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CAN THE CAP MANAGE WITHOUT MARKET REGULATION AFTER 2013?

Alex Danau, 9 March 2010
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The European Union’s Common Agricultural Policy was developed in the original thrust of European unification in the period of reconstruction and reunification that followed the Second World War. Food was a major concern, but it was not the only one. Industrial recovery was another, driven by the automotive industry and therefore derived at least some of its momentum from by the expansion of tractor usage on agricultural holdings.
During the same period there was a massive labour force shift from agriculture to automotive and farm-machinery manufacturing, resulting in huge productivity gains in the farm sector. This process was initially flanked by national agricultural policies and later by the Common Agricultural Policy.

Until 1992 - that is to say for a period of some 30 years - the great majority of agricultural policy instruments focussed on regulating the European Community’s internal markets. The following twenty years saw a gradual dismantling of the market regulation instruments and the creation of a system based on direct income support with increasingly decoupled aids, while internal prices aligned themselves with the lowest price offerings on the world market.

Today’s Common Agricultural Policy has taken a battering from many quarters, despite a recent lull in complaints from third country partners. But of course the European Union has yielded to the World Trade Organisation’s dominant rationale in nearly all areas.
Despite this, international markets are more chaotic than ever before, and farmers’ struggle to stay in business is just as arduous. Obesity, unemployment, poverty, farm abandonment and pollution (of air, soil and water) are the order of the day, not to mention the looming uncertainties of climate change, demographics and the growing scarcity of energy resources. The need for ambitious and courageous policy-making is glaringly obvious.

Will 2013 herald a new change of direction? If it does, what type of agricultural policy should the European Union pursue? One based on cross-compliance, as advocated by environmentalists, on food sovereignty, as advocated by third world activists, or on full deregulation with a basic safety net as favoured by the Northern pro-market Liberals ? Or should it be the one championed by the proponents of the second pillar (a melting-pot of aids co financed by the member states) and supported by the European Commission in exchange for its risky policy on the first pillar. To this long string of preferences we could add those stemming from the calculation of national benefits of the agricultural policy, caused by disparities between old and new member states. Whatever the preference, can we be content with a situation where agricultural prices don’t correspond to the real production costs for a majority of farms, and where direct aids payments are become indispensable?

Whatever the case, if we wish to play a role in the debate we are running out of time because a first draft of new legislation has been promised for the second half of 2010 during the EU Belgian presidency, and the Spanish presidency is hoping to draw discussions to a close at the end of May.
The initial objectives of the agricultural policy, those enshrined in the Treaty of Rome, were perpetuated without further discussion through the adoption of the Lisbon Treaty. Can we allow the institutional debate to deprive us of a discussion on the key objectives of agricultural and food policy? A perilous discussion if we realise that Europe’s founding fathers drew lessons from the events of the first half of the twentieth century, particularly the repercussions of the Great Depression of the 1930s.

The big question stems from our recognition of the omnipresence of the market and its power in directing production systems – power greater than that of the different instruments in place. In this situation, is it possible to design an effective agricultural policy which is not based on market regulation?

A workshop is organised on this question by the CSA on the 31 of March and the 1 of April 2010. See "Program" section to more information.

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