Common Agricultural Policy

Purpose:

improving farmers living stnds.

reduce overproduction

subsidies and quotas

While proportion of CAP spending has been decreasing, it is still the single largest area of spending in the EU

EU Cash Outlays 2006

Source: BBC

2006 CAP = 43 percent of the budget

1984 CAP = 70 percent of the budget

Source: Institute For Agriculture and Trade Policy. The Common Agricultural Policy: A Brief Introduction. Prepared for the Global Dialogue Meeting (May 14 and 15, 2007, Washington, D.C.).

1950s

Europe still suffered food shortages; had to import food

1962

Introduction of the CAP

Community solidarity, EEC support

Subsidies (i.e. price supports)

Quotas (with guaranteed prices)

1968

Based on the Mansholt Plan (named for Agriculture Commissioner Sicco Mansholt)

encouraged retirement of older farmers

sought to increase farm size, efficiency

and reduce amount of land under production

unpopular; scaled back.

1980s

CAP so successful, that by 1980s reform needed to reduce overproduction

Read about

Hard to do

Why?

Read about

Farm Groups Powerful

Farmers Protest

Protecting European Culture, Rural Way of Life

Reuters: Read about

Recent Reforms

1992

MacSharry Reforms (for EU Commissioner for Agriculture Ray MacSharry)

Reduced levels of support by 29% for cereals and 15% for beef

“Set-aside” payments to withdraw land from production

Payments to limit stocking levels

Encourage retirement

Forestation

***Shift to Direct Payments to Farmers

(guaratee income without encouraging overproduction)

2003 Reform

“decoupling” output and income

'Cross-compliance' conditions:

environmental

food safety

animal welfare standards

2007

Story

Impact of 2004 and 2007 Enlargements

Former Eastern Bloc Countries

A much larger percentage of the population is employed in agriculture

Often in dire need of modernization/mechanization

Life on E Europe’s farms: very old school

Romanian farmer transporting his wares

In sum, the Eastern Enlargements added >7 mln more farmers to EUs workforce: total 17.9 mln employed in agriculture

Eastern bloc farmers received only 25% of direct payments received in the EU-15 in 2004

To be increased to full amount by 2013

During the 2004-2013 period, the amount paid to EU-15 farmers will decrease 5%

EU wide

16.6 mln of these

i.e., 93% of Europe’s farm workers

are the land holders and their family members

Thus, in Europe, Family farms are a reality

See p. 42 in EU Report

The Future of Farming?:

Eco-Tourism

Find Farm Stays in Europe

1^st World Farm Supports and the Developing World

UNDP estimates that the EU spends $913 per cow per year

While EU aid to sub-Saharan Africa = $8 per person! (source)