NationMaster - Encyclopedia: Common Agricultural Policy

The Common Agricultural Policy (CAP) is a system of European Union agricultural subsidies and programmes. It represents about 44% of the EU's budget (€43 billion scheduled spending for 2005^[1]). Elections in the European Union gives information on election and election results in the European Union. ... Elections to the European Parliament were held from June 10, 2004 to June 13, 2004 in the 25 member states of the European Union, using varying election days according to local custom. ... In early 2007, Bulgaria and Romania will elect their members of the European Parliament for the first time. ... Elections to the European Parliament will be held in June 2006 in the thenâ€“27 member states of the European Union, using varying election days according to local custom. ... European Parliament electoral system is proportional representation. ... The European political party, or formally political party at European level, is a type of political party organization in the European Union, eligible to receive funding from the Union. ... // Origins of the EU History of the European Union European Coal and Steel Community (ECSC) Euratom Single market. ... Austria Poland Belgium Bulgaria Cyprus Czech Rep. ... The European Union (EU) was created by six founding states in 1957 (following the earlier establishment by the same six states of the European Coal and Steel Community in 1952) and has grown to 27 member states. ... Foreign relations of the European Union Foreign relations of Austria Foreign relations of Belgium Foreign relations of Cyprus Foreign relations of the Czech Republic Foreign relations of Denmark Foreign relations of Estonia Foreign relations of Finland Foreign relations of France Foreign relations of Germany Foreign relations of Greece Foreign relations... The Law of the European Union is the unique legal system which operates alongside the laws of Member States of the European Union (EU). ... For the concept in general, see economic and monetary union. ... There are currently five institutions of the European Union which govern the Union. ... The agencies of the European Union (or decentralised bodies of the European Union) are bodies which are distinct from the European Unions institutions, in that they have not been created by the treaties but rather by acts of secondary legislation, in order to accomplish a very specific task. ... Information on politics by country is available for every country, including both de jure and de facto independent states, inhabited dependent territories, as well as areas of special sovereignty. ... Image File history File links Question_book-3. ... An agricultural subsidy is a governmental subsidy paid to farmers to supplement their income, help manage the supply of agricultural commodities, and bolster the market price of commodities. ... The European Union (EU) has an independent parliament and civil service which is distinct from those of the 27 member states. ... Year 2005 (MMV) was a common year starting on Saturday (link displays full calendar) of the Gregorian calendar. ...

The CAP combines a direct subsidy payment for crops and cultivated land with price support mechanisms, including guaranteed minimum prices, import tariffs and quotas on certain goods from outside the EU. Reforms of the system are currently underway reducing import controls and transferring subsidy to land stewardship rather than specific crop production (phased from 2005 to 2012). Detailed implementation of the scheme varies in different member countries of the EU, but a Single Payment Scheme for direct farm payments is being introduced in the UK. Direct payments are now made: In economics, incomes policies are wage and price controls used to fight inflation. ... The Single Payment System (or Single Farm Payment) is a grant scheme introduced in 2005/2006 by the EU to replace the existing Headage/Premia Schemes (Special Beef/Suckler Cow/Ewe Premium/Area Aid etc. ... The United Kingdom of Great Britain and Northern Ireland is a country in western Europe, and member of the Commonwealth of Nations, the G8, the European Union, and NATO. Usually known simply as the United Kingdom, the UK, or (inaccurately) as Great Britain or Britain, the UK has four constituent...

Until 1992 the agriculture expenditure of the European Union represented nearly 61% of the EU's budget. By 2013, the share of traditional CAP spending will have almost halved (32%), following a decrease in real terms in the current financing period. In contrast, the amounts for the EU's Regional Policy represented 17% of the EU budget in 1988. They will more than double to reach almost 36% in 2013.^[3]

The aim of the common agricultural policy (CAP) is to provide farmers with a reasonable standard of living, consumers with quality food at fair prices and to preserve rural heritage. The policy has evolved to meet society’s changing needs, so that food safety, preservation of the environment, value for money and agriculture as a source of crops to convert to fuel have acquired steadily growing importance.

Overview of the CAP

The creation of a common agricultural policy was proposed in 1960 by the European Commission. It followed the signing of the Treaty of Rome in 1957, which established the Common Market. The six member states individually strongly intervened in their agricultural sectors, in particular with regard to what was produced, maintaining prices for goods and how farming was organised. This intervention posed an obstacle to free trade in goods while the rules continued to differ from state to state, since freedom of trade would interfere with the intervention policies. Some Member States, in particular France, and all farming professional organisations wanted to maintain strong state intervention in agriculture. This could therefore only be achieved if policies were harmonised and transferred to the European Community level. By 1962, three major principles had been established to guide the CAP: market unity, community preference and financial solidarity. Since then, the CAP has been a central element in the European institutional system. Berlaymont, the Commissions seat The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union. ... The Treaty of Rome signing ceremony Signatures in the Treaty The Treaty of Rome, signed by France, West Germany, Italy and Benelux (Belgium, the Netherlands and Luxembourg) on March 25, 1957, established the European Economic Community (EEC). ... The European Community (EC), most important of three European Communities, was originally founded on March 25, 1957 by the signing of the Treaty of Rome under the name of European Economic Community. ...

