Evaluation support study of the EU support schemes for agriculture in the outermost regions (POSEI) and smaller Aegean islands (SAI) :Final report

The Common Agricultural Policy (CAP) was established right from the beginning of the European integration process and has been in place since 1962 with a set of objectives defined in the Treaty on the Functioning of the European Union (TFEU). These objectives are as follows: - to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour; - to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture; - to stabilise markets; - to ensure the availability of supplies; - to ensure that supplies reach consumers at reasonable prices. The implementation mechanisms of the CAP have evolved enormously over time, adjusting to the changing circumstances and society’s demands. The CAP has been organised in so-called 1st and 2nd Pillars. The 1st Pillar, financed by the European Agricultural Guarantee Fund (EAGF), supports direct payments to farmers and market intervention measures. The 2nd Pillar corresponds to the EU’s rural development policy and is financed by the European Agricultural Fund for Rural Development (EAFRD). In the 2014-2020 programming period the two pillars and funds were maintained, and three overarching objectives were defined for the CAP’s implementation: (i) viable food production, (ii) sustainable management of natural resources and climate action, and (iii) balanced territorial development. The TFEU also establishes (Art. 349) that some EU regions, due to their “remoteness, insularity, small size, difficult topography and climate, economic dependence on a few products” may benefit from specific measures in various sectors, including agricultural policy and the conditions for supply of raw materials and essential consumer goods. These regions are Guadeloupe, French Guiana, Martinique, Réunion, Saint-Barthélemy, Saint-Martin, the Azores, Madeira, the Canary Islands and, later, Mayotte. In this respect, specific programmes were established within the CAP to support the agricultural sector and the supply of agricultural products to these regions (except for Saint-Barthélemy and Saint-Martin), initially per country and later under a single regulation and under the designation of POSEI scheme1 (Programme d’Options Spécifiques à l’Eloignement et à l’Insularité). These programmes are established under the 1st Pillar of the CAP (funded by EAGF) and replace the implementation of direct payments in these territories by a more specific and targeted set of support measures, while complementing the implementation of market intervention measures and rural development programmes. They also include the support to the supply of agricultural products for final consumption, agricultural inputs and raw materials for the production of agricultural inputs. NB: "supplies" in the present document means imports and supplies from the mainland that are supported by the SSA.