The Common Agricultural Policy (CAP) is a European Union policy dedicated to agriculture and rural development. It was implemented 1962 and was the first budgetary item of the EU. At that time, it aimed at developing agricultural production to feed the European people after the end of the Second World War, a goal it quickly achieved. However, the steady increase of European production has led to perverse overproduction now.
Since inception, the CAP has been reformed multiple times, including a major one in 1992. One key change was in intervention strategy, aligning the CAP to the rules of the World Trade Organisation. The last reform took place in 2014 and the reform negotiation process is in full swing for the next CAP cycle which begins in 2021.
Today the CAP accounts for about 40% of the EU’s budget. It remains the EU’s most integrated policy, i.e. the one with the most decisions made at EU level.
The CAP is divided in three approaches, each having different goals and operating schemes:
- The first pillar amounts to 70% of the CAP’s budget. It grants direct aids to farmers. These mean a basic income based on the amount of land used. There is no link to how the land is used and what is produced. — The second pillar is concerned with agri-environmental measures and rural development. It is financed in part by the EU and also by Member States, under what is called co-financing. This part of the CAP provides financial support to new farmers as well as to farmers facing a competitive disadvantage due to their geographical position or their production methods. It also supports the farm’s evolution towards greater competitiveness or environmental-friendly practices.
- The common market determines how the EU may intervene on markets for agricultural products in cases of crisis. It also serves as safeguard to imports and exports of agricultural products.
As it is today, the CAP encourages practices of intensive agriculture, cutthroat competition on international markets and corresponding farm expansion. This is instead of providing European citizens with healthy food, supporting rural communities, improving the desirability of the farming profession. The CAP does not encourage environmental and biodiversity protection, improved animal welfare, climate change mitigation or the protection of famers in the Global South
Nonetheless a common agricultural policy remains crucial. First, European farmers need support to face the severe competition of non-European products, imported from places with sometimes lower production standards and costs.
Secondly, farming not only produces our food, but many other public goods on which we rely (such as reducing the dependency upon imports, preserving the landscape, creating dynamic rural areas, maintaining a diversity of culinary traditions and fighting against land use change which threatens soil quality). These services are not reflected in the very low selling price of produce.
Thirdly, a common policy can strengthen a collective voice in light of the need to defend European interests against major global exporting powers and agribusinesses, cultivating food sovereignty, protecting the environment mitigating climate change and restoring of biodiversity.
The CAP thus needs a major, in-depth reform to win back its legitimacy as a public budget. It must become a policy at the service of all farmers, but also of all Europeans. To get there, blind financial support, uncoupled to good farming practice must be abandoned, and room made for a ‘public money for public goods’ approach. The post-2020 CAP needs more coherent governance, greater transparency, and be easily understood by farmers and citizens alike.