If the largest, most productive. intensive monocultures get their larger production from topsoil depletion and petroleum-based fertilizers, I don't see why it would make sense to subsidize them at all. They don't pay for the externalities.

guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper

Initially, the goal was cvlearly the first one, and that's how the industry organised itself.

Since the 80s, the various reforms have tried to switch to the second model, but it still has some ways to go...

In the long run, we're all dead. John Maynard Keynes

Field crop agriculture is only "more productive" for certain crops under certain conditions.  Generally foodstuffs with a high bulk low per-unit cost: potatoes, grains, some meats, and etc fall here.  But has been noted the increasing prices for petro-chemical products: fuel, herbicides, pesticides, fungicides, fertilizers, is starting to impact this advantage.  (As Jerome's expertise is in this area I defer to him for specifics and analysis.)  I submit, however, the current practices are not sustainable.

Horticultural agriculture can be more productive for certain crops under certain conditions.  These crops: vegetables, some meats, fruits, nuts, and etc, have a low bulk high per-unit cost.  (See below for more discussion.)  

A change to CAP affects and is affected by farming practices, land availability, land ownership patterns, time to market, consumer preference, the capital input situation, competition structure(s), internal and external goverment agricultural and economic policies, world market and current year prices, goverment social policies, entrenched interests, the local, regional, and national tax structures, the local, regional, and national economic climate, weather, climate, agricultural business management techniques ... off the top of my head.  

This is not an attempt to overwhelm the reader but, rather, to indicate the complexity of the problem.  Too often policies are implemented focus on the near term without considering various other sub-systems (Agents) that also impact or are affected by the policy and the result(s) of the policy.  These policies, implemented with the best will in the world, fail, accerbate the problem, or, worse, have adverse unintended consequences.  (I doubt the instigators of CAP sat around a table and told each other, "We're really going to stick it to those bums in Mozambique.")  

Eliminating CAP, in one blow and without bridging policies, could destroy French agriculture in total and would certainly bankrupt some number of part-time and hobbyist farmers.  This last would directly affect the land ownership and land use patterns of rural France and, most likely, lead to an increase in land ownership by the larger agricultural entities as they are the ones with greater access to capital for land purchases.  

Further, one can predict resistence in the rural areas
as a potential policy change, and the potential affect, becomes known.

Returning to the major thrust of this post ...

The suggestion of moving from the high yield, high capital input cost, bulk commodity agriculture production (Field production) to low yield, high labour, high consumer value (Horticulture production) model is not a panacea however much it provides a interesting alternative worthy of further investigation.

Overall, the various "Back to the Land" movements of the 1900's were not successful because the primary impetus was 'Romantic,' sans economic consideration.  This is all well and good but if you have 10,000/month eggs you'd better have a market for 10,000/month eggs at a price keeping you in business.  Otherwise you've got 10,000+ eggs and a foreclosure notice.

Second, the investment in production assets (tractors, reapers, storage, feed operations, & etc) would be devalued by any change and access to capital and any loans outstanding on those assets would also be devalued.  Together this means a direct 'hit' on the current 'winners' of CAP.  There are political implications here which I can only note.  Access to capital to fund the purchase Horticultural oriented production assets would have to be provided.

Third, a demographic and economic study of rural Europe would need to be found, or done, to put any change in some context.  Without this knowledge we can speak only in generalities. (Perhaps Ritter can help here?)  

Anecdotal evidence, admittedly the worst kind, suggests a Horticultural model provides a mechanism for local production for local consumption, greater net economic return to the producer for the product(s), adds positive reinforcement for superiour land use practices, provides a better product, diversifies cultivar genotypes, increases economic activity in rural areas, and creates employment opportunities.  The potential impact on "The Third World" - obnoxious phrase - is unknown.  (To me.)  

Suggestion is not proof.  Potential is not guaranteed.  There are some factors overlooked and factors unexamined in this comment.  But I submit enough has been given to question the Keep-the-CAP-as-It-Is/Eliminate-the-CAP-Now dichotomy as the only policy options.

is preferable, but using extremes is not helpful!

enriching the already rich at the expense of the soil, and the africans, i believe is unproductive, at best, and outright corrup at worst.

ripping off the public to spread gm should NOT be happening.

the CAP should balance sustainabilty, good land husbandry, localised distribution etc, all anathema to the corporate mentality.

jetting vegetables around is so wasteful.

~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~