What is the future for the oldest European policy : the CAP ?
The common agricultutal policy (CAP) is the oldest European Union policy. It was created by the Treaty of Rome (1958) and exist since 1962. It was founded on three principles which are: the prices uniqueness, the preference of the community and the financial solidarity. The CAP asks for the agricultural prices support interventions by the European Agricultural Guarantee Fund (FEAGA) since the 1st January 2007. In 1992, the CAP was reformed for complete the prices support by farmer directs payments with the production mastery obligation. Even if its share is decrease in the EU budget, it actually represents the 1/3 of the EU expenses.
The first objectives of the CAP
The CAP is mainly founded on measures of prices controls and subventions for modernize and develop the agriculture. It is implement by General Direction « Agriculture and Rural Development » of the European Commission. In France, it is executed by two agricultural offices under the Agricultural Secretary. The CAP is composed by two pillars, the first is mentioned above and the second created in 1999 is for the rural development.
The founder objectives:
the agricultural productivity
assure a equitable life level for the agricultural population stabilize markets
assure reasonable prices for consumers
The impacts was to :
support knowledge and innovation transfers
reinforce the competitiveness and the durable management of the forest
promote the organization and the risks management in the alimentary chain
restore and protect the ecosystems
promote efficient use of resources
fight against the poverty in rural zones
Mac Sharry (1992) and the Agenda Reforms (2000)
The 1992 reform called Mac Sharry has for objective to decrease the CAP expenses budget. Particularly, in set up indirect payments which insure a minimal price for farmers productions. These payments will be composed by direct payments proportional of the exploitations size for the producers.
The Mac Sharry reform was essential in the implement of the trade agreement Uruguay Round (international commercial negotiations of GATT since 1987 to 1994). This agreement had to guarantee international and European exportations subventions.
In 1999, a new reform is necessary for the Agenda 2000. It fixed budgetary perspectives for the period 20002006 and take consequences by the East Europe enlargement.
The Luxembourg Agreement – reform of 2003
The Luxembourg agreement prepare the CAP reform in 2003 who takes 1992 and 1999 acquisition and has two essentials objectives. They are the payments decoupling and theirs conditionality. The payments decoupling consists by a partial replacement of subventions which are settled by the previous reforms. They are tie up to surfaces and productions by a single payment which is independent of the exploitation activity. The unique payment became the major component of support expenses markets and agricultural incomes (the first pillar of the CAP).
The payments conditionality submits the payment by norms respect in environment and the public health. For the durable development of the agriculture, this reform purposes to increase payments for the nonmarketed of agriculture.
Treaty of Lisbon (2009)
Since the Treaty of Lisbon, the role of the European Parliament is strengthen on legislative, executive and financial aspects related to the CAP. It must work jointly with the European Union Council (art 43 TFEU)(1).
The CAP is now a shared competence between the European Union and the member states (art 4 TFEU) for the agriculture and the fishing. The biological resources of the sea remain the exclusive competence of the EU.
Furthermore, it is liable by the ordinary legislative procedure.
The European Commission powers is administrated by the EU Council and the European Parliament particularly for the execution measures of the CAP.
The CAP budget is now decided by the EU Council and the European Parliament.
The debate on the CAP reform (20102013)
At the end of 2010, the European Commission decided to implement an action plan on the CAP future named « the CAP towards 2020 : food, natural resources and territory the challenges of the future ». This project will be studied and negotiated by the European Parliament and the EU Council.
Besides, in the end of 2011, the European Commission chose to orient CAP measures toward an ecological dimension particularly owed by the durable and rural development for the CAP.
In 2013, the UE introduced essential principles for the CAP
The direct payments for farmers among 30% will be repaid for the farmers who are a durable agricultural way
The durable and rural development
The common market organization who will be control by the European Commission during crisis period
The financing more equitable by country and by farmer.
It generates obligatory measures like payments decrease for farmers who have big exploitations and like payments supplementary for beginners farmers.
The reform of the new CAP 20142020
This reform was obligatory to answer at the programming several years obligatory since 1999, the precedent programming was 20072013. The reform of the CAP 20142020 was coming into force in 2015 and supported on the previous reforms principally the principles of the CAP determined in 2013.
The CAP structure is unchanged. The first pillar is determined by the direct payments and the common market organization finance by the UE (1% of the European GDP). The second group of the rural development measures which are financed by the UE and the member states. On a budget of 362, 8 billion of euro for the period 20142020, 278 billion of euro will be devoted to the direct payments and 85 billion of euro will be devoted for the rural development.
The new objectives are to allow a better equity between member states by standardize the amounts per hectare at regional level for the farmers and not based on a historical dimension. But also to set up environment practices, obligatory and identical for all the member states.
Impact in France
The new objectives of this reform have generated a decrease of direct subventions for France which is actually 7,5 billion of euro for the period 20142020 and was 9,3 billion of euro during the last periods. The French government implemented a breeding support plan the 22th July 2015 to answer of the agricultural crises problems.
According to the speech of Manuel Valls the 22th July 2015, the first Minister of the France «The livestock sector is going through a particularly difficult period that puts farmers strain and that does not leave indifferent compatriots».
According to Stéphane Le Foll, the agriculture, the agrobusiness and the forest minister in France, we can distingue three agricultural crisis. For beginning, the swine crisis bound in the Russian embargo. The second crisis is in the bovine environment where the breeder can not cover their production costs. And the last one, is the milk market, the producers are in a more competitive market in the Europe. The milky quotas are stopped in 2015. This breeding support plan represent 600 millions of euro and implement 6 axes
The rectification of prices
The restructuration of the bank debts and the suppliers debts for farmers and breeders
The reduction and the adjournment of loads
The development in different sectors
The development of market for the export
The improvement of the competitiveness of French sectors.
Further to this programming into several years 20142020, we can wonder how the CAP will evolve and how the CAP will be interpret in the EU member states in particularly in France.
Evolution du budget de la PAC en milliards € et de sa part dans le budget européen
Expenses of the CAP – billion €
% of EU budget
1980 to 2020 Sources: Institut national d’études supérieures agronomiques