Update of Analysis of Prospects in the Scenar 2020 study. Preparing for change
"The objective of the Scenar 2020-II study was to refine and improve the identification of major future trends and driving factors – and the perspectives and challenges resulting from them – provided by the initial Scenar 2020 study (December 2006) on the future of European agriculture and the rural world. In this respect the study does not aim at evaluating the impact of potential policy changes but to compare how the agricultural sector might evolve under different, and somewhat extreme, pathways which, to a large, although not full extent, follow the assumptions of the first study.
To reflect elements of the public debate, without prejudging future policy proposals, three policy scenarios are proposed within Scenar 2020-II.
The first is a 'Reference' scenario, in which reference policy decisions are carried forward in the time period of the study. For illustrative purposes it assumes a 20% reduction of CAP budget in real terms, the implementation of a Single Payment System (SPS) as of 2013, full decoupling, a 30% decrease in direct payments (DP) in nominal terms and a 105% increase of the European Agricultural Fund for Rural Development (EAFRD). Trade agreements are synthetically represented, e.g. the WTO Agreement is based on the December 2008 Falconer paper. To some extent this reflects similarities with the 'baseline' scenario of the first study.
The second is called 'Conservative CAP' scenario, and keeps the overall level of the budget devoted to agriculture but changes the balance between pillars. It assumes a continuation of the results of the Health Check (HC) after 2013, a flat rate (regional model) implemented at national level, coupling as HC, and a 15% decrease of direct payments in nominal terms, a reduced (45%) increase of EAFRD. Trade policies are maintained as in the Reference scenario.
The third is a 'Liberalisation' scenario, in which all agricultural trade-related measures are discontinued. The CAP budget is reduced by 75% in real terms, all direct payments and market instruments are removed, and there is a 100% increase of EAFRD. Like in the previous study extreme scenarios were chosen in order to test what would be the maximum range of impacts the agricultural sector would be faced with over the medium term.
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