The CAP is often explained as the result of a political compromise between France and Germany: German industry would have access to the French market; in exchange, Germany would help pay for France's farmers. Germany is still the largest net contributor into the EU budget; however, as of 2005 France is also a net contributor and the poorer and more agriculture-focused Spain, Greece and Portugal are the biggest beneficiaries. Transitional rules apply to the newly admitted member states which limit the subsidies which they currently receive.

Objectives

Sectors covered by the CAP
The common agricultural policy price intervention covers only certain agricultural products:

cereal, rice, potatoes
oilseeds
dried fodder
milk and milk products, wine, honey
beef and veal, poultry meat and eggs, pig meat, sheep / lamb meat and goat meat
sugar
fruit and vegetables
cotton
peas, field beans
sweet lupins
olive oil
seed flax
silkworms
fibre flax
hemp
tobacco
hops
seeds
flowers and live plants
animal feed stuffs

The coverage of products in the loser trade regime is more extensive than the coverage of the CAP regime. This is to limit competition between EU products and alternative external goods (for example, lychee juice could potentially compete with orange juice).^{[citation needed]} Grain redirects here. ... For other uses, see Rice (disambiguation). ... Binomial name Solanum tuberosum L. The potato (Solanum tuberosum) is a perennial plant of the Solanaceae, or nightshade, family, grown for its starchy tuber. ... Seeds which are grown for their oil. ... Fodder growing from barley In agriculture, fodder or animal feed is any foodstuff that is used specifically to feed domesticated livestock, including cattle, goats, sheep, horses, chickens and pigs. ... A glass of cows milk. ... For other uses, see Wine (disambiguation). ... For other uses, see Honey (disambiguation). ... For other uses, see Beef (disambiguation). ... Veal is the meat of young calves (usually male) appreciated for its delicate taste and tender texture. ... Ducks amongst other poultry The Poultry-dealer, after Cesare Vecellio Poultry is the category of domesticated birds kept for meat, eggs, and feathers. ... Chicken egg (left) and quail eggs (right), the types of egg commonly used as food An egg is a body consisting of an ovum surrounded by layers of membranes and an outer casing of some type, which acts to nourish and protect a developing embryo. ... For other uses, see Pork (disambiguation). ... An unweaned lamb Legs of lamb in a supermarket cabinet The terms lamb, hoggett or mutton are culinary names for the meat of a domestic sheep. ... This article is about the domestic species. ... This article is about sugar as food and as an important and widely-traded commodity. ... For other uses, see Fruit (disambiguation). ... Vegetables on a market Vegetable is a nutritional and culinary term denoting any part of a plant that is commonly consumed by humans as food, but is not regarded as a culinary fruit, nut, herb, spice, or grain. ... For other uses, see Cotton (disambiguation). ... Binomial name Pisum sativum A pea (Pisum sativum) is the small, edible round green seed which grows in a pod on a leguminous vine, hence why it is called a legume. ... For other uses of the word see: Lupin (disambiguation) Species over 150 recognised species, including: Lupinus albus Lupinus angustifolius Lupinus arboreus Lupinus luteus Lupinus nootkatensis Lupinus polyphyllus Lupinus x regalis Lupinus texensis Lupin, often spelled lupine in the US, is the common name for members of the genus Lupinus in... For the Popeye character, see Olive Oyl. ... For other uses, see Flax (disambiguation). ... Binomial name Bombyx mori Linnaeus, 1758 For other senses of this word, see silkworm (disambiguation). ... U.S. Marihuana production permit. ... Shredded tobacco leaf for pipe smoking Tobacco can also be pressed into plugs and sliced into flakes Tobacco is an agricultural product processed from the fresh leaves of plants in the genus Nicotiana. ... Hop umbel (branched floral structure resembling nested-inverted umbrellas) in a Hallertau hop yard Hops are a flower used primarily as a flavouring and stability agent in beer, as well as in herbal medicine. ... This writeup is about biological seeds; for other meanings see Seed (disambiguation). ... Wildflowers A flower is the reproductive organ of those plants classified as angiosperms ( flowering plants; Division Magnoliophyta). ...

The initial objectives were set out in Article 39 of the Treaty of Rome: The Treaty of Rome signing ceremony Signatures in the Treaty The Treaty of Rome, signed by France, West Germany, Italy and Benelux (Belgium, the Netherlands and Luxembourg) on March 25, 1957, established the European Economic Community (EEC). ...

The CAP recognised the need to take account of the social structure of agriculture and of the structural and natural disparities between the various agricultural regions and to effect the appropriate adjustments by degrees.

