The Common Agricultural Policy: The Future of the CAP and why real reform will never happen. EUMA Paper Vol. 6 No. 7, May 2010

This paper sets out to examine the Common Agricultural Policy (CAP) of the European Union from its inception to present day 1. Specifically, this paper seeks to answer the following questions: (1) What long-term effects, if any, did the circumstances surrounding, and leading up to the formation of the CAP have; (2) What have internal and external responses been to the CAP; (3) How has the CAP responded to major events both internally (within the European Union), and externally (internationally); (4) What affect does the recently implemented Lisbon Treaty2 have on the CAP, and (5) What is the future of the CAP and CAP reform? In order to answer these questions this paper begins with the contention that the CAP is in fact the largest and strongest driving force of EU expansion. In support of this proposition, this paper first examines the circumstances and events leading to the creation of the CAP in the European Community. Second, this paper examines what long-term effects the circumstances surrounding the CAP’s inception have had on the policy, particularly calling attention to the disproportionate Franco-German CAP benefits. Third, the paper then examines how the CAP has responded to historical events that have had significant effects on the European community, particularly EU expansion, the implementation of the Lisbon Treaty, and the recent worldwide economic crisis. Finally, this paper examines common criticisms of and conflicts surrounding the CAP, both internally and externally, and argues that CAP reform, at least within the current institutional framework of the European Union, can never truly occur.

Gender mainstreaming and the Common Agricultural Policy

While there are many case studies looking at gender mainstreaming in national contexts, this article offers a pan-European perspective to examine how a stated commitment to gender equality at this meta-level works in practice. The European Union’s (EU) stated commitment to gender mainstreaming the Common Agricultural Policy (CAP) is critically reviewed. The article reviews theoretical literature on gender mainstreaming, considers the position of women in agriculture across Europe, and examines efforts by the EU to gender mainstream the CAP. It argues that at best, gender mainstreaming focuses on the symptoms of gender inequality in agriculture rather than the causes. Because of this, gender mainstreaming cannot be transformative in this context. Little thought has been given to the practical difficulties of actually gender mainstreaming a policy such as the CAP. The EU’s priority for the CAP focuses on the mainstream business goal of a viable agricultural industry and does not pay any heed to gender inequalities in agriculture. In short, the stated commitment to gender mainstreaming is empty rhetoric

Explaining the 'health check' of the Common Agricultural Policy: budgetary politics, globalisation and paradigm change revisited

Three potential explanations of past reforms of the Common Agricultural Policy (CAP) can be identified in the literature: a budget constraint, pressure from General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) negotiations or commitments and a paradigm shift emphasising agriculture’s provision of public goods. This discussion on the driving forces of CAP reform links to broader theoretical questions on the role of budgetary politics, globalisation of public policy and paradigm shift in explaining policy change. In this article, the Health Check reforms of 2007/2008 are assessed. They were probably more ambitious than first supposed, although it was a watered-down package agreed by ministers in November 2008. We conclude that the Health Check was not primarily driven by budget concerns or by the supposed switch from the state-assisted to the multifunctional policy paradigm. The European Commission’s wish to adopt an offensive negotiating stance in the closing phases of the Doha Round was a more likely explanatory factor. The shape and purpose of the CAP post-2013 is contested with divergent views among the Member States.

Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions. Factor Markets Working Paper No. 28, July 2012

This paper deals with the determinants of labour out-migration from agriculture across 149 EU regions over the 1990–2008 period. The central aim is to shed light on the role played by payments from the common agricultural policy (CAP) on this important adjustment process. Using static and dynamic panel data estimators, we show that standard neoclassical drivers, like relative income and the relative labour share, represent significant determinants of the intersectoral migration of agricultural labour. Overall, CAP payments contributed significantly to job creation in agriculture, although the magnitude of the economic effect was rather moderate. We also find that pillar I subsidies exerted an effect approximately two times greater than that of pillar II payments.

Influence of the Common Agricultural Policy and Heterogeneous Land Quality on Land Rent and Land Allocation. Factor Markets Working Paper No. 38, March 2013

Against the background of the current discussion about the EU’s common agricultural policy (CAP) after 2013, the question of the impact of government support on land prices is crucially important. Validation of the CAP’s success also hinges on a proper assessment of a choice of policy instruments. This study therefore has the objective of investigating on a theoretical basis the effects of different government support measures on land rental prices and land allocation. The different measures under consideration are the price support, area payments and decoupled single farm payments (SFPs) of the CAP. Our approach evaluates the potential impact of each measure based on a Ricardian land rent model with heterogeneous land quality and multiple land uses. We start with a simple model of one output and two inputs, where a Cobb-Douglas production technology is assumed between the two factors of land and non-land inputs. In a second step, an outside option is introduced. This outside option, as opposed to land use of the Ricardian type, is independent of land quality. The results show that area payments and SFPs become fully capitalised into land rents, whereas in a price support scheme the capitalisation depends on per-acreage productivity. Moreover, in a price support scheme and a historical model, the capitalisation is positively influenced by land quality. Both area payments and price supports influence land allocation across different uses compared with no subsidies, where the shift tends to be larger in an area payment scheme than in a price support scheme. By contrast, SFPs do not influence land allocation.

