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The official arguments for the CAP

by Jerome a Paris Fri Jul 15th, 2005 at 11:54:38 AM EST

Dominique Bussereau, the French Minister for Agriculture, publishes a tribune in the Financial Times this morning to defend the concept of CAP. This is a smart course for him to take, as it avoids the discussion of some of the specifics, which can be a lot harder to defend, and it does answer to some of the more specious arguments that have been brought forward against CAP in recent weeks.

His text below, with additional comments by me. For further background on my own position on CAP, see this earlier post (President Chirac, I beg you), as well as this one (Some CAP facts and figures) .

CAP is an inexpensive way to safeguard our future

What a bitter taste was left in the mouths of all committed and responsible Europeans at the end of the latest discussions on the European Union budget. Our continent was divided just as it faces decisions crucial to its future: for example, on trade at the World Trade Organisation and on security, particularly in the battle against terrorism. Looking inwards, Europe has to address social cohesion and regional development.

The division is all the more serious because it concerns the only integrated European policy – the Common Agricultural Policy. This has been turned into a scapegoat for wider problems. The CAP is one of the symbols of Europe’s many achievements: it has allowed the continent to regain food self-sufficiency and guarantee secure farm prices and genuine food trace ability and safety for consumers. The 2003 reform of the CAP demonstrated the EU’s ability to adapt to a changing economic environment and was hailed as a significant step forward by all member states, including the UK.

That's one of the facts conveniently forgotten these days by Blair and the other British commentators on this topic: the agricultural budget limits for 2007-2013 were agreed unanimously by the EU members in 2003, i.e. less than two years ago. So asking to start renegotiating this is akin to reneging on your commitments. That has been one of the big arguments of the Germans ("we usually keep our word") in this debate.

Conversely, the UK rebate beyond 2006 has not been discussed and can thus be seen as fair game. Of course, things change and it is not illegitimate to propose a global deal that would include the CAP and the rebate - it is even certainly politically necessary - but it is really specious in my view to argue that the CAP budget should be reformed first. It was, less than 2 years ago.

France stands ready for further reform of those aspects of the CAP that need to be changed. But prejudice must be set aside if we are to engage in a serious debate. And the first thing to do is to set out the facts. In my view, the current attacks on the CAP rely on three main errors.

One: the CAP is said to be very expensive and wasteful. The reality is very different. It is the only European policy totally funded by the EU and not by individual member states. To compare the budget for agriculture with those for other sectors, you need to consolidate expenditure at EU and national levels. Taken together, Europe and the member states spend less than 1 per cent of their collective budget on agriculture, compared with 2 per cent on research. If the Lisbon objective of allocating 3 per cent of EU money to research were met, the EU and its member states together would spend about €785bn on research compared with the €305bn for agriculture under the Luxembourg presidency’s proposals. We spend far less on agriculture than on research.

This is also a very valid argument. If we want Europe to spend more on research or other things than on agriculture, then we need to give powers to Europe to do that - and the corresponding budget. It's silly to refuse to give Europe powers and then to complain that Europe does not do enough. That only leads to the unraveling of Europe, which is why most continental Europeans are suspicious of British proposals that seem to only go towards less Europe, never towards more. The CAP was built as a really European policy, and it has the corresponding budget. R&D is not a European policy, and does not have the corresponding budget.

Furthermore, Europe is able to provide its citizens with products of proven quality. The independence of our food supplies allows us to establish our own health standards. The two most recent big health crises (mad cow disease and foot-and-mouth) started in the UK and cost the EU between €5bn and €10bn. They are a reminder of the importance of traceability.

An easy dig at the UK there, but the point is that the CAP is slowly (oh so slowly!) been reformed to take more into account health and environmental criteria, which is a good thing, and certainly a trend which we should encourage - against industrial agriculture.
Food self-sufficiency does not mean abandoning openness, strategic trade partnerships or solidarity with the rest of the world. Europe is not a fortress using the weapons of protectionism and unfair competition against developing nations. Europe’s efforts in favour of development are genuine. We have a great track record going back to the first Lomé agreements in 1973. The EU is now the developing countries’ number one customer and the first to defend them in WTO negotiations. The EU alone imports more from the Africa, Caribbean and Pacific regions and from the least-developed countries than all the other developed countries put together.

Again, a little known fact: the CAP is not discriminatory against the poorest countries, most of which have some form of open access to the European agricultural market, but against the intermediate countries, especially those of the Cairns group - Australia, Argentina, Brasil and the like, which have been arguingtheir case loudly in recent years, with some success. One of the ironies of the CAP is that, were Europe to end its current semi-protectionist regime, the losers would mostly be the farmers of the poorest countries which would not be able to compete against the efficient industrial agriculture of Brasil and Australia. (Of course, if you go into the details, there are lots of exceptions and special regimes, and many CAP rules are certainly detrimental to the poorest farmers in some sectors. But the overall point stands).

