Agriculture affects us all
On 12 October 2011, the European Commission presented its proposals for the Common Agricultural Policy (CAP) of the European Union for the years 2014–2020. This represents a further step towards reform of what is so far the only fully common policy area of the EU.
Agricultural policy is – according to the prevalent opinion – a matter for specialists. Nothing could be further from the truth. The conditions under which the food we find on our plates is produced is not only a question for the farmers or the politicians, it is a social question. It is ultimately directed at all of us: Are we prepared to pay an honest price for healthy, sustainable and future-oriented production of food, for renewable energy sources and the maintenance of distinctive cultivated landscapes?
All of this will not fit onto one A4 page. So today we start with a look back at the CAP and what has happened so far.
After the EEC was set up in 1957, the CAP, which came into force in 1962, was systematically developed and expanded. The idea behind the ‘price support policy’ in the first 30 years of the CAP (up to 1993) was the experience of hunger and food shortages in the years immediately following the Second World War: Europe was no longer in a position to feed its citizens itself. A modern community policy should guarantee Europe’s ability to provide for its own food needs in the future. The (financial) incentives offered were not without consequences: very quickly, security of food supply was assured – and not only that: the CAP overshot its target, and intervention purchasing gave rise to butter mountains, wine lakes and frozen carcasses as an undesired side-effect.
A series of successive reforms attempted to stem these excesses and reorient the CAP. The price support policy gave way first to ‘product premiums’ (up until 2004), which were then replaced by production-independent (‘uncoupled’) operating premiums. These are tied to the maintenance of other obligations (‘cross-compliance’) – such as sustainability, animal protection and environmentally sound operations. With some exceptions (milk and sugar), the premiums on agricultural products were abolished. Since then, the CAP has been based on two pillars: direct payments for the production of food and the maintenance of agricultural land (currently approximately 70% of the CAP budget) and support of rural areas and rural development (approximately 20%). The remaining 10% is mainly used for export refunds.
The reform of the CAP in 2003 (‘Agenda 2000’) was needed because of the round of expansion in 2004. With an unchanged CAP, the addition of many small farmers from the new Member States would have made the CAP impossible to finance. It was therefore decided to level off the direct payments to these farmers to about 40% of the payments in the Member States and only allow it to rise slowly. This was also intended to prevent possible social rejection (as a response to disproportionately high income growth among farmers in comparison with other professional groups). This inequality between farmers in the old and new Member States is increasingly being perceived as unfair, and the reform is designed to balance this out.
At present, the CAP at €53 billion per year accounts for about 40% of the EU budget in the years 2007–2013. The share of agriculture in the total budget has clearly fallen: from 71% in 1984 to about 36% with the CAP Reform 2014+; a reduction of about 50%. This should also counter the criticism that the EU is primarily supporting the less future-oriented agricultural sector.
The European Commission has allowed for a total of four years for preparation for the CAP Reform 2014–2020. Besides the complexity of the matter and the often divergent interests of stakeholders, this is also due to the fact that, with the entry into force of the Treaty of Lisbon, the European Parliament is participating in the decision-making for the first time: previously, the views of the Parliament on the subject of the CAP were only heard, but now the MEPs also vote on CAP reform.
In April 2010, the Commission therefore launched a public debate concerning the future of the CAP, which led to a large hearing of representatives of all interested parties in July 2010. The results of this were incorporated in the Communication from the Commission, which was presented in November 2010. In the debate on the subsequent follow-up report of the European Parliament (the ‘Dess Report’), it was clear how far apart are the positions– more than 1,200 applications were made for amendments to the report, which was accepted on 21 June 2011.
Translated from the original German
In order to do justice to the scope of this subject, this article will be spread over three issues of europeinfos.