CAP is an integrated system of measures which works by maintaining commodity price levels within the EU and by subsidising production. There are a number of mechanisms:

The change in subsidies is intended to be completed by 2011, but individual governments have some freedom to decide how the new scheme will be introduced. The UK government has decided to run a dual system of subsidies, each year transferring a larger proportion of the total payment to the new scheme. Payments under the old scheme were frozen at their levels averaged over 2002-2003 and reduce each subsequent year. This allows farmers a period where their income is maintained, but which they can use to change farm practices to accord with the new regime. Other governments have chosen to wait, and change the system in one go at the latest possible time. Governments also have limited discretion to continue to direct a small proportion of the total subsidy to support specific crops. Alterations to the qualifying rules meant that many small landowners became eligible to apply for grants and the Rural Payments Agency in the UK received double the previous number of applications (110,000). // The creation of the EUs Common Agricultural Policy was the trigger for the creation of Europes intervention storage. ... Set-Aside in the EU, will be updated as i update my IPM from another editor (i also am doing an ipm and shall add it on here) 1. ... 2011 (MMXI) will be a common year starting on Saturday of the Gregorian calendar. ... The logo of the RPA The Rural Payments Agency (RPA) is an executive agency of the British Department for Environment, Food and Rural Affairs (DEFRA). ...

The CAP also aims to promote legislative harmonisation within the Community. Differing laws in member countries can create problems for anyone seeking to trade between countries. Examples are regulations on permitted preservatives or coloring agents in foods, labelling regulations, use of hormones or other drugs in livestock intended for human consumption and disease control (e.g. during the foot and mouth disease outbreak in the United Kingdom, Ireland and the Netherlands), animal welfare regulations. The process of removing all hidden legislative barriers to trade is still incomplete. This article does not cite any references or sources. ... For other uses, see Hormone (disambiguation). ... Foot-and-mouth disease (FMD), sometimes called hoof-and-mouth disease, is a highly contagious but non-fatal viral disease of cattle and pigs. ... Motto: Je Maintiendrai (Dutch: Ik zal handhaven, English: I Shall Uphold) Anthem: Wilhelmus van Nassouwe Capital Amsterdam1 Largest city Amsterdam Official language(s) Dutch2 Government Parliamentary democracy Constitutional monarchy - Queen Beatrix - Prime minister Jan Peter Balkenende Independence Eighty Years War - Declared July 26, 1581 - Recognised January 30, 1648 (by Spain...

The CAP is funded by the European Agricultural Guidance and Guarantee Fund (EAGGF) of the EU. CAP reform has steadily lowered its share of the EU budget but it still accounts for nearly half EU expenditure. In recent years France has benefited the most from these subsidies. The new accession countries which joined the EU in 2004 have large farm sectors and would have overtaken France as chief beneficiary, but for transitional regulations limiting the subsidies which they receive. The continuing problem of how subsidies for these countries will be paid when they become eligible has already led to French concessions on reform of the CAP. Further concessions will inevitably be necessary to balance the budget. Image File history File links CAPspendingbysector. ... Image File history File links CAPspendingbysector. ... The European Agricultural Guidance and Guarantee Fund (EAGGF), set up by Regulation No 25 of 1962 on the financing of the common agricultural policy (as last amended by Regulation (EEC) No 728/70) consumes a large part of the general budget of the European Union. ... Wikiquote has a collection of quotations by or about: European Union The European Union On-Line Official EU website, europa. ...

History of the CAP

The Common Agricultural Policy was born in the late 1950s and early 1960s when the founding members of the EC had just emerged from over a decade of severe food shortages during and after the Second World War. As part of building a common market, tariffs on agricultural products would have to be removed. However, due to the political clout of farmers, and the sensitivity of the issue, it would take many years before the CAP was fully implemented.

Beginnings of the CAP

The Treaty of Rome defined the general objectives of a common agricultural policy. The principles of the Common Agricultural Policy (CAP) were set out at the Stresa Conference in July 1958. In 1960, the CAP mechanisms were adopted by the six founding Member States and two years later, in 1962, the CAP came into force. The creation of a common agricultural policy was proposed in 1960 by the European Commission. It followed the signing of the Treaty of Rome in 1957, which established the Common Market. The six member states individually strongly intervened in their agricultural sectors, in particular with regard to what was produced, maintaining prices for goods and how farming was organised. This intervention posed an obstacle to free trade in goods while the rules continued to differ from state to state, since freedom of trade would interfere with the intervention policies. Some Member States, in particular France, and all farming professional organisations wanted to maintain strong state intervention in agriculture. This could therefore only be achieved if policies were harmonised and transferred to the European Community level. Berlaymont, the Commissions seat The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union. ... The Treaty of Rome signing ceremony Signatures in the Treaty The Treaty of Rome, signed by France, West Germany, Italy and Benelux (Belgium, the Netherlands and Luxembourg) on March 25, 1957, established the European Economic Community (EEC). ... The European Community (EC), most important of three European Communities, was originally founded on March 25, 1957 by the signing of the Treaty of Rome under the name of European Economic Community. ...

