Why Europe deserves a better farm policy By Jack Thurston ★ The EU’s common agricultural policy (CAP) remains an emblem of inefficiency and inequality,
despite substantial past reform. It distorts the EU single market; it fails to increase the efficiency of European farming; and it principally benefits the biggest farms in the richest EU countries.
★ Powerful farm lobbies are likely to prevent a radical overhaul of the CAP in the near future.
However, the debate about CAP reform will return with renewed vigour in 2008, when the Commission reviews it.
★ When it comes, CAP reform should include moving payments from trade-distorting subsidies
towards supporting national and regional strategies for food policy, rural economic development and conservation.
The prospects for radical CAP re f o rm look bleak. At the time of writing (December 2005) neither the a rguments over the EU budget nor pre s s u re from major farm exporters at the world trade negotiations look likely to force the EU to re f o rm. The resistance to change is too strong. The French-led coalition of countries defending the status quo is more united than the group that favours re f o rm. In theory, EU ministers decide on agricultural issues by qualified majority voting. In practice, however, EU ministers are reluctant to put any country in a minority and consensus is the general rule. This makes it relatively easy for vested interests to block decisions. The farming lobby is better organised and more effective than the loose coalition of consumer groups, Greens and development NGOs which seeks to challenge the CAP. However, as the battle over the CAP turns into a proxy for a deeper debate about Europe’s future, the pressure for change will continue to grow. The battlelines are being drawn for a major confrontation in 2008, when the European Commission next reviews the CAP. In the forthcoming review, all three aspects of the CAP will be in the spotlight: the CAP’s system of artificially fixed prices could face pressure from tariff reductions agreed in the framework of the
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World Trade Organisation (WTO); the overall size of farm payments will have to shrink if the EU countries are to agree on future EU budgets; and pressure groups will continue to push the EU to place greater emphasis on environmental protection and ru r a l development in the CAP. In order to win the argument, the British government and other advocates of reform will need to show that they want to improve rather than abolish the CAP. It is a sad reality that agriculture ministers meeting in Brussels are more focused on how much money their country receives than on the CAP as an effective policy. Reformers must work within that re a l i t y. There are currently eight EU 1 Net CAP balances are countries that receive more calculated by deducting each from the CAP than they pay country’s CAP receipts from into it.1 At the top of the list is its CAP contribution, assumed to amount to 45 per cent of its Spain (with a net positive total payments to the EU balance of S2.5 billion), budget (the CAP represents 45 France (S2.1 billion), Greece per cent of the EU budget). (S2 billion) and Ireland (S1 . 3 billion). At the other end of the spectrum, the CAP’s biggest paymasters are Germany (net negative balance
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