Three: it is claimed that agriculture is a thing of the past. It is not. It is an investment for our children. In our mostly urban societies, agriculture is essential as the leading steward of the environment. It has a huge role to play in curbing the greenhouse effect and great potential, particularly with the advent of “green chemistry” and bio-fuels, for developing environmentally-friendly products and reducing the use of fossil fuels. With the foreseeable exhaustion of these sources of energy, agriculture is bound to play an even more important role in the responsible management of the environment.

Biofuels are discussed currently in another thread started by DeAnander (Limits to Substituability - BioFuels) where the conclusion seems to be that this is really not a good idea, and I am personally very skeptical of such proposals. As to farmers as "stewards of the environment", I think it's a really good idea, but it is not really happening yet, and the CAP is certainly making only a weak effort in that respect. But this is certainly something that needs to be pushed.

It is true that the CAP now accounts for 0.4 per cent of European gross national product. But it benefits 100 per cent of the EU population. It is a forward-looking policy, constantly adapting to changes, as shown by the many reforms it has already undergone.

This is why, in France, Dominique de Villepin’s government is convinced that agriculture and the CAP remain a tremendous asset for today’s Europe and an essential investment for the future.

I'll conclude with the points I made in the previous CAP diary:

The reasons that I am personally favorable to a big reform of the CAP are:

  • the impunity that farmers have in France. They can flaunt rules (especially environmental ones), they can riot and break public buildings and do various illegal acts and are never punished for it, and this is simply not tolerable; this is especially important as it becomes ever more important to enforce environmental and sanitary rules;

  • France wastes a lot of its political capital in Europe on defending the CAP blindly, when a little more public and private flexibility would go a long way to reestablishing its - much needed from my perspective - leadership on other topics;

  • the policy of favouring agrobusiness over small farmers needs to be changed, and this is not especially a French problem;

  • similarly, all policies that distort international trade to the detriment of the agricultures of developing countries needs to be scrapped as much as possible.

You are a one-man-'bust-the-anglocentric-worldview'-band (if my punctuation doesn't let me down) and I find your views always interesting and often convincing. However...

The British opposition to the CAP is largely based upon the simple fact that the French are the single biggest benefactors. If it were anyone else there would be no argument! It is partly a visceral distaste for giving the French money, and partly a feeling of distrust that France, as the traditional driver of the EC, has set up a nice little earner for itself.

All the other arguments, sound though they may be, hit this wall of distrust. In other words, it is surely conceivable that you could have all these benefits of the CAP without the French receiving so much more money than Britain. In which case I doubt Britain would object at all.

Your point about the recent renegotiation of the CAP v. renegotiating the British rebate is unfair. Britain would have been happy enough with the outcome of the CAP negotiations insofar as it received a rebate in recompense, but not otherwise, for the reasons mentioned above.

by Inselaffe on Fri Jul 15th, 2005 at 12:43:04 PM EST
Look, I agree that a viable deal will necessarily involve both the rebate and the CAP, and that the recent debate has been triggered as follows: Chirac loses referendum - tries to find a distraction through Brit-bashing (on the rebate) - Blair responds with CAP...

Your point about the French receiving the most money is right but (i) that's been the deal with the EEC right from the start, and it's the UK that joined something that was guilt, not the other way round and (ii) it was and still is the political price to get the French to accept free trade within Europe, which is worth a lot to the UK. (I know that it is worth a lot to France as well, but this is sadly not a point that can be "sold" in France).

So this debate, which has not changed in 30 years, goes on while we could be doing other things...

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

by Jerome a Paris (etg@eurotrib.com) on Fri Jul 15th, 2005 at 12:59:57 PM EST
[ Parent ]
Two thing jump out to this Anglo-centric ("everything I know about Europe is what I read in The Economist") American.

First, what about Poland? Isn't their agricultural economy pretty big? Do they get the same CAP funding that France gets?

Second, the story in the U.S. press is that Europe is a lot worse than us from the viewpoint of shutting out third world competition. I don't know how to evaluate this, and Bussereau's comments seem kind of self-serving. Are there numbers from the U.N. or World Bank or somebody "neutral" to support his assertion?

by asdf on Fri Jul 15th, 2005 at 01:42:53 PM EST
Poland, like the other accession countries, will get less help per farmer than the "old" members did. They start at 25% of the equivalent, and it is set to grow to 100% of the corresponding help by 2013. This also reflects the fact that standards of living are still lower in these countries.

The revenue of farmers in Poland has increased by about 50% since they joined the EU; more interestingly, Polish ag. exports to the rest of the EU have skyrocketed (whereas there were fears that Western "subsidised" products would overwhelm the Polish market).

As regards US arguments about EU farming, don't forget that the US is just as bad an offender in terms of ag subsidies, and any accusation thrown around is usually self-serving and partial (the same holds true on the EU side, of course). I reply on poor countries below.

