point for every assessment is a scenario specification. The implementation of scenarios implies that measures are assigned to the Nuts2 regions for which they are applicable and they are parameterized in terms of changes of model parameters and/or model inputs. The degree of compliance implies the fraction of the area or of the livestock (per type) of a Nuts2 region for which the measure is applicable. Based on the selected scenario and degree of compliance, the changes in fertilizer and manure use in %-change as compared to the baseline year are derived for all Nuts 2 regions and disaggregated at specific activity levels. These results are used in the CAPRI-Pre-Processor that calculates all the additional costs related to the applied measures. CAPRI then calculates effects on markets, farmers’ income and also on land use (cropping shares) and livestock population size and composition. Since the cropping shares and livestock numbers are then taken as input for further assessments with the environmental models and for the post-model knowledge based assessments of impacts on land use, biodiversity and landscape, practically all impact fields are covered. The only impact fields not assessed EU wide relates to animal welfare and public health. These fields were only assessed in a more profound way in an Austrian case study and some initial EU-wide extrapolations were made from this for a limited number of indicators (See Deliverable 2.8 and 3.8).

Except for the animal welfare and public health, assessments are delivered at the NUTS2 level and cover the whole EU-27. However, some environmental assessments performed by DNDC and EPIC models present results at a more spatially detailed level which is the homogenous Spatial mapping Unit (HSMU) level and a 1* 1 grid level respectively.

Summary of main conclusions

Effects of additional compliance (gap-closure between baseline and 100% compliance) are limited as baseline compliance is already high (average at 90% for most CC standards). Overall effects of cross compliance standards are larger in economic than in environmental and biodiversity terms. However, clear regional diversity is seen.

The potential effectiveness of CC standards on biodiversity and landscape is generally very positive but very strong regional variation occurs due to large differences in implementation at national and regional levels (both for SMRs and GAECs). This effectiveness is assessed on the basis of the formulated obligations in the regional legislations wording (legal texts) which have obtained a score. Total effectiveness is then expressed as the average of scores per group of GAEC and or SMR obligations. 

As to the economic effects the overall conclusion is that costs for becoming compliant with CC standards are only partly compensated by market effects. However, the total costs are limited, especially when concentrating on the costs for additional compliance i.e. the costs that still have to be made between baseline compliance, i.e. the level of compliance when CC was introduced, to reach the 100% compliance rate.

Divergent economic effects occur in crop and animal sectors: In the crops sector the production and prices remain rather constant under influence of CC standards. In the animal sectors we see a general production decrease and a price increase. This generally leads to small but regionally diverse changes leading to both intensification and extensification of livestock and land use.

As to the environmental effects we see in most regions limited declines in agricultural emissions. However, a selection of regions experience negative environmental externalities such as loss in soil carbon in regions in Poland and Southern Portugal, Ammonia emission increases in Poland, Bulgaria, Romania and Alpes-Mediterannée. However, these increases are relative and since the baseline situation refers to very small levels a relative change can be rather large.