Thursday, January 08, 2009

Budget pressure on CAP

With the Health Check out of the way, it looks as if the medium-term future of the CAP is going to be strongly influenced by discussions of how the EU budget should be spent. This always raises the awkward question of the opportunity cost of spending large sums of money on subsidising farmers.

One external study has concluded that the CAP could just as well be paid from national budgets as the EU budget in terms of its European added-value. (For the study go here: Budget This study seems to have influenced the viewpoint of EU Budget Commissioner Dalia Grybauskaité. She told Agra Focus that there will be massive poltical pressure for the EU to concentrate its policy spending after 2013 on areas where there is a genuine added-value at EU level, e.g., a common policy on energy or climate change.

The Commissioner described 1st pillar CAP funding as 'generally the largest and most costly EU policy which, under each reform has got more and more expensive and less and less efficient'. She also questioned whether agriculture policy is still a 'common policy'. When the EU was created there were questions of hunger. But that has changed and 'we are now fighting with over production and with price crises for food and agricultural products'.

Another argument for co-funding - which already happens in the new member states - is the casual attitude she has witnessed from some member states to various EU-funded projects - as demonstrated by poor controls and the likely increase in sums received under the 'clearance of accounts' procedure. As soon as national/regional funds are involved, the relevant authorities are more focussed and responsible for an efficient use of public money, she argued.

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