In the current debate on the future of the CAP, Rudy Rabbinge’s appeal for a modern and competitive agricultural sector is easy enough to endorse. Obviously the CAP has to look to the needs of the future. But how the EU tackles this ambitious task tends to be contentious, stuff of the real debate whether the reforms should be radical or conservative. Rabbinge favours a radical approach; the CAP has to be born again, and previous attempts to move it in line with the times are dismissed as superficial.
Yet the CAP has not stood still since its creation half a century ago. Like other EU institutions it has evolved, retaining its original objective of a stable farming system but meeting new and related demands, such as respect for the environment. To dismiss previous reforms as “superficial” is to ignore important changes that have been made, such as increased funding to rural development and paying farmers directly instead of subsidising their products. These reforms have improved the CAP’s legitimacy, as confirmed by a 52% approval in a Eurobarometer poll in 2007.
But this should not prevent further reform, and the current debate is dominated by money. The CAP still costs about 40% of the Community budget. Unlike other EU policies, the CAP is almost exclusively funded by the Community. The 2003 Sapir Report on the EU economy demonstrated that, taken together, Community and national expenditure for policy areas such as social protection and education are substantially higher. Nevertheless, pressure to reduce the CAP budget will no doubt remain strong.
Rabbinge proposes five “pillars” for reforming the CAP. They deal with important issues, yet involving them in a future CAP risks complicating the policy and over time would affect its legitimacy. The CAP should not be overloaded with matters such as restructuring land use or food systems.
How then should the CAP look after 2013? Although reform must come, the basics are already in place. A common policy with its regulatory framework must be obtained throughout the Union. Otherwise national governments would continue to support their agriculture in one way or another, leading to internal market distortions. The CAP should set a regulatory framework at EU level, but allowing flexibility to member states that may require additional co-financing.
Agriculture has as far as possible to be tied to market forces as far as possible. For long-term economic sustainability, production and investment decisions must respect consumer demands. Competitiveness has to be stimulated by R&D and innovation, with metropolitan agriculture worth exploring. With agriculture vulnerable to weather/climate farmers should be protected against sudden loss of income, with public funds as a back-up should private insurance fall short.
Unlike other economic sectors, agriculture provides goods and services which justify support by public funds because farmers are not solely rewarded by the market. European farmers are often seen as guardians of open spaces and rural diversity, and find themselves confronted with a competitive disadvantage due to strict standards for the environment and for food quality. But the current level of public support is untenable. In future, regional flat-rate payments should compensate for minimum environmental and safety requirements and for basic land management. Additional payments could be envisaged for specific needs. If farmers are to be asked to contribute to European food security, sustainable development, food safety, rural development and so on, the Community budget should be willing to support them where the market does not.