The Political Economy of the 2014-2020 Common Agricultural Policy: An Imperfect Storm. CEPS Paperback, 17 August 2015

After five years of debates, consultations and negotiations, the European institutions reached an agreement in 2013 on the Common Agricultural Policy (CAP) for the 2014-2020 period. The outcome has major implications for the EU’s budget and farmers’ incomes but also for Europe’s environment, its contribution to global climate change and to food security in the EU and in the world. It was decided to spend more than €400 billion during the rest of the decade on the CAP.The official claims are that the new CAP will take better account of society's expectations and lead to far-reaching changes by making subsidies fairer and ‘greener’ and making the CAP more efficient. It is also asserted that the CAP will play a key part in achieving the overall objective of promoting smart, sustainable and inclusive growth. However, there is significant scepticism about these claims and disappointment with the outcome of the decision-making, the first in which the European Parliament was involved under the co-decision procedure. In contrast to earlier reforms where more substantive changes were made to the CAP, the factors that induced the policy discussions in 2008-13 and those that influenced the decision-making did not reinforce each other. On the contrary, they sometimes counteracted one another, yielding an ‘imperfect storm’ as it were, resulting in more status quo and fewer changes. This book discusses the outcome of the decision-making and the factors that influenced the policy choices and decisions. It brings together contributions from leading academics from various disciplines and policy-makers, and key participants in the process from the European Commission and the European Parliament.

Information Guide: Common Agricultural Policy

A guide to the European Union's Common Agricultural Policy (CAP), with hyperlinks to sources of information within European Sources Online and on external websites.

How consistent is the new Common Agricultural Policy with the challenges it faces?

The latest reform of the Common Agricultural Policy (CAP) has recently been accepted, identifying important challenges for EU agriculture, but proposing only limited changes to the previous CAP. Now it is time for the implementation of the new measures. However, from a theoretical point of view, it seems that the CAP can hardly meet the challenges it faces due to the inconsistencies between the predefined challenges and the measures proposed to meet them. The aim of the paper is to systematically analyse the consistency between the challenges of European agriculture and the policy measures aimed at meeting them. It seems that not all measures are consistent with the challenges.

How consistent is the new common agricultural policy with the challenges it faces?

The latest reform of the Common Agricultural Policy (CAP) has recently been accepted, identifying important challenges for EU agriculture, but proposing only limited changes to the previous CAP. Now it is time for the implementation of the new measures. However, from a theoretical point of view, it seems that the CAP can hardly meet the challenges it faces due to the inconsistencies between the predefined challenges and the measures proposed to meet them. The aim of the paper is to systematically analyse the consistency between the challenges of European agriculture and the policy measures aimed at meeting them. It seems that not all measures are consistent with the challenges.

The economic effects of common agricultural policy on Mediterranean montado/dehesa ecosystem

The decoupling of CAP payments leads production decisions and resources allocation to be more dependent on market prices and competitive advantages. The objective of this paper is to assess the effects of CAP trends on the montado/dehesa traditional ecosystem of Mediterranean regions in terms of farm income, land, labour and capital. A positive mathematical supply model disaggregated by the montado agro-forestry production systems of the Alentejo region in southern Portugal is developed. The results show that decoupling payments of CAP have negative economic effects on agricultural activities and resource use. Agricultural income increases with single farm payments but the foreseen increases in prices do not compensate the loss of the Agenda 2000 area payments in terms of competitiveness. These results reinforce the need to promote alternative agricultural and non-agricultural activities and policies in Mediterranean rural European areas and regions. (C) 2011 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Ideational change in the WTO and its impacts on EU agricultural policy institutions and the CAP

This paper argues that the Uruguay Round Agreement on Agriculture (URAA) introduced the market liberal paradigm as the ideational underpinning of the new farm trade regime. Though the immediate consequences in terms of limitations on agricultural support and protection were very modest, the Agreement did impact on the way in which domestic farm policy evolves. It forced EU agricultural policy makers to consider the agricultural negotiations when reforming the Common Agricultural Policy (CAP). The new paradigm in global farm trade resulted in a process of institutional layering in which concerns raised in the World Trade Organization (WTO) were gradually incorporated in EU agricultural institutions. This has resulted in gradual reform of the CAP in which policy instruments have been changed in order to make the CAP more WTO compatible. The underlying paradigm, the state-assisted paradigm, has been sustained though it has been rephrased by introducing the concept of multifunctionality.

Predicting the impact of the EU common agricultural policy reform in England: micro and macroeconomic aspects

In this article we investigate the effects of the European CAP reform on a selection of arable crops in England, both at a regional and national level. The results show that the CAP reform will push farmers to adjust to the new market conditions, which will cause a further restructuring of the English agricultural business sector. Our results show that, under the new market conditions, economically-small farms will increase their output by allocating more land to cereals, whereas economically-large farms will need to decrease land allocated to cereals to reduce production costs and achieve better returns.

The implications of the 2003 Common Agricultural Policy reforms for land use and landscape quality in England

The assessment of the potential landscape impacts of the latest Common Agricultural Policy reforms constitutes a challenge for policy makers and it requires the development of models that can reliably project the likely spatial distribution of land uses. The aim of this study is to investigate the impact of 2003 CAP reforms to land uses and rural landscapes across England. For this purpose we modified an existing economic model of agriculture, the Land-Use Allocation Model (LUAM) to provide outputs at a scale appropriate for informing a semi-quantitative landscape assessment at the level of ‘Joint Character Areas’ (JCAs). Overall a decline in the cereal and oilseed production area is projected but intensive arable production will persist in specific locations (East of England, East Midlands and South East), having ongoing negative effects on the character of many JCAs. The impacts of de-coupling will be far more profound on the livestock sector; extensification of production will occur in traditional mixed farming regions (e.g. the South West), a partial displacement of cattle by sheep in the upland regions and an increase in the sheep numbers is expected in the lowlands (South East, Eastern and East Midlands). This extensification process will affect positively those JCAs of mixed farming conditions, but it will have negative impacts on the JCAs of historically low intensity farming (e.g. the uplands of north-west) because they will suffer from under-management and land idling. Our analysis shows that the territorialisation between intensively and extensively agricultural landscapes will continue.