By 1962, three principles had been established to guide the CAP: market unity, community preference and financial solidarity. Since then, the CAP has been a central element in the European institutional system.

Evolution and reform

The CAP has always been a difficult area of EU policy to reform; this is a problem that began in the 1960s and one that continues to the present day, albeit less severely.^{[citation needed]} The Agricultural Council is the main decision-making body for CAP affairs. Above all, however, unanimity is needed for most serious CAP reform votes, resulting in rare and gradual change. Outside Brussels proper, the farming lobby's power has been a factor determining EU agricultural policy since the earliest days of integration.^{[citation needed]} This lobby's power has decreased markedly since the 1980s.^{[citation needed]}

In recent times change has been more forthcoming, due to external trade demands and intrusion in Common Agricultural Policy affairs by other parts of the EU policy framework, such as consumer advocate working groups and the environmental departments of the Union. In addition Euroscepticism in states such as the UK and Denmark is fed in part by the CAP, which is considered detrimental to their economies. Wikipedia does not have an article with this exact name. ... Euroscepticism has become a general term for opposition to the process of European integration. ...

Keeping the CAP intact, though, is an important aim of EU policy. Farming is regarded as "special", a part of Europe's shared heritage encompassing food production and even fine dining. All of these are used as rationales for keeping the CAP strong.^{[citation needed]} It is not simply just another industry, hence its massive presence in the EU psyche (and the EU budget.) Finally, the aim of self-sufficiency and a "shared larder" in Europe, a particularly salient concern in the post-war years, lingers to this day.^{[citation needed]}

Early attempts at reforms

The Mansholt Plan

The Mansholt Plan was a 1960s idea that sought to remove small farmers from the land and to consolidate farming into a larger, more efficient industry. Farming's special status, and above all the extremely powerful farming lobbies across the Continent saw the Plan disappear from the Union's objectives.^{[citation needed]}

On 21 December 1968, Sicco Mansholt (European Commissioner for Agriculture), sent a memorandum to the Council of Ministers concerning agricultural reform in the European Community.^{[citation needed]} This long-term plan, also known as the ‘1980 Agricultural Programme’ or the ‘Report of the Gaichel Group’, named after the village in Luxembourg where it had been prepared, laid the foundations for a new social and structural policy for European agriculture. Sicco Leendert Mansholt (September 13, 1908 - June 29/30, 1995) was the president of the European Commission in 1972. ...

The Mansholt Plan noted the limits to a policy of price and market support. It predicted the imbalance that would occur in certain markets unless the Community undertook to reduce its land under cultivation by at least 5 million hectares. The former Netherlands Minister of Agriculture also noted that the standard of living of farmers had not improved since the implementation of the CAP, despite an increase in production and permanent increases in Community expenditure. He therefore suggested that production methods should be reformed and modernised and that small farms, which were bound to disappear sooner or later, according to Community experts, should be increased in size. The aim of the Plan was to encourage nearly five million farmers to give up farming. That would make it possible to redistribute their land and increase the size of the remaining family farms. Farms were considered viable if they could guarantee for their owners an average annual income comparable to that of all the other workers in the region. In addition to vocational training measures, Mansholt also provided for welfare programmes to cover retraining and early retirement. Finally, he called on the Member States to limit direct aid to unprofitable farms.^{[citation needed]}

Faced with the increasingly angry reaction of the agricultural community, Sicco Mansholt was soon forced to reduce the scope of some of his proposals. Ultimately, the Mansholt Plan was reduced to just three European directives which, in 1972, concerned the modernisation of agricultural holdings, the abandonment of farming and the training of farmers.

Between Mansholt and MacSharry

Hurt by the failure of Mansholt, would-be reformers were mostly absent throughout the 1970s, and reform proposals were few and far between. A system called "Agrimoney" was introduced as part of the fledgling EMU project, but was deemed a failure and did not stimulate further reforms.^{[citation needed]}

The 1980s was the decade that saw the first true reforms of the CAP, foreshadowing further development from 1992 onwards. The influence of the farming bloc declined, and with it, reformers were emboldened. Environmentalists garnered great support in reforming the CAP, but it was financial matters that ultimately tipped the balance: due to huge overproduction the CAP was becoming expensive and wasteful.^{[citation needed]} These factors combined saw the introduction of a quota on dairy production in 1984, and finally, in 1988, a ceiling on EU expenditure to farmers.^{[citation needed]} However, the basis of the CAP remained in place, and not until 1992 did CAP reformers begin to work in earnest.

