Common Agricultural Policy reform [Archived]


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The European Community has set agriculture high on its political agenda right from the start when the Treaty of Rome was negotiated. Ensuring sufficient levels of food production was a top priority in the post-World War II Europe.

The Common Agricultural Policy (CAP) first came into force in 1962, introducing a set of mechanisms on production, trade and food processing in the original Community of six Member States.

The CAP's main objectives are:

  • increasing agricultural productivity;
  • ensuring a fair standard of living for the agricultural community;
  • stabilising markets;
  • assuring the availability of supplies;
  • ensuring that supplies reach consumers at reasonable prices.

The following instruments were created in order to reach these objectives:

  • common rules on competition;
  • compulsory co-ordination of various national market organisations;
  • a European market organisation.

The importance of the CAP is underlined by its 50-percent share of the EU budget.

The first major reform of the CAP was implemented in 1992, under Agriculture Commissioner Ray MacSharry who proposed two discussion papers on the development and the future of the CAP. The main elements of the 1992 CAP reform:

  • cut of agricultural prices to render them more competitive in the internal and world market,
  • compensation of farmers for loss of income,
  • new market mechanisms,
  • measures to protect the environment.

T he second major CAP reform was adopted as part of the Agenda 2000 package in March 1999 by the European Council of Berlin.

Main elements of the CAP reform under Agenda 2000:

  • increasing competitiveness of agricultural products;
  • ensuring a fair standards of living for the farmers;
  • creation of substitute jobs and other sources of income for farmers;
  • introducing a new policy for rural development (the second pillar of the CAP);
  • more environmental and structural considerations;
  • improvement of food quality and safety;
  • simplification of agricultural legislation and decentralisation of its application.

The agreed Agenda 2000 reform was not as ambitious as proposed by the Commission, therefore a compromise was reached that a mid-term review would be undertaken in 2002-2003. The mid-term review should identify the main problems to be addressed by the next CAP reform.