The Original Intention
Since it’s inception the Common Agricultural Policy (“CAP“) has been beset with criticism.
Originally, the objectives of the CAP were set out in the Treaty of Rome in 1957 then reiterated by the EU. These objectives are set out below.
“1. 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) stabilise markets;
(d) assure the availability of supplies;
(e) ensure that supplies reach consumers at reasonable prices.”
In 2013 an attempt was made to reinvigorate the CAP. Thus the objectives were revised as follows:-
Objective 1: Viable food production
- contribute to farm incomes and limit farm income variability
- improve the competitiveness of the agricultural sector and to enhance its value share in the food chain
- compensate for production difficulties in areas with specific natural constraints because such regions are at increased risk of land abandonment
Objective 2: Sustainable management of natural resources and climate action
- to guarantee sustainable production practices and secure the enhanced provision of environmental public goods
- to foster green growth through innovation
- to pursue climate change mitigation and adaptation actions
Objective 3: Balanced territorial development
- to support rural employment and maintaining the social fabric of rural areas
- to improve the rural economy and promote diversification
- to allow for structural diversity in the farming systems, improve the conditions for small farmers and develop local markets
As part of the EU wide strategy, the intention was for the EU to retain some degree of self sufficiency with respect to food production particularly in the context of climate change.
The UK view
Historically, the UK has always had a tension with the CAP.
In the UK view, supporting agriculture through subsidy made it less competitive and thus was a disincentive for efficiency. The UK felt that competitiveness should be within the objectives to encourage efficiency and increase yields and thus production.
The UK’s review of the 2013 CAP led to the following alternative objectives.
- Primarily the CAP should be to maintain or enhance the EU’s capacity to produce safe and high-quality food.
- The second objective should be to enhance competitiveness and viability of the agricultural sector. The CAP should be the key to producing more while having less impact on the environment. Thus reducing farmers’ reliance on income support from the tax-payer in the long-term.
- The third objective of the CAP should be to ensure the sustainable management of the EU’s natural resources, biodiversity and landscapes, recognising that farmers are the managers of over half of the EU’s land area.
- The fourth objective of the CAP should be to help to maintain agricultural activity in areas where it delivers significant public benefits, such as the maintenance of biodiversity and cultural landscapes. However, the CAP should not aim to deliver an acceptable standard of living to every farmer in the EU through income support alone—farmers should be encouraged to look to the market for returns.
- The fifth objective of the CAP should be to foster diversity in EU agriculture, where this is valued by EU citizens, but not enforce it.
The CAP Debate
The UK is not alone in its criticim of the CAP. The attached link contains some wider criticisms of the CAP
With Brexit now approaching, the days of the UK participation in the CAP seem numbered. Unfortunately, there does not apprear to be an alternative plan in plan in place at this stage. The UK government has committed to maintaining the farm subsidy until the next election which is 2022 however as is indicated above the arguments are more about structural reform of how Agriculture is supported rather than the quantum of that support.
Exmoor Ambition is one attempt to plot a way forward in a post Brexit Britain by devolving agricultural decisions to the regions (see http://www.romulus-advisory.co.uk/exmoor-ambition-taking-opportunities-post-brexit/ ).