1992

In 1992, the MacSharry reforms (named after the European Commissioner for Agriculture, Ray MacSharry) were created to limit rising production, while at the same time adjusting to the trend toward a more free agricultural market. The reforms reduced levels of support by 29% for cereals and 15% for beef. They also created 'set-aside' payments to withdraw land from production, payments to limit stocking levels, and introduced measures to encourage retirement and forestation.^{[citation needed]} Berlaymont, the Commissions seat The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union. ... Raymond (Ray) MacSharry (Irish: ; born April 29, 1938) is a former Irish politician. ... Set-Aside in the EU, will be updated as i update my IPM from another editor (i also am doing an ipm and shall add it on here) 1. ... Look up Forestation in Wiktionary, the free dictionary. ...

Since the MacSharry reforms, cereal prices have been closer to the equilibrium level, there is greater transparency in costs of agricultural support and the 'de-coupling' of income support from production support has begun. However, the administrative complexity involved invites fraud, and the associated problems of the CAP are far from being corrected.^{[citation needed]}

It is worth noting that one of the factors behind the 1992 reforms was the need to reach agreemnent with the EU's external trade partners at the Uruguay round of the GATT trade talks with regards to agricultural subsidies.^{[citation needed]} The Uruguay Round was a trade negotiation lasting from September 1986 to April 1994 which transformed the General Agreement on Tariffs and Trade into the World Trade Organization. ... General Agreement on Tariffs and Trade (usually abbreviated GATT) functions as the foundation of the WTO trading system, and remains in force, although the 1995 Agreement contains an updated version of it to replace the original 1947 one. ...

Modern reforms

The current areas that are issues of reform in EU agriculture are: lowering prices, ensuring food safety and quality, and guaranteeing stability of farmers' incomes. Other issues are environmental pollution, animal welfare, and finding alternative income opportunities for farmers. Some of these issues are the responsibility of the member states. Air pollution Pollution is the introduction of pollutants (whether chemical substances, or energy such as noise, heat, or light) into the environment to such a point that its effects become harmful to human health, other living organisms, or the environment. ...

1999

The 'Agenda 2000' reforms divided the CAP into two 'Pillars': production support and rural development. Several rural development measures were introduced including diversification, setting up producer groups and support for young farmers. Agri-environment schemes became compulsory for every Member State (Dinan 2005: 367).^[who?]

European Commission Report (2003)

A 2003 report, commissioned by the European Commission, by a group of experts led by Belgian economist André Sapir stated that the budget structure was a “historical relic”.^[4] The report suggested a rethink of EU policy, redirecting expenditure towards measures intended to increase wealth creation and cohesion of the EU. As a significant proportion of the budget is currently spent on agriculture, and there is little prospect of the budget being increased, this would necessitate reducing CAP expenditure. The report largely concerned itself discussing alternative measures more useful to the EU, rather than discussing the CAP, but it did also suggest that farm aid would be administered more effectively by member countries on an individual basis.

The report's findings were largely ignored. Instead, CAP spending was kept within the remit of the EU - and France led an effort to agree a fixed arrangement for CAP spending that would not be changed until 2012. This was made possible by advance agreement to this approach with Germany. It is this agreement that the UK currently wishes to see re-opened, both in their efforts to defend the UK position on the UK rebate and also given that the UK is in favour of lowering barriers to entry for third world agricultural exporters. ^[5] The UK rebate is a rebate on the United Kingdoms contribution to the EU budget paid back to the UK government by the European Union. ...

Decoupling (2003)

On 26 June 2003, EU farm ministers adopted a fundamental reform of the CAP, based on "decoupling" subsidies from particular crops. (Though Member States may choose to maintain a limited amount of specific subsidy.) The new "single farm payments" are subject to 'cross-compliance' conditions relating to environmental, food safety and animal welfare standards ('cross-compliance'). Many of these were already either good practice recommendations or separate legal requirements regulating farm activities. The aim is to make more money available for environmental, quality or animal welfare programmes. is the 177th day of the year (178th in leap years) in the Gregorian calendar. ... Year 2003 (MMIII) was a common year starting on Wednesday of the Gregorian calendar. ...

Details of the UK scheme were still being decided at its introductory date of May 2005. Details of the scheme in each member country may be varied subject to outlines issued by the EU. In England the single payment scheme provides a single flat rate payment of around £230 per hectare for maintaining land in cultivatable condition. In Scotland payments are based on a historical basis and can vary widely. The new scheme allows for much wider non-production use of land which may still receive the environmental element of the support. Additional payments are available if land is managed in a prescribed environmental manner. The Single Payment System (or Single Farm Payment) is a grant scheme introduced in 2005/2006 by the EU to replace the existing Headage/Premia Schemes (Special Beef/Suckler Cow/Ewe Premium/Area Aid etc. ...

The overall EU and national budgets for subsidy have been capped. This will prevent a situation where the EU is required to spend more on the CAP than it's limited budget has.

