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Agriculture - Fisheries - Food

1. Common Agricultural Policy (CAP)


  • Future of farming in the enlarged EU
  • Energy crops an important sector
  • GMOs and food safety
  • Fighting fraudulent claims for production subsidies
  • Review of CAP coming up

The EU’s agricultural policy dates back to 1957, when the creators of the Treaty of Rome defined the general objectives of a common agricultural policy, post-war food shortages still fresh in minds. The principles and mechanisms of the Common Agricultural Policy (CAP) were adopted by the six founding members of the European Economic Community, and in 1962 CAP came into force.

CAP was designed to secure Europe’s self-sufficiency in food production. The basic principles of CAP remained the same for decades: guaranteed prices for agricultural products, often above world price levels, and subsidies based on the quantity of production, with little concern for the problem of surplus production.

CAP has been the most fully integrated of EU policies. In the 1970’s, nearly 70% of the EU budget went into agriculture. After a series of reforms, agriculture expenditures in the budget have dropped to 35 % for the 2007-2013 financial period. Over the same period, more money (9.7%) has been allocated for rural development and the expansion of EU’s other responsibilities.

The first wave of CAP reforms had decreased over-production, brought down butter mountains and emptied the milk lakes. But by 2002, several factors made it a necessity to undertake major review of the EU’s farm policy, including several food crises, the EU's planned eastward expansion, World Trade Organization’s objections to the CAP and the sustainable development strategy defined during the Gothenburg Summit. In 2003, Franz Fischler, then the Commissioner for Agriculture, Fisheries and Rural Development, presented a CAP reform package he described as the most radical improvement to the EU’s agricultural policy ever. His main proposals included:

  • decoupling of subsidies and production
  • high requirements of environmental, food safety and animal welfare standards as prerequisite for getting subsidies
  • more money to rural development as opposed to direct and market subsidies
  • cuts in intervention prices in many sectors

After heated debate, farm ministers agreed to go through with the CAP reform. Although, the link between farm subsidies and the amount of production was not totally abolished, as originally proposed, a major shift did take place, with the bulk of farmers’ income now coming from direct aid, based on the size of their holdings and not production.

The reform also prepared the EU for the WTO ‘Doha’ round of international trade liberalization talks, where the EU offered to eliminate export subsidies altogether by 2013. The talks were put on hold in 2006. Whatever the result of the trade talks, the EU remains the world’s largest importer of food, especially from developing countries.

A number of sensitive sectors were left out of the 2003 CAP reform, including sugar, wine, bananas and other fruits and vegetables. Since then, a profound reform of the sugar sector was agreed on in 2005. In 2006 and early 2007 the Commission also proposed reforms for the wine, banana and fruit and vegetables sectors.

Under the Barroso Commission, Mariann Fischer Boel took over stewardship of the renamed Agriculture and Rural Development DG. She continues to strive for higher food quality and safety, efficient application of the Rural Development Policy 2007-2013, energy crop schemes and simplification of the CAP and cutting of red tape.

The enlargement of the EU from 15 to 27 members has brought new challenges to CAP – the number of farmers in the EU increased by over 70%.

Meanwhile, farming organisations have welcomed the EU’s decision to set a minimum 10% target for the use of biofuels for transport by 2020. The EU has also created the possibility for agriculture to play a bigger role in the fight against climate change, according to the COPA organisation.

CAP Health Check

A key aim of the 2008 French EU Presidency was to bring the CAP up to speed with new global challenges. To this end, with the backing of the Commission and a vast majority of member states, four texts were adopted in November 2008, focusing on rural development, direct aid to farmers, and regulation mechanisms for the single market (dairy quotas, interventions, etc.).

These agreements officially launched the EU debate on the future of the CAP post-2013, also taking stock of global food balances, competitiveness, sustainable development, and the economic dynamism of rural areas.

The Czech Presidency of the EU, in the first semester 2009, failed to secure an agreement on the future of the CAP post-2013. However, the Agriculture Council did agree unanimous conclusions on agricultural product quality and the retargeting of aid in Less Favoured Areas (LFA).

The quality policy paves the way to clearer labelling and, it is hoped, better communication and understanding among farmers, wholesalers and consumers. The Council also said it would consider national and private food certificates that follow Commission good practice guidelines and pledged to cut red tape for farmers and producers who want to apply for EU schemes like the organic label and geographical indications.

The LFA programme is designed to improve the “targeting of aid to farmers in areas with natural handicaps”. Member states have been asked to produce maps by 31 January 2010, including specific details on climate, soil, and terrain.

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