The Common Agricultural Policy
The Common Agricultural Policy is often widely debated across Europe. This is understandable as a significant portion of the EU budget is distributed under this policy. This policy is far reaching and covers areas such as rural development, climate change, preservation of natural landscapes and of course the obvious areas of farming and food production. As such it had a huge impact on our society. It is typical to hear opposition to the level of spending that occurs under this policy, and while opponents often offer alternative uses for this funding, what is less typical is to hear an explanation as to what this policy aims to do, and what we as European Citizens get out this deal.
“a critical portion of the food supply which is required to feed Europeans is met within Europe”
Initially set-up in 1962, CAP was aimed at helping Europe, unable to meet its food demand, to guarantee a stable and sustainable supply of food at affordable prices for its citizens. It also aimed to ensure as decent standard of living for farmers and food producers as without this its first aim could never be acheived. One of the primary aims of the Common Agricultural Policy is food security. Guaranteed internal prices for produce and a guaranteed income for European farmers, have both contributed to building food security for the region. The direct payments to farmers (one of the two “pillars” of CAP), who produce the food, ensures that a critical portion of the food supply which is required to feed Europeans is met within Europe. While some would contest that this food supply could be sourced from outside the EU at lower prices, this would leave citizen in a precarious position as the supply could never be guaranteed, it would be exposed to greater cost uncertainty and it would be outside the direct control of the EU. The EU would in turn struggle to regulate standards or quality. This would be a worrying situation to be in, especially when we see how quickly obstacles to trade can be erected on the world stage as has occurred recently. A secure supply of food from within the EU ensures that food supply cannot be politicised in trade disputes. As climate change impacts on crop harvesting yields, it is now even more important to protect locally produced food. The UN estimates that global food demand in 2050 will be 70% greater than in 2007**. This will put huge pressure on producers throughout the world. As we work towards ensuring food security in the long-term, CAP can provide the means for producing affordable and quality food.
“Producers must produce food well in advance of the need for their products, and as such require a stable demand in order to make their operations viable”
Farming is like no other industry and as such requires an untypical approach to supporting its development and its continued existence. Producers must produce food well in advance of the need for their products, and as such require a stable demand in order to make their operations viable. This is complicated by an almost complete dependence on weather to grow cereal crops or fodder for animals. Extreme weather events can have detrimental effects on farms and in severe case can sometimes wipr out an entire year’s income. CAP payments, including garmented prices for their produce, have provided stability for farmers to ensure their enterprises are viable in the medium to long term. It has fostered expansion in the agricultural sector, with the certainty of CAP payments opening new streams of credit to farmers which has allowed them to expand their enterprise as well as creating new and innovative technologies and machinery that have helped the practice of farming advance. Left to the mercy of the markets, farmers and food producers would be dangerously susceptible to external forces, such as currency shocks, which could make their products extremely uncompetitive overnight. This would likely drive many farmers out of business over time. Producers would also be unable invest in new technologies to improve productivity, quality, food safety or even make any larger investments in their operations, as the uncertain nature of food production would make borrowing credit almost impossible without these assistance payments. This would result in inevitable decline in the industry.
“This approach allows smaller producers to remain competitive with lager producers thereby ensuring that they are not able to become too dominant over time in the market place.”
One of the payments made through this policy “The Basic Farm Payment” also helps to ensure that smaller farmers can produce food at cheap and competitive prices for the consumer. If left completely to market forces, it is likely that a move towards factory farming would develop. Where this has happened elsewhere in the world, animal husbandry standards have significantly declined leading to cruel treatment of animals. Disease then becomes a significant issue, quickly followed by wide spread use of antibiotics. This has already played a negative role in the increase of bacteria developing antibiotic resistance.
In Ireland, the effect of CAP has been to preserve thousands of small and medium sized farms across the country. This approach allows smaller producers to remain competitive with lager producers thereby ensuring that they are not able to become too dominant over time in the market place. This situation would, in the long term, result in populations becoming dependant on fewer food producers. Without CAP payments the market would push smaller producers to compete with larger enterprises. Quality would eventually decline in order to achieve cost savings and competitive prices on the shelves. Smaller producers, who are not producing niche or speciality products, would eventually become non-viable and be forced out of business or acquired by lager operations. This would negatively narrow the market. One of the reasons that the current EU supply is secure is because this does not occur. A wide and diverse pool of producers is created by the current CAP system which protects smaller producers and in turn protects EU consumers.
