SUBJECTS

COMMON AGRICULTURAL POLICY

Specific Objectives and Competences
- To know how the EU supports its food producers.
- To understand the principles and objectives of the CAP.
- To understand how public policies that support the agricultural sector affect international trade
Contents
- The Common Agricultural Policy is one of the most expensive and controversial EU policies.
- It was initially established with the aim of increasing agricultural production and thereby ensuring food security within the European Economic Community (EEC) during the Cold War period. Its objectives have since changed and it is now used to try to protect agriculture by controlling prices and levels of production and subsidising rural life in order to safeguard the countryside.
- The CAP seeks to protect European agricultural products from cheaper imports from outside the EU.
- At first, aid was given based on agricultural production. Now, the importation of agricultural products from outside the EU is discouraged by a system of import tariffs combined with subsidies for European producers through the Single Farm Payment. In cases of overproduction, the EU intervenes and subsidises exports.
- The present total cost of the CAP is about 40% of the whole EU budget, although in 1985 it reached as much as 72%.
- The main objectives of the CAP are:
  - This policy has also be seen as an unfair way of protecting European agriculture from international competition when, in reality, agricultural activity contributes relatively little to the GDP of the EU.
  - To ensure a stable supply of healthy and affordable food products for the population of the EU.
  - To provide a reasonable standard of living for EU farmers and allow the modernisation and development of the food industry.
  - To ensure that all of the different regions of the EU can maintain their agricultural sectors.
- This policy has varied since its initial introduction in 1962 and there have been various attempts to reform the CAP during this period. The results, however, have been rather limited in terms of reducing its cost.
- The key elements of the latest reform of the CAP could be summarised as follows:
  - A single aid payment for all farmers in the EU, independent of their level of production. Part of this will remain associated with production in order to discourage farmers from stopping production;
  - conditioning the receipt of support on farmers complying with a series of regulations relating to: the protection of the natural environment; the quality and safety of their produce, animals and vegetables; and animal welfare, with the additional condition of them having to maintain their agricultural land in good agronomic and environmental condition;
  - a reinforced rural development policy, which implies: greater EU funding; new measures to promote environmental protection; guarantees regarding animal quality and welfare; and measures to help farmers to meet EU guidelines regarding production from 2005 onwards;
  - a reduction in the direct aid (“modulation”) given to the largest exploitations in order to finance new measures aimed at promoting rural development;
  - a mechanism to promote greater financial discipline and guarantee that the agricultural budget established for the period up to 2013 will not be exceeded.
- This aid system has been heavily criticised by the World Trade Organisation (WTO) because of the way it distorts the international food market and, at the same time, blocks access to the European market for agricultural products from less developed countries. According to the type of aid received, the WTO classifies these actions using a system of different coloured boxes(fr, es, en):
  - Green box: permitted.
  - Amber box: prohibited.
  - Blue box: to be reduced.

Debates

Based on the map showing the distribution of rural and urban areas, the table showing the percentage of workers employed in agriculture and the file explaining the evolution of the CAP budget in relation to that of the EU as a whole, debate the following questions

Is it fair that 5% of the EU’s workers benefit from 40% of its budget?

What is the social utility of the CAP?