Policies and Policy Processes of the European Union
Notes of lectures of European Integration for the second exam, given by Leo Paul. Contains very detailed notes with pictures from the lecture. Got an 9,9 myself with this summary.
College aantekeningen van European Integration - tentamen 1 (Notes of lectures of European Integration - exam 1)
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Sociale Geografie En Planologie
European Integration (GEO33021)
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Lecture 8a: Agriculture and Rural Development (CAP) (Ch 11)
Common Agriculture Policy (CAP) till now
↪ one of the first policies of EU, changed over time, role of different actors
↪ agricultural sector not very well organized (many lobby organisations)
• CAP + Rural Development subsidies
↪ €58 billion/year
↪ EU subside project
↪ 35% of EU budget
↪ only about 7% of EU jobs and 6% of EU GDP → big part of EU budget goes to relatively
small sector
↪ because it just started and is difficult to stop financing CAP (e.g. some countries do not
want to finish subsidizing CAP
↪ some think it’s strange to subsidize this sector, or certain parts of this sector. It should be
subsidizing different things/sectors
• reasons for start CAP (p. 156)
↪ guarantee self-sufficiency (zelfvoorziening) as for food production
↪ produce healthy food
↪ ensure fair income for farmers
↪ stimulate developments (greening, environment)
↪ support rural areas (preserving landscape, help regions to have economic transition e.g. tourism)
• large parts in agriculture production are not subsidised
↪ greenhouses in Westland (NL) (a lot of innovation; no use pesticides, use of wastewater, energy
through e.g. geothermal heat)
↪ no subsidies related to agriculture (sometimes subsidies by energy and climate policy)
↪ subsidies to cow milk, but not to soy milk
• special subsidies to promote certain agricultural products (CHAFEA)
↪ e.g. subsidies for adds stimulating more meat
• is CAP policy a one-size-fits-all policy, how is it related to enormous diversity in EU?
↪ share of employment in agriculture differs in EU (high in Romania, Poland, Greece, south of Spain)
↪ rural areas in countries differ (e.g. NL hardly has rural areas, France has many)
↪ % of population living in rural areas and working in agriculture differ
↪ farm sizes differ (big farms in Czech
percentage of population living in rural areas
Republic, Slovakia, UK, part of France and
Germany)
↪ % of employment in agriculture in old
Member States declined since 1968
↪ possible due to reforms and
agriculture became more productive
↪ different impact and scale of impact of climate change on agriculture in countries
Development of CAP over time
• original goals (early years)
↪ increase agricultural productivity and self-sufficiency
↪ ensure fair standard of living/income for farmers
↪ stabilise market
↪ ensure fair prices of food to consumers
1
, • main instruments (system developed in NL after WWII)
↪ guaranteed (minimum) prices for production
↪ import taxes
↪ export subsidies
• old system CAP (price levels for e.g. grain)
↪ internal market price level; price level for grain production in EU
↪ price could drop below an intervention price; farmers subsidised by Commission
↪ ideally, target price would be high; farmers earning a lot by producing grain
↪ difference between internal market price level/target price and world market price level
↪ export restitution; farmers use subsidies of EU to increase amount of exports
↪ protection of production in EU regulated by import duties; tariffs 3th countries have to pay to
enter European market (very high in beginning to protect EU production)
• effect; overall successful policy
↪ subsidies (and technical progress) → increase of production
↪ open ended budget; more producing → more subsidies
↪ most of subsidies to big farms or agricultural industry
↪ higher incomes big farmers, but incomes for smaller farmers still low
↪ policy to stimulate production, scale enlargement, pesticides → start of environmental
degradation (aantasting milieu) in rural areas
• Mansholt Plan (1968); to stimulate further productivity and scale enlargement
↪ reduce number of farmers (especially small farmers) through e.g. early retirement, reduce number
of cows (esp. of small farms)
↪ ideal sizes for farm; crop: production 60-120 ha dairy: 40-60 cows
↪ huge impact on CAP → a lot of opposition/resistance
↪ reform of the plan (1972); less ambitious, but still stimulus for industrial farming
↪ later Mansholt said he made mistakes, we need small scale organic farming
• with reformed plan, CAP problems still remained
↪ subsidised exports required large increase in CAP expenditure (uitgaven)
↪ subsidies to agriculture; €9 billon 1964-1978 → increase to €31,5 billion in 1917
↪ was seen as not sustainable, not good for overall spending of EU (because EU needs
money for new policies, e.g. regional policy) → reforms + budget share agriculture declining
• reforms; stimulated by open ending subsidising and by external pressure (WTO)
↪ Quota (1984); limit for amount of production (produce more → pay extra price/fine)
↪ MacSharry reforms (1992); shifting from subsidies for production to subsidizing rural incomes
(direct payments to farmers)
↪ decoupling subsidies from production
↪ single farm payment; cut price supports to near world-price level and compensate farmers
with direct payments
↪ cross compliance / delivery of public goods; only single farm payment if you link it to
respect of environmental, food safety, animal and plant health
↪ maybe biggest revolution in CAP
2
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