Wednesday 26 March 2008

EU TFEU: Common organisation of agricultural markets

The common agricultural policy of the European Community (European Union) progresses slowly towards an EU wide internal market in agricultural products instead of national markets, but it basically excludes the rest of the world from the benefits of free trade.

This post offers a look at the regulatory and budgetary ‘tools’ of the CAP in the light of the Lisbon Treaty, and it gives a few hints on further reading.


In the Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) does not specifically mention Article 34 of the Treaty establishing the European Community (TEC) among the amendments (see OJ 17.12.2007 C 306/53).

The Treaty is renamed the Treaty on the Functioning of the European Union (TFEU). We indicate the new framework, look out for horizontal amendments (replacing ‘Community’ by ‘Union’) and take the coming renumbering into account concerning the provision and its referrals (Tables of equivalences, OJ 17.12.2007 C 306/207). This is how the provision should look according to the Lisbon Treaty, based on the latest consolidated version of the TEC (OJ 29.12.2006 C 321 E/54-55):

Part Three Policies and internal actions of the Union

Title II (renumbered Title III) Agriculture and fisheries

Article 34 TFEU (ToL), renumbered Article 40 TFEU

1. In order to attain the objectives set out in Article 33 [ToL, renumbered Article 39 TFEU] a common organisation of agricultural markets shall be established.

This organisation shall take one of the following forms, depending on the product concerned:

(a) common rules on competition;

(b) compulsory coordination of the various national market organisations;

(c) a European market organisation.

2. The common organisation established in accordance with paragraph 1 may include all measures required to attain the objectives set out in Article 33 [ToL, renumbered Article 39 TFEU], in particular regulation of prices, aids for the production and marketing of the various products, storage and carryover arrangements and common machinery for stabilising imports or exports.

The common organisation shall be limited to pursuit of the objectives set out in Article 33 [ToL, renumbered Article 39 TFEU] and shall exclude any discrimination between producers or consumers within the Union.

Any common price policy shall be based on common criteria and uniform methods of calculation.

3. In order to enable the common organisation referred to in paragraph 1 to attain its objectives, one or more agricultural guidance and guarantee funds may be set up.


The European Convention numbered the provision Article III-124 of the draft Treaty establishing a Constitution for Europe. The word ‘Union’ was introduced to take the place of ‘Community’ and the Article referred to was numbered differently, but otherwise not a word was changed (OJ 18.7.2003 C 169/51-52).

The IGC 2004 took over the provision as Article III-228 of the Treaty establishing a Constitution for Europe without changing the wording (OJ 16.12.2004 C 319/100-101).


The ‘toolbox’ offered by the provision on common market organisations allows deep cuts in the normal principles of market economy. Here is the description given by the Europa Glossary:

“The common market organisations (CMOs) represent the first pillar of the common agricultural policy (CAP). They are the fundamental market regulation tool governing the production of and trade in agricultural products in all the Member States of the European Union by:
eliminating obstacles to intra-Community trade in agricultural products;
maintaining a common customs barrier with respect to third countries.
Since the reform of the CAP in 2003, most CMOs have been subject to the new system of a single farm payment and decoupling. The Member States which joined the Union on 1 May 2004 participate directly in the new system. Changes have also been made to crisis management arrangements and environmental classification of farms.” See:

The Commission’s Scadplus web pages with summaries of legislation offer the basics on ‘Common organisation of the agricultural markets: introduction’, although the page was last updated 27 September 2004. See:

A starting point for more up to date information, including latest news, is found on the Commission’s web pages ‘Agriculture and Rural development’:

Without outsiders’ views the common agricultural policy (CAP) would be left to government and farming interest insiders. First, a reminder of the sources mentioned in yesterday’s article:

Those who want to understand the present common agricultural policy and its future can turn to the UK House of Lords European Union Committee’s report ‘The Future of the Common Agricultural Policy’, with Volume I: Report (HL Paper 54-I) and Volume II: Evidence (HL Paper 54-II) (7th Report of Session 2007-08, published 6 March 2008):

France is known for its addiction to the CAP. The French think tank Notre Europe runs projects which aim at budget reform and CAP reform post 2013. Among a plethora of policy papers there is a fresh one by Eulalia Rubio ‘EUBudget Review: Addressing the Thorny Issues’, published 7 March 2008. The CAP 2013 project is preparing proposals. A presentation including links to preparatory work is offered in English on the following web page (although the French page has been updated later):

Second, I would like to mention three high quality blogs shedding light on the CAP:

CAP Health Check, with Jack Thurston as coordinator and various contributors, describes itself as “Towards better European farming, food and rural policies”:

Wyn Grant comments on the Common Agricultural Policy blog:

Jack Thurston manages dedicated to transparency, with the motto ‘Who gets what from the Common Agricultural Policy’:

Economics, weight in the EU budget, consumer interests, taxpayers, the (developing) world outside the European Union’s customs and quota borders – Clausewitz would have found the CAP too important to be left in the care of vested interests.