“The high quality of food produced in the EU should be acknowledged,”
As this policy helps to keep the cost of producing food down, a number of knock-on effects are seen. Firstly, and most obviously, EU citizens get to access food cheaper. Some people would argue that some food is too cheap to produce which can lead to food wastage and even overproduction. It is difficult to argue with this point as in some cases this does occur and this is an area where improvements can be made; however cheap food disproportionally benefits those who have less money to spend on food and as such helps to reduce food poverty. It also ensures that EU farmers are better able to compete against imports from external economies whom through factors such as low wages, lower standards, less regulation or less environmentally sound practices, can produce food cheaper but often of lower quality. The high quality of food produced in the EU should be acknowledged, and this can be seen in the significant demand for EU produced food abroad with €137.2 billion of food exports from the EU recorded in 2017*. These exports are typically entering other markets as Canada, the US and China as high quality products and frequently generate a premium price because of this. Without the certainty created by the Common Agricultural Policy most EU producers would be forced to compete with low cost food sources and this would inevitable cause a decline in quality and the export market we currently enjoy would likely be lost, at great cost to the EU.
“CAP is a huge source of investment for rural communities”
In Ireland, as is typical in many other EU member states, CAP goes beyond food production. It supports 300,000 jobs both directly and indirectly. Many of these jobs are in rural areas which are often poorer regions, where there are limited other job opportunities. CAP is a huge source of investment for rural communities in Ireland and has helped to ensure their survival during tough economic years and has helped foster economic growth outside urban areas. This is replicated right across the EU. This concept of Rural Development forms the second “Pillar” of CAP. Where money is invested in agricultural both directly and indirectly, a much wider economic and social impact is experienced ensuring a balanced development of rural areas.
“Of the new Post 2020 Common Agricultural Policy objectives, one third relate to environmental and climate change issues.”
This policy also covers a wide range of ecological and environmental issue that are often ignored and is a key driver of climate change mitigation efforts. Of the new Post 2020 Common Agricultural Policy objectives, one third relate to environmental and climate change issues. 30% of the Rural Development budget under the new policy is also to be set aside for “activities of most direct value for the environment and climate.”*** CAP recognises the unique role that agriculture plays in the sustainable use of our natural landscapes. Protection of natural habitats for wild animals, birds and areas of ecological importance is required of recipients of payments under this policy. While the purpose of CAP has evolved from that which begun in its original form in 1962, there are further opportunities to use CAP in a more productive way to help reduce our carbon emissions. Progress has already been made in this area, “greenhouse gas (GHG) emissions from the EU farm sector fell by 21% between 1990 and 2014”***, but much more needs to be done. We cannot avoid the fact that agriculture is a leading contributor to our greenhouse gas emissions, accounting for 12% of total EU greenhouse gases in 2015. As agriculture is nature based, it is one of the sectors most prone to climate change. The effects of this were very evident in Ireland during 2018, when farmers had to deal with a prolonged period of housing of animals, because of a longer than typical winter, followed by an unprecedented summer drought. This caused a critical water shortage and low growth rates for crops, leading to a reduction in summer grass and grain yields. This type of situation will become more common across the continent in the future and without a co-ordinated EU level policy to face such issue head on, we are unlikely to have anywhere near the impact we need to have
“CAPs multinational approach to protection of habitats, sustainable agricultural practices and climate change mitigation efforts protects the European environment and has ensured that European food production is amongst the most sustainable in the world”
The Common Agricultural Policy had played a big part in the development of the European Union. It facilitates member states with the flexibility to address their specific countries needs while ensuring that common European objectives are being met. Without the Common Agricultural Policy, member states would be open to create their own agricultural support systems, which would be extremely difficult to navigate and would ultimately undermine the basic principles of the common market. This approach along with the inadequate results it delivered was the reason for the creation of the original common policy in the first place. CAP has provided a level of protection and access to the market for smaller food producers and countries, which in turn ensures that Europe is building a diverse and secure supply of low cost, quality food which will sustain it’s population into the future. As with all European policies there are areas within CAP that could be improved, such as increased supports for the next generation of food producers to secure the supply of food into the future. Despite such criticism, it is hard to dispute the benefits and certainties it has provided to EU Citizens since its inception. The policy has had a much wider impact than its primary goal of supplying food. CAPs multinational approach to protection of habitats, sustainable agricultural practices and climate change mitigation efforts protects the European environment and has ensured that European food production is amongst the most sustainable in the world. The stability it has created has undoubtedly contributed to the development of the EU. These significant achievements along with the huge amount of exports it has helped to generate, ensures that every European Citizen continues to benefit from its existence and reinforces the Common Agricultural Policy as one we as Europeans should be proud of.
Peter Caulfield and Tom Cahill are both active members within the liberal youth organization Ógra Fianna Fáil in Ireland. Peter Caulfield (29) is the International Officer of the organization and an architect in Dublin. Tom Cahill (23) is the Policy Officer of the organization and a student teacher in Galway.