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Add a comment“The patient is not sick” said Mariann Fischer Boel, Danish EU Commissioner for Agriculture and Rural Development, on several occasions in 2007, when referring to the Commission’s Communication on the Common Agricultural Policy (CAP). For the Commission the CAP only required a “Health Check”, even though, according to some critics, this patient was in need of a number of life-saving operations.
In the 2007-2013 financial framework, the CAP still occupies almost half of the community budget. This is mainly due to the fact that agriculture is the only substantial redistributive policy at community level.,The percentage of the EU budget spent on the CAP constitutes a considerable amount of money considering that less than 5% of the EU’s population is actively working in agriculture. Following the same line of criticism, the CAP is even more problematic when considering that in the EU-27, 80% of the agricultural subventions are targeted to only 20% of all beneficiaries. In France, for instance, the largest 1 percent of farms received more subsidies than the smallest 40 percent of farms combined. In Spain 12.700 small farms received subventions equivalent to the subventions payed out to the seven largest farms.
- When being big is good
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In France the largest farms, comprising 1 percent of all farms, received more subsidies than the smallest 40 percent of farms combined.
Furthermore, traditionally, the CAP’s highest subventions not only go to the more affluent farmers, but also to the produces that are cultivated in the richer member states of the EU. This is the case for beef, sheep, sugar, milk, wheat and rye. Throughout the last two decades, these facts have caused considerable concerns as to whether Europe’s agricultural policy is not only well nourished, but might even suffer from obesity. The patient might not be fundamentally sick, but it seems to have been so well fed that it has created a series of problems for the European Union. For instance the CAP threatened the 2004-enlargement process. Furthermore, it caused major food safety and environmental problems, and the CAP also became increasingly contested in international trade negotiations.
Fischer Boel’s health check
It is beyond any doubt that the CAP needs to keep an eye on its weight in order to fit into the community project. This is probably what Fischer Boel has in mind when speaking of a “health check”. Numerous medical visits and a number of serious operations throughout the last two decades have already made the policy a well known patient on the EU’s agenda. Most prominently, the stepwise reform from 1992 over 1999 to 2003 has led to a new policy structure and reviewed policy objectives.
Concerning its structure, the CAP was divided into a first pillar for market and direct support payments and a second pillar for rural development payments. Concerning its general objectives, the policy was trimmed towards a stronger focus on quality instead of quantity production, towards increased market liberalisation and new issues such as environmental protection, animal health, food safety and rural development.
According to Fischer Boel, the upcoming health check is only meant to be yet another medical visit, which there is no need to worry about. It is just to verify that everything is fine. The Commission’s Communication “Preparing for the ‘Health Check’ of the CAP reform” from November 2007, has to be seen in this context. In the communication the Commission drew up three main questions that needed to be addressed by the health check.
- What Fischer Boel thinks
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According to Fischer Boel, the upcoming health check is only meant to be yet another medical visit, which there is no need to worry about.
Three questions to the CAP
First, how to make the single payment scheme more simple and effective. The Commission proposed further cuts for bigger farmers as well as for very small units that are farmed on a sideline basis. The single payment scheme is a system of direct subventions based on historical receipts that has been introduced in recent reforms in order to decouple support from production. These direct subventions are only payed out upon cross-compliance with a set of production criteria on environmental protection, food safety and animal wealth. According to the communication the historical receipts of the single payment scheme should now be replaced by a “flat rate” system and the cross-compliance criteria should be reviewed.
Second, how to further adapt traditional market support to the new market conditions in which the CAP exists. The Commission proposed to fade out payments for set-aside payments and to speed up the abolishment of milk quota, which at present is set to kick in by 2015. Additionally, subventions should be further shifted from the traditional market support of the first pillar to the rural development measures of the second pillar of.
Third, how and to what extent can new challenges such as climate change, water management, bio energy and biodiversity be integrated into the second pillar of the EU’s agricultural policy. EU agriculture is at the same time highly exposed to the consequences of climate change as well as a main contributor to the emission of greenhouse gasses. The Commission proposed to address these challenges by strengthening the existing rural development measures of the CAP’s second pillar and by integrating these challenges into the cross-compliance standards.
More than fine-tuning
“The Commission does not see the CAP health check as a new reform”, said Fischer Boel when presenting the health check in November 2007. At the same time the health check had to be more than a simple “fine-tuning” of the 2003 reform. Even though the health check neither was to discuss changes in the overall funding of the current 2009-2013 financial perspective, nor address the next financial perspective. the health check would unavoidably address some necessary adjustments and simplifications for the 2009 review of the financial perspectives after 2013.
The six-month consultation period that was initiated with the health check communication in November 2007, therefore opened up the discussion on the future priorities of Europe’s agricultural policy. Should the CAP continue to shift towards a policy of rural development and see itself integrating the new challenges of rural development policy related to environment, biodiversity and energy? Or should it rather focus on improving on the long-criticised ambition to provide an appropriate framework for Europe’s food production and agricultural community?
- Whereto?
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Should the CAP continue to shift towards a policy of rural development and see itself integrating the new challenges of rural development policy related to environment, biodiversity and energy?
With the consultation completed in May the Commission released a legislative proposal. As the Parliament continues without any real decision power on the CAP, at least as long as the Reform Treaty has not been ratified, it will be up to the Council to prescribe for a fitness programme for the CAP, which will make it a more manageable task than had the Parliament been involved. However, the health check should present the main points of a more critical examination to be carried out when outlining the next financial framework in 2009. In the next article we will take a look at what the Commission actually proposed on 20 May 2008. Stay tuned.
Go to the second part : Why the CAP’s health check proposal will not embrace a new policy reform
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Sarà la solita visita medica?
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