Friday, March 25, 2011

Plans to cap big farm subsidies lack support

Plans to limit subsidies paid to big farms under the Common Agricultural Policy have won insufficient support in the Council of Farm Ministers: Big farms

The farm commissioner thought that the proposals would be popular with taxpayers. Possibly so, but they have always been opposed by UK and Germany, the countries with the largest number of big farms.

The CAP is supposed to be, among other things, about the international competitiveness of EU agriculture, although in practice more attention is given to propping up marginal farmers. Large-scale farms tend to be more efficient and competitive, so if there are to be subsidies, they should receive them on the same basis as everyone else.

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Monday, March 21, 2011

Setback for reform

Those wanting reform of the CAP have suffered a setback after 20 member states signed a declaration opposing radical reform of the policy: Reform . France was particularly pleased that Poland and Romania signed up given that accession states have been pressing for an eastward redistribution of funds.

The countries that refused to sign up were the reform camp of the UK, Denmark and Sweden; the three Baltic states (hardly big recipients of largesse); and Greece (which may have to do something with the current austerity package).

Although the UK acknowledged that the declaration was a setback in hopes for reform, budgetary pressures may yet have an impact on the final package.

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Thursday, March 10, 2011

Inside the CAP reform process

A major new analysis of the CAP reform process, An Inside View of the CAP Reform Process by Arlindo Cunha with Alan Swinbank has been published by Oxford University Press. Cunha was Portugal's Minister of Agriculture during the negotiation of the MacSharry reforms and was involved in the Fischler reforms as a member of the European Parliament. Swinbank is one of the UK's most distinguished agricultural economists and has written extensively on CAP reform.

The books explains how the 'old' CAP became no longer fit for purpose, deals with the structure and functioning of CAP decision-making, examines the 1992, 1999 and 2003 reform and also the Health Check and includes the results of a Delphi survey of some of the key players in the reform process.

The analysis suggests that the series of reforms 'was initiated by the Commission, with a particularly important role played by the commissioner, with the Commission playing its cards as an agenda setter at a time when internal and external forces were pressing for policy change.' There is much talk these days of the relative weakening of the Commission in the EU policy process and one wonders how far it will be able to play this kind of role in the future.

It is noted that the Commission has not been as successful in developing rural development as the second pillar of the CAP as Commissioner Fischler would have liked, but the decoupling of support has been relentlessly pursued. Of course, one might add that it has made the CAP more respectable.

However, much has not changed. It is noted that that the CAP still pre-empts a large share of the EU budget and that support is very unevenly spread both between and within member states. Larger farms receive higher payments and payments reflect past production structures.

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