The reforms enter into force in 2004-2005. (Member States may apply for a transitional period delaying the reform in their country to 2007 and phasing in reforms up to 2012) ^[6]

EU expansion (2004)

The expansion of the EU in 2004 increased the number of farmers from 7 to 11 million, increased the agricultural land area by 30% and crop production by 10-20%. The 2004 entrants into the EU have immediate access to price support measures (export refunds and intervention buying). However direct payments will be phased in over 10 years (2004-2013), starting at 25% of the rate paid to existing countries in 2004, and 30% for 2005. The 2004 entrants to the EU have access to a rural development fund (for early retirement, environmental issues, poorest areas, technical assistance) with a €5 billion budget. EU states agreed in 2002 that agricultural expenditure up to 2013 should not increase in real terms. This will require a cut in subsidies to the original states of around 5% to finance payments to the new members. With Romania and Bulgaria joining in 2007, the required cut will increase to 8%. The European Union (EU) was created by six founding states in 1957 (following the earlier establishment by the same six states of the European Coal and Steel Community in 1952) and has grown to 27 member states. ...

Sugar regime reform (2005-2006)

One of the crops subsidised by the CAP is sugar produced from sugar beet; the EU is by far the largest sugar beet producer in the world, with annual production at 17 million metric tons. This compares to levels produced by Brazil and India, the two largest producers of sugar from sugar cane.^[7] Two sugar beets - the one on the left has been cultivated to be smoother than the traditional beet, so that it traps less soil. ... A tonne (also called metric ton) is a non-SI unit of mass, accepted for use with SI, defined as: 1 tonne = 103 kg (= 106 g). ... Species Ref: ITIS 42058 as of 2004-05-05 Sugarcane is one of six species of a tall tropical southeast Asian grass (Family Poaceae) having stout fibrous jointed stalks whose sap at one time was the primary source of sugar. ...

Sugar was not included in the 1992 MacSherry reform, or in the 1999 Agenda 2000 decisions; sugar was also subject to a phase-in (to 2009) under the Everything But Arms trade deal giving market access to least developed countries. In 2005 European Union agriculture ministers announced plans to cut the minimum beet price by 39% from 2006, over four years.^[8] Under the Sugar Protocol to the Lome Convention, nineteen ACP countries export sugar to the EU,^[9] and will be affected by price reductions on the EU market. Everything But Arms (EBA) is an initiative of the European Union under which all imports to the EU from the Least Developed Countries are duty free, with the exception of armaments. ... Map of the Least Developed Countries as defined by the United Nations Least Developed Countries (LDCs or Fourth World countries) are countries which according to the United Nations exhibit the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world. ... The Lomé Convention is a treaty that regulated trade between the European Union and 71 (later 77) African, Caribbean and Pacific states (collectively known as the ACP countries) between 1975 and 2000. ... ACP States The ACP States are the countries that are signatories of the LomÃ© Convention. ...

These proposals followed the WTO appellate body largely upholding on 28 April 2005 the initial decision against the EU sugar regime.^[10] For other uses of the initials WTO, see WTO (disambiguation). ... is the 118th day of the year (119th in leap years) in the Gregorian calendar. ...

As of 21 February 2006, the EU has decided on some reforms of sugar subsidies. The guaranteed price of sugar is to be cut by 36%, with European production projected to fall sharply as a result of this. According to the EU, this is the first serious reform of sugar under the CAP for 40 years. ^[11] is the 52nd day of the year in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ...

An aim of this policy change is to allow easier and more profitable access to European markets for emerging economies. Critics, such as "EUPolitix", contend that this is not an altruistic move nor an idealistic shift from the EU, who are instead acting only in accordance with the wishes of the WTO, who supported challenges on sugar dumping by the EU from Australia, Thailand and Brazil. Another point of contention is that those countries who currently receive preferential treatment from EU member states - often due to colonial ties - as part of the ACP group may stand to lose out. ^[12]

Proposed direct subsidy limits (2007)

In the autumn of 2007 the European Commission was reported to be considering a proposal to limit subsidies to individual landowners and factory farms. Wealthy companies and estates who would be affected in the UK include those listed below who are the ten highest in the list of high payouts ^[13]^[14]: Berlaymont, the Commissions seat The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union. ...

Some of these farms and estates, considered large in the UK, are no greater than a typical family farm in the United States, Australia and New Zealand. The family farm is a farm owned and operated by a family. ...

Similar attempts have been unsuccessful in the past and were opposed in the UK by two strong lobbying organizations the Country Land and Business Association and the National Farmers Union. Germany, which has large collective farms still in operation in what was East Germany also vigorously opposed changes which were marketed as "reforms". The proposal will be submitted for consultation with EU member states on November 20.^[15] The Country Land and Business Association (formerly the Country Landowners Association, and still known as the CLA) is a voluntary organisation in the United Kingdom. ... There are several National Farmers Unions National Farmers Union in the United States National Farmers Union in the United Kingdom National Farmers Union in Canada This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... Collective farming regards a system of agricultural organization in which farm laborers are not compensated via wages. ...

Criticism of the CAP

The CAP has been roundly criticised by many diverse interests since its inception. Criticism has been wide-ranging, and even the European Commission has long been persuaded of the numerous defects of the policy. In May of 2007, Sweden became the first EU country to take the position that all EU farm subsidies should be abolished (except those related to environmental protection) ^[16]. Berlaymont, the Commissions seat The European Commission (formally the Commission of the European Communities) is the executive branch of the European Union. ...