Ralf Grahn


  1. but it basically excludes the rest of the world from the benefits of free trade.

    As EU Citizens we should be absolutley disgusted with the way that our new masters destroy fishing and farming communities. EG In Guinea-Bissau and Senegal the EU fishing fleet has scoured the ocean's floor for fish leaving none for the local population, and we wonder why starving africans are making their way north to the EU for a better life. (SE NY Times

    In other parts of Africa, dumping surplus EU food has destroyed the living of local farmers who cannot compete and who therefore give up their farms becoming subsidy dependent.

    The EU is a protectionist regime that talks much of helping Africa but in practice is destroying the livelihoods of many in the continent. Once again EU theory and practice are miles and kilometres apart.

    We should hang our heads in shame every time we support this destroying regime especially the highly destructive CAP.

  2. Alfred,

    My short (and fairly sweeping) statement was meant as a short reminder of the fact that we Europeans should try to understand the effects of our policies.

    You rightly bring some of the effects of the CAP to light, namely fishing agreements and export subsidies.

    Although my series deals mainly with the changing and immovable parts of the Lisbon Treaty, I willingly admit that there are many dimensions worth serious discussion:

    Policy areas such as trade (Doha), agriculture (market access more than tariffs) and fishing and development.

    Different countries (territories) with more or less priviliged positions (members, overseas territories with special regimes, ACP countries, rank outsiders). Thus, trade is distorted between different developing countries, too, in relation to EU markets.

    Sadly the WTO Doha development round has been treading water for a considerable time.

  3. As always, a thoroughly considered response, thank you.

    My hope is always that we will wake up to the huge gap between Treaty theory and actual practice and the CAP and fisheries policy areas bring that gap into close focus, IMO.

    This is probably the wrong blog to raise concerns about the way the Commission works in real life compared to the way people expect it to work in accordance with Treaty provisions. I've seen so many livelihoods destroyed by the Commission 'one size fits all' directives that were probably issued in good faith, but drafted by unelected pressure groups, to realise that this centralised method of government just does not and will not work. Unlike you, as I understand it, I feel that this centralised government is beyond reform which will lead to its collapse under which we will all suffer greatly.

  4. Alfred,

    Thank you for your kind response.

    To put it plainly, I do think that the citizens of the EU stand to gain potentially from the added security and prosperity joining forces can bring.

    In other words, I subscribe to the idea of Europe.

    On the other hand, there are profound problems which have to be addressed.

    First, pooling a rag-tag band of countries and populations is bound to lead to less than perfect solutions in many cases. I may, for instance, think that my own country works better in many instances (although outside pressures may in some cases lead to better solutions than national oddities of today).

    Second, since decisions have moved upstairs as a consequence of globalisation, democracy should follow, in my opinion. Therefore, I think that the EU needs further treaty reform, in order to function on a truly democratic basis, including the questions now reserved for intergovernmental policy making (CFSP, CSDP and all the special legislative procedures) and executive powers only partly accountable to the directly elected European Parliament.

    (And the EP itself has shown that it has much to learn in the way of transparency and accountability towards its electors.)

    Third, I want to do my tiny bit to close the gap between noble treaty aspirations and actual practices of the EU institutions.

    By signing politically and to some extent legally binding treaty principles, the European leaders have offered us measuring rods to apply to their actual deeds.

    Continued public scrutiny is needed, but it offers no quick fix.

  5. I also "think that the citizens of the EU stand to gain potentially from the added security and prosperity joining forces can bring." and "I subscribe to the idea of Europe." I just want this to be done through intergovernmental agreements, like NATO, Interpol, EFTA etc, that allow states to retain their sovereignty and legislate according to their own culture and needs.

