Reforming the EU's Agricultural Policy

“The Common Agricultural Policy is regarded by some as one of the EU’s most successful policies, and by others as a scandalous waste of money.”

BBC Q&A about the EU’s CAP

 

The Common Agricultural Policy (CAP) is the EU policy aiming to ensure a fair standard of living for farmers and to provide a stable and safe food supply at affordable prices for consumer in Europe.

At its beginning, some 50 years ago, the CAP aimed to boost agricultural production in post-war Europe, which it did very spectacularly, resulting in the infamous “butter mountain” and “milk lake” surpluses. Even now, nearly half of all EU funds  – some €43 billion –  is spent in the agricultural field, making the CAP by far the most policy area of the European project.

The budget for the CAP is decided every year by the Council of Ministers and the European Parliament.  Spending is concentrated on direct payments for farmers who meet the EU’s environmental, animal health and food safety and quality standards. Around 20% of the CAP budget is spent on rural development, to help farmers modernise their farms and become more competitive while protecting the environment and their rural communities.

Critics argue that the CAP costs too much and benefits relatively few people. Only 5% of EU citizens work in agriculture, and the sector generates just 1.6% of EU GDP. And importantly, 20% of European farmers receive 80% of the support.

“The largest per capita beneficiaries from the CAP are Greece and Ireland. While they are big recipients of CAP funds, in 2006 agriculture accounted for just 3.1% of GDP in Greece and 0.9% in Ireland.” (BBC)

Farmers associations have criticised the CAP for not eradicating price fluctuations, and Development NGOs criticise the CAP for distorting the world food market in favour of farmers in the rich EU and undermining the development prospects of poor countries.

Reforming the CAP

As the European Union member states are gearing up for a debate on the future financing of the EU, they are simultaneously preparing to tackle the thorny question of reforming the Agricultural Policy, to be concluded by 2013. (See the Commission’s Communication on the issue)

European Development NGOs, through the CONCORD network, argue that the EC proposals for the future CAP regime are characterised by a complete lack of focus on the CAP’s impact on the world’s poorest, despite the obligation under the Lisbon Treaty to ensure that developing countries’ interests must not be harmed by EU internal decision making.

The NGOs argue that:

• The CAP reform is the ultimate test of the EU’s willingness to translate the principle of “Policy Coherence for Development” and its obligations under the Lisbon Treaty into practice;
• the CAP must ‘do no harm’ to other countries’ food and agriculture systems, by preventing subsidised European exports which potentially undermine local and regional production in the developing world.

For more detail, see this CONCORD document. 

And the Development NGOs concerns are being heard: on 25 May, the Agricultural Committee of the European Parliament voted on its report on the CAP reform, adopting several key amendments supported by CONCORD.

In particular, the Committee:

(Para. 63) “Calls for the EU to ensure consistency between the CAP and its development and trade policies; in particular urges the EU to be attentive to the situation in developing countries and not jeopardize food production capacity and long term food security in these countries and the ability of those populations to feed themselves, while respecting the principle of Policy Coherence for Development (PCD); therefore EU trade agreements on agriculture should not hamper markets in the least developed countries”;

(para. 66) “Notes that food is not merely a commodity but access to food is fundamental to human existence; calls on the EU through its trade and development policies to promote sustainable farming practices and food security in LDCs and developing countries in a context of increasing demand and increasing food prices”;

(para. 68) “Calls for global-level solutions to be formulated to tackle abuses of speculation in agricultural commodities and extreme price volatility as they potentially put food security at risk; (…)”

On 23 June, the European Parliament’s plenary adopted its negotiation position for  the CAP reform, stating its overall budget should not be reduced, but that the CAP must turn Europe’s agriculture into a more sustainable industry. 

The European Commission will publish its Impact Assessment report on the CAP reform in October this year. Importantly, this report will include in annex a study on the impacts of the CAP on selected developing countries.

 

Watch this space!

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See also:

• EU Commission Work Programme on Policy Coherence, 2010-2013
• Dóchas blog posts on Policy Coherence for Development