Anti-development

Criticism of the CAP has united some supporters of globalisation with the anti-globalisation movement in that it is argued that these subsidies, like those of the USA and other Western states, add to the problem of what is sometimes called Fortress Europe; the West spends high amounts on agricultural subsidies every year, which amounts to unfair competition. The OECD countries' total agricultural subsidies amount to more than the GDP of the whole of Africa. Globalization is a term used to describe the changes in societies and the world economy that are the result of dramatically increased trade and cultural exchange. ... Anti-globalization (anti-globalisation) is a political stance of opposition to the perceived negative aspects of globalization. ... For the song in Need for Speed Underground, see Asian Dub Foundation. ... Occident redirects here. ... The Organisation for Economic Co-operation and Development (OECD), (in French: Organisation de coopÃ©ration et de dÃ©veloppement Ã©conomiques; OCDE) is an international organisation of thirty countries that accept the principles of representative democracy and a free market economy. ... GDP is an acronym which can stand for more than one thing: (in economics) an abbreviation for Gross Domestic Product. ... A world map showing the continent of Africa Africa is the worlds second-largest and second most-populous continent, after Asia. ...

Moreover, it is argued that in creating an oversupply of agricultural products which are then sold in the Third World and simultaneously preventing the Third World from exporting its agricultural goods to the West, the CAP increases Third World poverty by putting Third World farmers out of business. According to the Human Development Report 2003 in 2000 the average dairy cow in the EU received $913 in subsidies, compared with an average of $8 per person in Sub-Saharan Africa. For the Jamaican reggae band, see Third World (band). ... A boy from Jakarta, Indonesia shows his find. ...

Artificially high food prices

CAP price intervention has been criticised for creating artificially high food prices throughout the EU. The recent moves away from intervention buying, subsidies for specific crops, reductions in export subsidies, have changed the situation somewhat. Although the new decoupled payments were aimed at environmental measures, many farmers have found that without these payments their businesses would not be able to survive. With food prices dropping over the past thirty years in real terms, many products have been making less than their cost of production when sold at the farm gate.

On the other hand, high import tariffs (estimated at 18-28%) have the effect of keeping prices high by restricting competition by non-EU producers.

Hurting smaller farms

Although most policy makers in Europe agree that they want to promote "family farms" and smaller scale production, the CAP in fact rewards larger producers. Because the CAP has traditionally rewarded farmers who produce more, larger farms have benefited much more from subsidies than smaller farms. For example, a farm with 1000 hectares, earning one hundred extra euro per hectare will make 100,000 extra euro, while a 10 hectare farm will only make an extra 1000 euro, disregarding economies of scale. As a result most CAP subsidies have made their way to large scale farmers. Since the 2003 reforms subsidies have been linked to the size of farms, so this is not so true any more. So while subsidies allow small farms to exist, they funnel most profits to larger scale operations. The increase in output from Q to Q2 causes a decrease in the average cost of each unit from C to C1. ...

Environmental problems

A common view is that the CAP has traditionally promoted a large expansion in agricultural production. At the same time it has allowed farmers to employ unecological ways of increasing production, such as the indiscriminate use of fertilizers and pesticides, with serious environmental consequences. However a total re-focusing of the payment scheme in 2004 now puts the environment at the centre of farming policy. This forces strict limits on the amount of nitrogenous fertilisers which can be used in vulnerable areas. Strict environmental requirements must also be observed to maintain any subsidy payments.

Equity among member states

Some countries in the EU have larger agricultural sectors than others, notably France, Spain, and Portugal, and consequently receive more money under the CAP. Other countries receive more benefit from different areas of the EU budget. Overall, certain countries make net contributions, notably Germany (the largest contribution overall) and the Netherlands (the biggest contribution per person), but also the UK and France. The largest per capita beneficiaries are Greece and Ireland. Image File history File links CAP2004beneficiaries. ... Image File history File links CAP2004beneficiaries. ...

France has a slightly lower GDP than the UK, and its higher population means that it earns slightly less per person compared to the UK. Germany has a GDP approximately 25% higher than either France or the UK, but per capita income is comparable to the other two countries. France now makes a net payment into the EU budget, so it can not be said that it receives a subsidy from any other country. However, France remains the #1 beneficiary of the CAP, while the new member states receive only small financial aid.

UK rebate and the CAP

The UK would have been contributing more money to the EU than any other EU member state, except that Margaret Thatcher's government negotiated a special annual UK rebate in 1984. Without the rebate the UK was the largest contributor despite being the third poorest member state. Due to the way the rebate is funded, France pays the largest share of the rebate (31%), followed by Italy (24%) and Spain (14%).^[17]^[18]^[19] Margaret Hilda Thatcher, Baroness Thatcher, LG, OM, PC, FRS (nÃ©e Roberts; born 13 October 1925) served as British Prime Minister from 1979 to 1990 and leader of the Conservative Party from 1975 until 1990, being the first and only woman to hold either post. ... The UK rebate is a rebate on the United Kingdoms contribution to the EU budget paid back to the UK government by the European Union. ...

