Agriculture: In brief

Summary

Budget

The Common Agricultural Policy (CAP) is a system of EU agricultural subsidies and programmes. 

At €55 billion a year, the CAP currently represents some 45% of the EU's long term budget for 2007-2013, compared to nearly 70% in the 1970s. 

France is the biggest beneficiary of the policy by around 20%, followed by Germany and Spain (~13% each), Italy (~11%) and the UK (~9%).

History of changing priorities

Agricultural policy is one of the oldest areas common European legislation, and it is also the most integrated of all European policies. In the 1950s, it was centred around subsidising farmers  to provide enough food for Europe after war-induced shortages. 

Once EU self-sufficiency was reached from the 1980s onwards, the policy lead to almost permanent surpluses of basic farm commodities ('butter mountains', 'wine lakes', etc.) 

The CAP was subsequently increasingly used for export and storage subsidies. A series of reforms have taken place over the past two decades to remedy the surplus problem and take account of the environmental sustainability of agriculture.

The first major reform of the CAP was implemented in 1992, to limit rising production, while at the same time adjust to the trend towards freer agricultural markets. The reform also created 'set-aside' payments to withdraw land from production, limit stock levels and introduce measures to encourage retirement and forestation. 

The second major CAP reform was adopted as part of the Agenda 2000 package in March 1999, which divided the CAP into two 'pillars': production support and rural development, the latter including issues such as trade, tourism, environmental protection and biodiversity.  

The biggest reform so far was launched in 2003 and featured a 'decoupling' of agricultural production from subsidy payments to prevent over-production and waste. The new system involves a Single Payment Scheme (SPS), in which subsidies are allocated according to indicators such as land size rather than production volume. 

Cross-compliance measures, whereby farmers are required to meet certain environmental, food safety and animal welfare standards, were also introduced as a pre-condition for receiving payments under the SPS. The reform also featured a shift or so-called 'modulation' of monies from the first pillar of the CAP (direct aid and market support) to its second pillar, rural development. 

The 2003 reform was agreed upon just before the eastward enlargement of the bloc in 2004. The extension of the CAP to the new Eastern and Central European countries would have increased its budgetary burden to an unsustainable level. Indeed, the EU's enlargement doubled the agricultural labour force and the arable area of the EU, and added over 100 million food consumers to the internal market. Poland and Romania combined have almost as many farmers as the entire EU before enlargement.

The latest policy review, dubbed the CAP Health Check and launched in 2008, aimed to further modernise the policy and assess whether adjustments are needed to ensure that it is still relevant for new challenges, such as climate change. The EU 27 also agreed to further cut direct subsidies to farmers, for the benefit of rural development policy, and to abolish milk production quotas.

Future reforms beyond 2013

While subsidising production on a large scale and buying up surpluses in the interests of food security are now largely considered policies of the past, soaring global food prices in 2008 have prompted a renewed debate about maintaining sufficient subsidies to the EU farming sector, as some argue that feeding people cannot be left to the mercy of the market. 

2009 will see debate on the CAP's future beyond 2013, in the context of a general review of the EU budget.

Key documents

For further information on EU agricultural policy and summaries of legislation, see:

• Legal basis
• Commission - activities related to agriculture
• The Common Agricultural Policy explained
• From farm to fork - Safe food for Europe's consumers

Issues

Current and upcoming debates

• Global food security
• Rural development
• Biofuels
• GMOs
• Ethics of modern agricultural technologies
• Sustainable use of pesticides
• Organic farming
• Food safety
• Climate change
• Environmental sustainability of agriculture
• • Water use; 
  • soil quality, and; 
  • biodiversity.

Positions

Main actors

Commission:

• DG Agriculture and Rural Development
• Agriculture and Rural Development Commissioner Mariann Fischer Boel 
• European Food Safety Authority (EFSA)
• Community Plant Variety Office (CPVO)
• European Group on Ethics in Science and New Technologies (EGE) 

Parliament:

• Committee on Agriculture and Rural Development (AGRI)
• Committee on Environment, Public Health and Food Safety (ENVI)

Council:

• Agriculture and fisheries
• Environment

Member states:

• National Ministries for Agriculture  
• EU-27 farmers unions
• EU-27 agri-cooperatives
• EU-27 landowners' organisations

International organisations:

• The Organization for Economic Cooperation and Development (OECD)
• World Trade Organization (WTO)
• World Bank
• Food and Agriculture Organization of the United Nations (FAO)

European Industry Federations and Trade Unions:

• COPA-COGECA, the voice of European farmers and European agri-cooperatives COPA (Committee of Professional Agricultural Organisations); COGECA (General Committee for Agricultural Cooperation in the European Union)
• European Landowners' Organisation (ELO) 
• European Coordination Via Campesina (represents professional agricultural organisations, and rural and agricultural workers) 
• European Fertilizer Manufacturers Association (EFMA)
• European Crop Protection Industry (ECPA)
• European Seed Association (ESA)
• European Associaiton of bioindustries (EuropaBio)
• Confederation of the food and drink industries of the EU (CIAA)

NGOs and Think-Tanks:

• European Environment Bureau (EEB) 
• WWF European Policy Office (WWF-EPO)
• Rural Investment Support for Europe Foundation (RISE Foundation)
• Alliance for a Green Revolution in Africa
• Pesticides Action Network Europe (PAN-E)
• Health and Environment Alliance Network (HEAL) 
• Friends of the Earth Europe (FOEE)
• Oxfam