Commission's home truths on the CAP

While the Commission’s Communication on the future of the CAP after 2013 is less remarkable for what it says than what it leaves out, one of the accompanying documents is a fascinating read, and reveals much about how the Commission regards the future of the EU’s €55 billion-a-year farm policy.
Despite its unpromising title, the Consultation Document for Impact Assessment shows there are at least some people in the DG Agri bunker who are engaging their brains on the future of the CAP. What’s more, the document hints we might expect something altogether more radical and ambitious when the Commission’s legislative proposals are made later this year.
Most striking about the document are the home truths told about the state of EU agriculture – admissions that one would rarely, if ever, hear uttered in public by a Commissioner or a senior DG Agri official.
First, European farming is in a parlous economic state and ‘the current policy has a strong focus on income support’. According to the document’s authors, farming is chronically unprofitable and the imperative of “short term survival dominates the perception of many farmers”, making it very difficult to reorient policy towards greater economic and environmental sustainability. Income support measures not only dominate the policy but are unfair, insufficiently targeted and ‘hard to justify to the general public’.
Second, food security concerns advanced by farm unions and others are misplaced. All but the very poorest Europeans can afford to feed themselves perfectly adequately and are likely to be able to do so for the foreseeable future. Food security may be an issue for people in the Global South living on less than $2 a day, but not for relatively wealthy Europeans. The dominant food policy worry for Europeans is over-consumption and the authors pulls no punches in blaming the food industry and the mass media for the marketing of “unhealthy food stuffs (soft drinks, highly processed foods)” that contribute to obesity, diabetes, cardiovascular disease and cancer.
Third, while much rhetoric is devoted to the public goods provided by farming, the reality is that agriculture does as much to despoil the environment as it does to enhance it. Agriculture is using more water than ever, particularly in southern Europe where it is a particularly precious resource. A quarter of EU soils suffer from unsustainable erosion and almost half have low organic matter content. Biodiversity is declining across the continent, and farmland wildlife is suffering the most. Agriculture contributes upwards of 10 per cent of EU greenhouse gas emissions, yet is exempt from the Emissions Trading System. (On the positive side, fewer agrichemicals are being applied than in the recent past).
In considering the farm income question, which is rapidly emerging from the shadows as the fundamental justification for the CAP, the Commission authors make a basic but fundamental error that has been previously discussed on this blog. They equate income-from-farming with the incomes of farm households. While income from farming may be ‘lower than that of the rest of the economy’, it doesn’t follow that incomes of farm households are necessarily any lower than non-farming households. At least a third of farmers have non-farm incomes (and yet more have a spouse with a non-farm income). This ought to be taken into account in deciding whether farm households need a dedicated, EU-funded income support policy. More time should be spent on the question of whether farmers should continue to enjoy an EU-funded income support policy that is not offered to any other sector of the European economy.
The document concludes by proposing three objectives for the future CAP and five scenarios for the future of the CAP. The objectives are:
1. Maintaining agricultural production capacity throughout the EU (but don’t tell anyone at the WTO!)
2. Preserving natural resources and the countryside
3. Contributing to the vitality of rural areas
The five proposed scenarios to be analysed in detail in the full impact assessment are as follows:
1. ‘Adjustment scenario’ – gradual change in line with previous reforms of the CAP.
2. ‘Integration scenario’ – a thoroughly revised policy framework to address three objectives via substantial changes to both the first and second pillars of the CAP.
3. ‘Re-focus scenario’ – phase out the income support and market management elements of the CAP in favour of a less expensive policy targeted on sustainable growth, environmental conservation and climate change (economic and social policies would be hived off from the CAP to the EU’s existing cohesion policy).
4. Status quo
5. No policy
The document is open for consultation until 25 January 2011 and respondents are invited to address eleven questions listed at the very end.

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