The costs of the Common Agricultural Policy
- Author(s):
- Parliamentary Assembly
- Origin
- Assembly debate on
7 October 2005 (32nd Sitting) (see Doc. 10649, report of the Committee
on the Environment, Agriculture and Local and Regional Affairs,
rapporteur: Mr Flynn). Text adopted by the Assembly on 7 October
2005 (32nd Sitting).
- Thesaurus
1. The Parliamentary Assembly recognises
that the Common Agricultural Policy (CAP) of the European Union
(EU) is a policy determined by the circumstances of post-war Europe
to safeguard and ensure its food supply. Those circumstances have
changed. It is time to reconsider the CAP in the light of its costs
and effects, not only in Europe but also for developing countries,
and to take more account of the non-economic effects of agriculture.
2. The Assembly recalls its Resolution
1322 (2003) on challenges for a
new agricultural policy and notes that the CAP has met its original
aims of guaranteeing food supplies and income for farmers. It has
also promoted rural development and has been beneficial to rural
communities, particularly in protecting Europe’s cultural heritage
and traditions.
3. Agriculture has been in difficulty in Europe for some years.
The number of people it employs and its relative contribution to
the gross domestic product, within the limits of that definition,
are in decline. Young people are no longer attracted to this activity,
which has been overtaken in its contribution to the economy by other
sectors.
4. The Assembly welcomes the recent package of CAP reforms as
a tentative step forward in addressing the challenges faced by the
CAP and refocusing on the protection of the environment and animals
and on its social effects. The new reform is an opportunity for
farmers to improve their services to consumers, the environment
and rural areas, and to offer fresh prospects to farming families.
5. There is a need for a shift in focus to tackle some of the
negative effects of the CAP and the problems caused to developing
countries, consumers, industry and the environment.
6. In developing countries, agriculture is often the main economic
activity. These countries mostly carry out a traditional form of
agriculture, aimed at home consumption and the local markets, whose
future is threatened. It is subject to competition, also on the
local markets, from commodities produced by major agricultural and food-processing
companies, many of them multinationals. Rural populations are drifting
into the cities, where there is too often a dearth of job opportunities,
housing and services, which results in serious social problems.
7. The governments of developing countries endeavour to secure
hard currency to be able to import goods and services from developed
countries and, despite the problems this causes on the domestic
front, they give precedence to major enterprises able to export
agricultural products. This policy suffers from restrictions to
free trade imposed by advanced economies such as those of the United
States and the European Union. The Assembly observes these contradictions
and notes the need for the EU to shoulder its responsibility for
the complex effects of its agricultural policy on developing countries.
8. The Assembly recalls Resolution
1449 (2005) on the environment and
the Millennium Development Goals and notes that agriculture can
be a major force in reducing poverty by improving employment prospects and
creating wealth. However, the EU must carefully assess the effects
of its agricultural policy both within Europe and in developing
countries and take appropriate action to meet its commitments to
reach the Millennium Development Goals, including through its agricultural
policy.
9. The negative effects of the CAP are clear in the impact that
the European Union’s sugar regime has had on many developing countries,
where sugar can be produced more easily and at lower cost. The Assembly condemns
the EU sugar regime for awarding large subsidies to already highly
profitable companies and hindering the ability of developing countries
to escape poverty. While providing aid to developing countries, potential
income is cut through trade restrictions. This situation is no longer
tenable.
10. The Assembly notes that consumers in the European Union pay
twice for the Common Agricultural Policy: through taxation, farmers
and consumers are the victims of this policy, which results in lower
income for farmers and high food bills for consumers.
11. The CAP remains a significant burden on the budget of the
European Union, while other challenges, such as scientific research,
territorial cohesion, common defence, etc., demand new resources.
The use of CAP resources must not become counterproductive and therefore
its effects on manufacturing industries must be taken into account
as they can be very negative at times, as in the case of the sugar
industry. Some CAP schemes have had a negative impact on linked
industries causing job losses, for example amongst manufacturers
of sugar-based products.
12. In addition, there is concern about the way subsidies are
distributed. Large financial awards are being made to the largest
farms, dispelling the idea that the CAP protects the smallest farmers.
The decision by the United Kingdom Department for Environment, Food
and Rural Affairs to publish the recipients of subsidies (names
and amount received) in March 2004 is to be welcomed. It is revealing
that the CAP does not primarily help small farmers.
13. The Assembly regrets that some elements of the CAP which have
promoted intensive farming, alongside developments in technology,
have also indirectly contributed to the destruction of habitats,
pollution and a decline in the bird and animal species dependent
on those habitats for their survival. Bird species have been recognised
as indicators of this. Across Europe, the population of many farmland
birds have been severely damaged as a result of this trend. For
instance, the population of a farmland bird, the skylark, has declined
by 52% in the UK.
14. Without further reform, the Assembly is concerned about the
long-term future of bird and animal species in Europe and the resources
needed to repair the environmental damage caused by intensive farming.
15. New Zealand offers an example of what can happen when subsidies
are removed. Subsidies became unsustainable and were removed in
1984. It is notable that agriculture in New Zealand did not go into
decline; productivity improved, environmental damage was reversed
and the industry now responds to market and consumer demand. Important
lessons can be learned from this example, even though the situation
of agriculture in many parts of Europe cannot be compared with that
in New Zealand in terms of rural population density, production
tradition and complexity, links between agriculture and other local
sectors such as tourism and the links between agriculture and landscape
and environmental quality.
16. Switzerland offers a contrasting example combining high subsidies
with environmental protection. This principle is incorporated in
the Swiss Constitution. The integration of such a concern into agricultural
policy is a wise choice, and subsidies are not handed out to farmers
with high incomes. Swiss agricultural policy, although costly, is
noteworthy above all for rewarding farmers for caring for the environment
and maintaining the landscape in the course of their activities.
17. Consequently, the Assembly recommends that the institutions
and member states of the European Union consider the following issues
in current and future reforms of the CAP:
17.1 the CAP’s impact on developing countries, the environment,
consumers, taxpayers and other industries and how to address this
matter;
17.2 the urgent need to address the effects of the CAP on developing
countries, particularly through schemes such as the EU sugar and
tobacco regimes;
17.3 the important lessons that can be learned from the examples
of New Zealand and Switzerland;
17.4 the role that agricultural policy can play in promoting
rural development, protecting cultural heritage, traditions and
landscapes;
17.5 the need to develop a more efficient and fair system remunerating
the non-economic services supplied by farmers: the protection of
the environment and of animals, the maintenance of landscape, their
contribution to the social and economic life of the outlying regions
and preservation of water, air and soil as life’s essential elements;
17.6 the need to require the publication of all aid recipients
and amounts received to introduce greater transparency and accountability;
17.7 the need for reform to encompass all interests and not
just those of the farming sector;
17.8 the need to focus on the environment, particularly in
the context of imminent problems predicted as a result of climate
change, and on society by occupying the whole territory to ensure
its upkeep;
17.9 the expediency of devising a system of subsidies according
to land area and taking account of farmers’ assets and income so
that small farms are afforded better protection.
