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A deal was recently agreed by EU agriculture ministers which aims to benefit consumers while allaying the farmers' fear of change. Will it work ?
THE COMMON agricultural policy (CAP) absorbs about half the EU's total yearly expenditure of 65 billion pounds. It is estimated that U.K. contributions totalled the equivalent of £4 per week for every person in the country. The CAP is a legacy of the period after the second world war when there were concerns about food shortages throughout Europe. Farmers were guaranteed food prices to encourage production. If the market price failed to reach the guaranteed price the Commission payed the difference to the farmers. By the 1970s there was more than enough food to go around in the Common Market countries and the famous wine lakes and butter mountains were produced which the EU could not sell within its boundaries. These were often sold very cheaply to countries outside, such as the Soviet Union, as subsidised exports. Conversely, high tariff barriers were erected against agricultural imports in order to keep the EU market price as high as possible. As the mountains of food and lakes of wine became bigger, other measures were adopted. These included large scale destruction of produce and 'set-aside' measures which payed farmers not to plant crops. There were several negative outcomes of this state of affairs, leaving aside the bloated CAP budget. Consumers payed twice: firstly through taxes and secondly through needlessly high food prices.
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According to National Consumer Council figures, in 1996 consumers payed an extra €39 billion (£26.5 billion) through inflated food prices. By their calculations, for every €100 that farmers gain from the CAP, consumers and taxpayers pay out €142. Environmental effects were also detrimental. In the drive to produce food at any cost the U.K. has seen, since 1971, numbers of farmland bird species decline by as much as 70%. Between 1975 and 1995 fungicide use rose six-fold, and the percentage of crops treated with herbicides doubled. In general across the EU, the World Wildlife Fund says 'biological, landscape |
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and cultural diversity of rural areas continues to deteriorate'. The policy has to change for several reasons: 1) as mentioned on this page of our last issue the entry of east European countries where about 25% of people work on the land as opposed to the 4% who do so in the present EU would quickly bankrupt the CAP, 2) as the World Trade Organisation (WTO) drives towards an ever freer system, it will no longer allow the EU to export food under its present protective regime and 3) environmental pressures will dictate that farmers be payed for conserving the countryside rather than for simply piling up quantities of food. |
The then Commissioner of Agriculture and Rural Development, Franz Fischler, described the outcome as 'a solid basis for ensuring the future development of the EU's agricultural sector. While being slightly less ambitious than the Commission's proposals, the package nevertheless amounts to the most radical reform since the CAP was first established in the early 1960s'. Although the overall cost of the CAP would not go down in the next few years, UK Agriculture Minister Nick Brown said the average family would see substantial savings when reform is complete. 'When fully implemented, these reforms will cut food bills by a billion pounds a year and that is equivalent to £70 a year for a family of four on their food bills,' he said. Farmers' leaders were less hopeful of price reductions in the shops, 'I would like to think they would be passed through to the consumer. But the reality is that the proportion of the final retail price that the farm gate price makes is very, very small these days.' emphasised Ben Gill, President of the National Farmers Union.
Environmental campaigners, too, felt that the job had only been half done. The chief executive of the Royal Society for the Protection of Birds , Graham Wynne, said: "This cannot be the final word on CAP reform. The CAP has devastated Britain's wildlife for 30 years, and this modest deal only begins to limit its worst excesses. We need a new beginning for farmers and the countryside, but this deal isn't it.'
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