The discrepancy in CAP funding is a cause of some consternation in the UK. As of 2004, France received 13% of total CAP funds more than the UK (see diagram). This is a net benefit to France of €6.37 billion, compared to the UK.^[20] This is largely a reflection of the fact that France has more than double the land area of the UK. In comparison, the UK budget rebate for 2005 is scheduled to be approx €5.5 billion.^[21] The popular view in the UK (as, for example, set forth in the tabloid press) is that if the UK rebate were reduced with no change to the CAP, then the UK would be paying money to keep an inefficient French farming sector in business - to many people in the UK, this would be seen as "grossly unfair". French motives for generating arguments about "solidarity" and "selfishness" are therefore seen as extremely self-serving. 2004 is a leap year starting on Thursday of the Gregorian calendar. ... For other uses, see News (disambiguation). ...

If the rebate were removed without changes to the CAP then the UK would pay a net contribution of 14 times that of the French (In 2005 EU budget terms). The UK would make a net contribution of €8.25 billion compared to the current contribution of €2.75 billion, versus a current French net contribution of €0.59 billion. Image File history File links FarmlandinEU2. ... Image File history File links FarmlandinEU2. ...

In December 2005 the UK agreed to give up approximately 20% of the rebate for the period 2007-2013, on condition that the funds did not contribute to CAP payments, were matched by other countries' contributions and were only for the new member states. Spending on the CAP remained fixed, as had previously been agreed. Overall, this reduced the proportion of the budget spent on the CAP. It was agreed that the European Commission should conduct a full review of all EU spending.^[22]^[23]

CAP as a form of State intervention

Some major critics of the Common Agricultural Policy reject the idea of protectionism, either in theory, practice or both. Free market advocates are among those who disagree with any type of government intervention because, they say, a free market without interference will allocate resources more efficiently. The setting of 'artificial' prices inevitably leads to distortions in production, with over-production being the usual result. The creation of Grain Mountains, where huge stores of unwanted grain were bought directly from farmers at prices set by the CAP well in excess of the market is one example. Subsidies allowed many small, outdated, or inefficient farms to continue to operate which would not otherwise be viable. A straightforward economic model would suggest that it would be better to allow the market to find its own price levels, and for uneconomic farming to cease. Resources used in farming would then be switched to a myriad of more productive operations, such as infrastructure, education or healthcare. Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over... A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy... ... // The creation of the EUs Common Agricultural Policy was the trigger for the creation of Europes intervention storage. ...

Economic sustainability

Many economists believe that the CAP is unsustainable in an enlarged EU. The inclusion of ten additional countries on May 1, 2004 has obliged the EU to take measure to limit CAP expenditure. Poland is the largest new member and has two million smallhold farmers. It is significantly larger than any of the other new members, but taken together the new states represent a significant increase in recipients under the CAP. Even before expansion, the CAP consumed a very large proportion of the EU's budget, upward of 90% in the late 1980s.^{[citation needed]} Considering that a small proportion of the population, and relatively small proportion of the GDP comes from farms, many considered this expense excessive. States colour-shaded according to entry (darkest being earliest) The European Union originally consisted of six member states. ... is the 121st day of the year (122nd in leap years) in the Gregorian calendar. ... Year 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ...

How many people benefit?

Critics argue that too few Europeans benefit. Only 5% of EU's population works on farms, and the farming sector is responsible for less than 3% of the GDP of the EU. The number of European farmers is decreasing every year by 2%. Additionally, most Europeans live in cities, not rural areas. However, their opponents argue that the subsidies are crucial to preserve the rural environment, and that some EU member states would have aided their farmers, anyway, causing the reinstatement of trade customs fees.

See also

Mariann Fischer Boel Barroso Commission, 2004 to 2009 European Commissioner for Agriculture & Rural Development is a member of the European Commission. ... A European Union Association Agreement (for short, Association Agreement or AA) is a treaty between the European Union (EU) and a non-EU country that creates a framework for co-operation between them. ... Exclusive Economic Zone of the EU, with 25 million kmÂ² it is the largest in the world[1] The Common Fisheries Policy (CFP) is the fisheries policy of the European Union. ... It has been suggested that this article or section be merged with Protected geographical indications in the European Union. ... This article needs to be cleaned up to conform to a higher standard of quality. ... LADSS or Land Allocation Decision Support System, is an agricultural land use planning tool being developed at The Macaulay Institute. ... The Single Payment System (or Single Farm Payment) is a grant scheme introduced in 2005/2006 by the EU to replace the existing Headage/Premia Schemes (Special Beef/Suckler Cow/Ewe Premium/Area Aid etc. ...

References

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Contents

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