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Agricultural economists declare war on the CAP

I’ve always found the notion of ‘agricultural economists’ a curious one. As if the normal rules of economics don’t apply to agriculture and there’s need for a special discipline of agricultural economics. In universities agricultural economists are often housed in their own special departments, separate from the regular Economics department. I wonder if this alternate universe of agricultural economics might explain the state of agriculture policy, whether in the EU, the US or elsewhere. Anyway, today a group of agricultural economists from 22 EU countries has come out in favour of radical reform of the Common Agricultural Policy.

In a five-page Declaration they say

We agree that Europe needs an agricultural policy, but it needs one that focuses on areas where European action creates the greatest value. The CAP is not the right policy framework to enhance the efficiency of agriculture, change income distributions in the EU and abroad, promote world food security, or encourage rural development. (my emphasis)

The Declaration endorses the ‘public money for public goods’ logic that has long been promoted by a range of environmental NGOs, most prominently Birdlife International:

The future role of the CAP should be to give farmers appropriate incentives to deliver European public goods demanded by society, particularly in the environmental realm. This includes the fight against climate change, the protection of biodiversity, and water management (avoiding pollution, scarcity and floods).

The Declaration says that the main bulk of the CAP (market measures and direct aid), worth around 40 billion euro a year, should be scrapped:

The first pillar should be progressively abolished. Originally introduced to compensate farmers for lower price support, the main tool of the first pillar – the Single Farm Payment – does not promote societal interests. It should be phased out, and new schemes designed in which aids are granted not on past, but on future behaviour.

There are some well-known names on the list: Alan Swinbank, who along with Stefan Tangermann is the father of the ‘decoupling and bond scheme’ idea of the 1990s, Ewa Rabinowicz, the firey Swede who was one of the co-authors of the influential Buckwell Report, Jerzy Wilkin, Poland’s most authoritative academic working on agriculture policy, and Jo Swinnen, who has done some very good political economy work on the CAP.

The Declaration has been being co-ordinated by Valentin Zahrnt, of ECIPE, a free-market think tank in Brussels, and occasional contributor to this very blog. There will be public event in Brussels next week to launch the Declaration. As well as the Declaration, there is a new website and blog: reformthecap.eu. I’m sure all writers of this blog will welcome the competition.

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3 Replies to “Agricultural economists declare war on the CAP”

  1. I hope to remain an ‘occasional contributor to this very blog’ – and I don’t believe that I will compete with the reformthecap.eu page in this way. In my view, these two pages are complementary:
    – caphealthcheck is for experts who want to have very up-to-date information, it’s investigative.
    – reformthecap provides a more structured overview to stakehoders who have more recently become involved with agriculture, and it is a platform for further stakeholder mobilization
    Seems to fit nicely.

  2. Thank you for the link to reformthecap.eu. Having read the Declaration, I suggest this is probably the most straight-forward, well balanced review and reform proposal I have seen (of many).

    But will the influential EU leaders (eg Sarkozy) be willing to set aside their prejudices and really think it through, in the manner the Declaration invites them to? Who is going to lobby the leaders and the EU parliamentarians on behalf of this Declaration? Remember, many of the CAP recipients are agro-industrialists – already well represented by lobbyists in Brussels – rather than farmers.

  3. @ Valentin: As people who believe in the power of competitive markets to increase quality, value and choice, we can surely agree another entrant to the CAP reform marketplace of ideas is to be welcomed!

    @ french derek: I agree, it’s a very cogent, concise critique of the problem, a good discussion of the challenges and points in all the right directions in terms of the future of the policy. I sincerely hope it ‘gets wings’

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