CAP reform camp

The vast majority of EU citizens, the consumers and taxpayers, have few friends among the member states’ governments. The UK House of Commons Environment, Food and Rural Affairs Committee spoke of a well-established core group of reform-minded countries (UK, Denmark, Netherlands and Sweden). The Committee welcomes the accord signed with Italy on the future of the Common Agricultural Policy (CAP). Not much to go on in a European Union of 27 member states.

Still, democracy should be about valid reasons and informed debate leading to accountable policies for acceptable results.

Some of the conclusions of the Committee bear repeating, because they challenge the governments in the anti-reformist camp to think through their stance and improve their justifications and, ultimately, their positions:

“Further reform of the CAP is both necessary and inevitable.”

“The only long-term justification for future expenditure of taxpayers’ money in the agricultural sector is for the provision of public goods. Payments should represent the most efficient means by which society can purchase the public goods – environmental, rural, social – it wishes to enjoy. For these payments to remain publicly acceptable, it is essential that they relate directly to the public goods provided and that, in turn, these public goods are measurable and capable of evaluation.”

“The objectives of the CAP have remained unchanged for the last 50 years and now seem dated. European agricultural policy has moved on since then, encompassing issues such as rural development, protection of the environment and animal welfare. The UK Government should begin negotiating, at the earliest opportunity, for a redrafting of the existing Article which lays out the objectives of the CAP – Article 33(1) – with the new text reflecting the wider context of modern rural policy.”

“Some of the key issues the UK Government must address in devising and pursuing such a rural policy for the EU should include:

· The prioritisation of objectives (for example, between environmental and rural development considerations)
· The degree of subsidiarity embodied in the new policy
· The relative advantages and disadvantages of financing such a policy – at least to some extent (i.e. co-financing) – at the Member State level
· How much of the current expenditure on the CAP would be required to fulfil the policy objectives chosen
· How best to manage the transition from the current CAP to this new ‘Rural Policy for the EU’
· The extent to which this new rural policy can contribute to the mitigation of, and adaptation to, climate change”

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The Reform Treaty or Lisbon Treaty is going to be as unreformed, and anachronistic, as ever concerning the objectives of the Common Agricultural Policy (although fisheries are added under the same heading). The earliest opportunity seems to be in a distant future.

For an outsider the Committee made a puzzling choice in leaving out consumers’ interests from its discussion altogether and relating to taxpayers mostly indirectly, as the logically necessary payers for and receivers of the public goods mentioned. If the interests of the voters as a whole do not concern the governments of the status quo group inordinately, they could be seen as potential allies and beneficiaries of the pro reform camp’s agenda.

Since the Commission Green Paper for the CAP review 2008 promises to be little more than a health check without serious diagnosis or treatment, the importance of the overall budget review 2008/9 grows.

The December 2005 European Council and, formally, the inter-institutional agreement in May 2006 invited the Commission to undertake “a full, wide-ranging review covering all aspects of EU spending, including the Common Agricultural Policy, and of resources, including the United Kingdom rebate, and to report in 2008/9”.

This promise might have been a joke for Jacques Chirac, but it is extremely important for the citizens of Europe.


Ralf Grahn


Sources:

House of Commons, Environment, Food and Rural Affairs Committee: The UK Government’s “Vision for the Common Agricultural Policy”; Published on 23 May 2007

Interinstitutional agreement between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management; Official Journal 14.6.2006, C 139/1

CAP basics

The Common Agricultural Policy (CAP) is still the biggest area of expenditure in the EU budget. The basic principles of the CAP were written 50 years ago into the Rome Treaty establishing the then EEC. In half a century the world has changed a lot, but not the structure of the CAP.

In 1957 the war was still a living memory, and food scarcity a concern. Today obesity is a greater problem in Europe.

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According to article 33 of the Treaty Establishing the European Community, the objectives of the common agricultural policy shall be:

(a) to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;
(b) thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
(c) to stabilise markets;
(d) to assure the availability of supplies;
(e) to ensure that supplies reach consumers at reasonable prices.

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The living standards of farmers outweigh the interests of consumers and tax payers.

The Commission runs the CAP along the lines drawn up by the Member States (the Council). The Council makes regulations, directives and decisions; the European Parliament is only consulted.

The European Parliament can only present wishes concerning the agricultural budget, since these expenses are seen as mandatory. (The Reform Treaty or Lisbon Treaty would extend the powers of the EP by abolishing the difference between mandatory and non-compulsory spending.)

The Commission is soon going to present its views on the CAP review 2008, commonly called the health check.

Leaked information does not promise any radical policy shift. This has implications for the expectations that the 2008/9 review of the whole EU budget could lead to major improvements.

Despite much talk about CAP reform, the 2002 agreement between Jacques Chirac of France and Gerhard Schröder of Germany, later included in the present financial perspective (long term budget), guarantees CAP spending until the end of 2013.

France has been keen enough to defend the present CAP to forego the possibilities offered to European industry and services by a WTO agreement during the Doha development round.

Finland is an interesting case. On the one hand Finnish political leaders stress the opportunities offered by globalisation and the need to enhance European competitiveness by implementing Lisbon strategy reforms. On the other hand they have repeatedly sided with France to shield agriculture from reform and competition pressures.


Ralf Grahn