Further reforms ahead for farming

The EU’s Common Agricultural Policy (CAP) has had just about three years to digest the last round of reforms agreed in 2003. Though billed as a straightforward mid-term review by the then farm commissioner Franz Fischler, the subsequent proposals produced the most far-reaching reforms since Irish commissioner Ray MacSharry in 1999 tried to get CAP spending and overproduction back under control.

The key element of the 2003 reforms, a shift to decoupling where payments to farmers are less directly linked to the amount of grain they grow or animals they rear, has revolutionary potential even if the shift to decoupled payments is only partial at present.

At the time, the reform was feared by farmers’ organisations. They worried that greater transparency over the amount of public funds being transferred to the agricultural sector could prompt a debate about whether the payments were justified. This was a debate they were bound to lose given the increasing demands on public funds and a lack of sympathy for the plight of farmers, especially with growing public concern about the effect of the agricultural policies of the EU and other wealthy nations on developing countries. That debate, while gathering momentum, is not yet in full swing.

But in the meantime there has been a gradual and partial shift away from price support to a more general form of guaranteed income which reduces incentives to overproduction. Defenders of Europe’s farming sector argued at the time that the shift would benefit the agriculture sector provided farmers could be shown to be meeting the public’s increasing demands for high quality food products, environmental protection and preservation of Europe’s rural fabric. This survey will examine to what extent those commitments are being met or whether the new form of support was simply a way of maintaining an increasingly unjustifiable share of

public spending.

In the next two or three years, the farm sector faces another attack as EU governments start to decide the level of support for the years after 2013. Some member states, including the UK, have made it clear they want farm support cut back as far as possible while the change in France’s budget position from being a net beneficiary to a net contributor may convert the next French president to favouring national co-financing of the money that farmers receive.

Mariann Fischer Boel, the farm commissioner, says that the last reforms have worked well and should be continued and deepened.

She warns that co-financing can make reform more, not less difficult. This survey looks at whether the current EU agricultural policy is economically, politically or environmentally sustainable.

The EU’s Common Agricultural Policy (CAP) has had just about three years to digest the last round of reforms agreed in 2003. Though billed as a straightforward mid-term review by the then farm commissioner Franz Fischler, the subsequent proposals produced the most far-reaching reforms since Irish commissioner Ray MacSharry in 1999 tried to get CAP spending and overproduction back under control.