New challenges for the EU Common Agricultural Policy
The CAP is the EU's oldest – and still financially the most significant – policy. Since 1962, agricultural policy has been within the remit of the European Union (at that time still called the EEC). At the same time, there are only a few areas in EU policy which have undergone as many major changes as the CAP in terms of challenges, tasks and importance.
The figures give the clearest picture of the situation. While in 1984 over 70% of the total EU budget was allocated to the CAP, by 2013 this allocation had already fallen below 40% of the budget. For 2014-2020, €408.3 billion have been budgeted for agricultural policy, i.e. approximately €58.7 billion per year. Agricultural trade accounts for 7% of the EU's overall trading volume and in 2015 generated a trade surplus of €9 billion (i.e. €123 billion in exports and €114 billion in imports). In Europe 22 million people are working in 11 million agribusinesses, while 44 million jobs depend indirectly on farming.
In the years of food rationing after World War II, the original purpose of the CAP was to ensure security of food supply and also to increase productivity in food production so that all Europeans could have access to enough food. Years of food shortages were followed by years of surpluses, with the proverbial ‘meat mountains’ and ‘milk lakes’ resulting from increased productivity, technological efficiency and product subsidy measures. These surpluses were reduced by restructuring the subsidy measures and stimulating exports.
Today, farmers are facing different challenges. Damage to the environment, especially air and groundwater pollution, caused by over-cultivation and excessive use of fertilizers, has led to a U-turn in opinion. Farming must now be more environmentally aware. Anybody who wants to continue farming today must comply with – and handle the restrictions of – a long list of (fully justified) requirements such as soil and water protection, conservation of biodiversity, animal welfare and humane treatment of animals, and preventing greenhouse gas emissions in order to achieve climate protection targets. This is why many farmers are deciding to give up their farms which are no longer profitable, even as a sideline business activity.
Farmers often justifiably see themselves as victims. They have to produce foodstuffs that are sufficiently affordable while preserving a liveable environment for future generations. They seriously doubt whether society is prepared to pay the right price for this. They receive direct payments to offset the costs of environmental protection measures, but their core business, which is the production of farm products, is under tremendous price pressure.
The food industry is putting pressure on purchase prices, which sometimes threaten to drop below the level of production costs, while at the same time it is trying to lure customers with unrealistically low prices, for example of meat. Customers demand high-quality products but are not ready to pay the right prices for them. Over the past 50 years, the average household budget spend on food has fallen from 33% to 11%. About 30% of the foodstuffs produced do not end up on the table but, for various reasons, are thrown away unused. This waste is unsustainable in the long run.
Thanks to its "Consultation on modernising and simplifying the common agricultural policy CAP)", scheduled to run until 2 May 2017, the European Commission is trying to address the new agricultural challenges, which include coping with the rising insecurity in agricultural markets; protecting sensitive agricultural areas in the context of new trade agreements, yet without placing excessive limits on possibilities for export; and reaching climate protection goals.
At first sight, this list of challenges clearly reveals the complexity of the topic. On the one hand, we should distance ourselves from the "agricultural romanticism" which idealises small-scale businesses. On the other hand, we must prevent the future of agriculture in Europe from being carried out on an industrial scale only.
In this debate it is often forgotten that, in addition to the rational (and understandable) issues of food safety, supply security and the desire for affordable foodstuffs, farming still remains a way of life. Farming is practised by people for the people, not only deploying technical know-how and based on rational considerations, but also with a great deal of passion and idealism. This aspect of agriculture must also be taken into consideration in future.
Translated from the original text in German