Lecture Common Agriculture Policy

The Common Agricultural Policy (CAP)

12 May 2014Jeroen Candel, Wageningen University

A small quiz (1)

How much does the EU spend on the CAP?

A) 20% of its budget (27,5 billion euro per year)

B) 40% of its budget (55 billion euro per year)

C) 60% of its budget (82,5 billion euro per year)

A small quiz (2)

Who’s the EU commissioner for agriculture and rural development?

A) Dacian Ciolos

B) Mariann Fischer Boel

C) José Graziano da Silva

A small quiz (3)

Which country gets the largest share out of the CAP budget?

A) France

B) Germany

C) Poland

How it all started• Treaty of Rome (1957)• Wish of France to include

agricultural products in common market

• CAP mechanisms in effect from 1962

• Objectives: – Productivity & self-sufficiency– Standard of living farmers &

fair prices consumers– Stabilise agricultural markets

Mansholt plan

• Structural reform EU agriculture

• Noted limits price support• Reduce land under

cultivation, scale increase• But: resistance too strong

70s and 80s: crisis

CAP big success, too big..:

Costs

High prices for consumers

Environment

Overproduction: milk lakes and butter mountains

Pressure trade partners

1984: Milk quota, but insufficient: increasing pressure

Reforms

1992 MacSharry Reform: direct income support

Agenda 2000: rural development (second pillar)

2003 Fischler Reform: decoupling, cross-compliance, mulftifunctionality

2008 Health Check: phasing out milk quotas

2013 Ciolos Reform

How to explain CAP’s policy development?

Lynggaard & Nedergaard (2009):• Stability by looking at reform rounds: short-

term interests• Change by looking at periods in between:

changing societal concerns and values

Societal concerns and values

• 60s-80s: food security, farmer incomes, disadvantaged areas

• 80s-90s: overproduction, environment, developing countries

• 2000s: food safety, environment, quality, diversity, food security

Time for celebration: 50 years of CAP

But also new challenges: food price crisis

Increased public engagement

Societal & Political concerns:

1. Size of the total budget

2. Distribution of the budget

3. Requirements for farmers

4. External effects

First time that EP had

co-decision powers in

CAP reform

What were the hot potatoes in the recent negotiations? It’s not food security

Size budget

Greening measures

Pillar I vs Pillar II

7500 amendments European Parliament

How to make rules that are both flexible and strict?

Inter-institutional agreement September 2013

•Convergence payments between member states•Payments on basis hectares•Greening Payment (30%): permanent grassland, crop diversification, ecological focus areas, or equivalent measures•15% of budget pillar can be transferred•End sugar quota in 2015•Member states have a lot of discretionary powers in implementation

Thank you for your attention!

More info:[email protected]: @JeroenWUR