    The recent history of the EU shows that policy making is carried out through undemocratic almost unaccountable EU institutions such as the Commission that are under the undue policy influence of undemocratic EU funded pressure groups and industry groups. The electorate is all but out of the loop. This is not democracy. The EP has little influence or effect and the Council seems to be easily manipulated.

    You are doing more than your "tiny bit to close the gap between noble treaty aspirations and actual practices of the EU institutions." Do keep up the good work.

  6. Alfred,

    I enjoy discussing with you although I am a bit more pessimistic about the potential of intergovernmental cooperation based on sovereignty and 'liberum veto', with the UN Security Council a case in point. In addition, transparency and intergovernmentalism seem to be almost mutually exclusive.

    27 or whatever number of shards of an urn do not make a whole vessel. That is the other problem with adhering to national democracies in a (partly) supranational context.

    I see more hope (though a hard slog) to upgrade democracy, not downgrade decision making.

    But many of your observations about present imperfections strike me as sadly accurate.

  7. And I enjoy discussions with you, although I do not have the legal grasp that you have, being just a very interested observer and sufferer of EU legislation.

    Having had several discussions lately with MEP candidates I am encouraged by their grasp of the problems and am almost swayed by their optimism that the EU structure can be changed to become democratic. I hope that both you and they are proved to be right, as if you are all wrong, pain is inevitable for all.

    Yes, intergovernmentalism is very far from perfect, ask Monnet and Salter, but does allow sovereign people to feel part of sovereign state decision making and thus part of the democratic process, however faulty that is. Centralised and remote decision making from a different cultural perspective distances and alienates the electorate (IMO) and history relates the inevitable, when that happens.

    May your optimism prove to be more accurate than my pessimism.

  8. Alfred,

    I am not that sure about 'optimism' and 'pessimism'. Could my approach be more aptly described as a 'Victorian' sense of duty to contribute to improving things that need critical evaluation from the outside?

    But what really intrigued me are your references to personal experiences. Is there any forum (blog) and form in which you could discuss these matters in a concrete and detailed way?

  9. But what really intrigued me are your references to personal experiences.

    They are not that interesting to others. Before going self employed in 1998, I was involved in implementing EU Work Place directives in a UK government department. The UK gov had decided that they must be the first to implement such things. The directives were unworkable in our particular environment and most unwelcome by the work force. The end result was that we paid lip service to the regulations as they had to be imposed. That was my first exposure.

    In my early life I worked in fishery protection in a very vibrant UK fishing industry so I have watched its destruction and UK government complicity with increasing despair.

    More recently many of my customers have been UK farmers. I have watched almost all of them do the following:

    *Commit suicide
    *Give up and pack shelves for local supermarkets or work for local councils
    *sell the land and convert their homes to bed and breakfast
    *continue farming getting into increasing debt and bankruptcy
    *continue farming eating up a family inherited fortune.

    I can think of only two customers still in farming

    I stopped the main part of my own business because of EU employment legislation and WEEE directives, not that they were all bad, but that I couldn't implement them.

    I have watched other small businesses be destroyed by both EU regulations and the UK's over zealous implementation of those regulations eg waste disposal

    I have been to the EU parliament and seen it in action, or rather seen it in futility as some MEPs are honest enough to say.

    I have not been a Eurocrat or directly employed in EU organisations so have nothing useful to blog about in those areas.

    That's my experience, in a anutshell.

  10. Alfred,

    Thank you for sharing your experiences. At least some of them seem to have a bearing on the amount of detail in EC legislation, something causing a lot of hard feelings all around Europe.

    Instead of intrusiveness my view of the potential of the European Union builds on effectiveness in a few key areas, such as external and internal security, trade and a working internal market, more or less as described by Hamilton in the Federalist Papers.

  11. ... external, ...internal security, trade and a working internal market

    This begs one very important question. Is all this worth surrendering sovereignty to an unelected, undemocratic, unaccountable, centralised over-controlling organisation, or can these aspirations be achieved through other means.

    Thank God Hamilton didn't get his way and we ended up with a nation where the rights of the individual were more important than the good of the whole. Concentrating on the good of the whole leads to cultures that see nothing wrong with ethnic cleansing etc! I'm not suggesting that the EU would descend to such horrors, but it is a slow slippery slope, as history has shown.

  12. Alfred,

    If we try to envisage what the world is going to look like in a decade or two, I imagine that the EU could be the most benign 'empire' of them all.

    There are more dimensions to potential horror than one.


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