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

by Jerome a Paris (etg@eurotrib.com) on Fri Jul 15th, 2005 at 03:20:29 PM EST
[ Parent ]
I'm skeptical about the claim that the CAP doesn't hurt developing countries. If this is true, why did many Africans during and prior to the G8 point to European and US agricultural subsidies as one of the biggest barriers to African economic growth?

This is the crucial issue for me. If agricultural subsidies in Europe (through CAP) and the US are hurting the developing world, they should be repealed. I really don't care whether France or the UK or the US or Poland or Spain or Australia or Brazil do better or worse, because even the poorest of those countries are not facing mass starvation and economic stagnation.

by Cascadia Progressive on Fri Jul 15th, 2005 at 03:09:30 PM EST
The EU has made a lot of effort in recent years to stop the worst effects of its ag subsidies on world markets, and there are real policies to open the EU to the poorest countries.

  • no more dumping of surplus production on the export markets with massive subsidies. Export subsidies have been really reduced (see the graphs in my earlier diary "facts and figures about the CAP")

  • subsidies have been mostly decoupled from surface or volumes, so as not to encourage extra production - they are now more and more linked to environmental criteria and that "stewardship" fluff and do not encourage production

  • the EU is the biggest importer by far of agricultural products

The USA under Bush have gone the other diurection, with new production-linked subsidies. The most egregious example is that of cotton. Sugar is also a bad offender, but there both the US and Europe are guilty.

At least the EU is going in the right direction. Not fast enough, but at least in the right direction.

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

by Jerome a Paris (etg@eurotrib.com) on Fri Jul 15th, 2005 at 03:26:36 PM EST
[ Parent ]
Not fast enough, but at least in the right direction.

Isn't this the EU's official motto?
by Colman (colman at eurotrib.com) on Sat Jul 16th, 2005 at 01:51:19 PM EST
[ Parent ]
fuel prices aren't going to go down, unless there is a new superfuel oil substitute waiting in the wings.

therefore training african farmers to grow luxury crops for the first world gourmets is a bad idea, because they would be better off feeding their own people with staples (at least first), than growing rambutans that then sell for E5 a kilo in the supermarkets.

on top of this, if CAP is reduced, expect a migration of country people into the cities to raise unemployment there higher, and the woods taking over hundreds of acres of fields which were claimed by generations of hard work, and will be costly in manpower to reclaim, if and when there is less or no fuel to power heavy machinery to help.

here in italy CAP is blithely abused, with acres of sunflowers drying on the stalk before making seeds, because farmers are paid to plant, and then whatever happens they get the money.

what's the point of openly flouted programs like this, unless they are followed through?

especially with the only local biodiesel plant idle, due to politics. (sunflowers detoxify soil, and provide oil for biodoesel, as well as salads and frying!)

there are many sides to this, and the green in me says it doesn't matter if the wilderness takes over hundreds of farms, because the water table will get a rest, and most ag. was done with chemicals anyway.

the air is so polluted in many parts of europe and the sprawling woods and scrub will at least help clean the air and increase wildlife, which is sadly so depleted through the use of harmful chemicals.

but then i see how much energy it takes to keep the woods from invading my fields, and my respect for the position which says keep subsidies. they should be channeled to small farms, encouraged to grow a variety of crops.

it's easy to see the injustice of dumping excess in the name of generosity, which then puts third world small farmers out of business. it's clumsy and creates as many new problems as it solves others.

ideally i think every country should keep in production enough farmland to feed its own people, then free trade any excess on the world market.

the usual bullshit of taxmoney going to already rich polluting agribiz is disgusting, damaging, immoral and should stop forthwith.

there should be solid CAP support for staples, and to keep the youth productively employed in the countryside, otherwise we risk shantytowns, and idle, bored youth, all to prone to weird stuff like cults, religious extremism etc.

much of the stigma of rural life would cease if broadband and good educational offerings were ubiquitous. rustics would not necessarily be less informed and in touch than their urban cousins; there should be also support given to restoring abandoned old stone farmhouses, which are falling down, and are a national patrimony.

of course, biodiesel, wind and solar should also be heavily subsidised, until we reduce europe's bloated ecological footprint. we might feel like saints when we look across the pond, but the truth is except for in germany, spain and denmark, alternative energy still has a hard row to hoe here, with heavily vested interests 'invisibly' blocking progress, while spreading cheery disinformation about peak oil and dependence on fossil fuels in general, especially those from the middle east.

isn't war on terror is just a polite name for 'resource grab'?

we need a crash program to use the last of the oil to create as much alternative sustainable technology, and prepare to do without 90% of the gratuitous guzzling we do now.

if we can make the curve ahead without coming unglued on many levels, i expect we'll have a world in many respects superior to the one we presently inhabit. it depends so much on how many of us pull our heads out of the sand and commit now to change, instead of waiting for governments to ignore fatcat lobbyists, and change policy to use our taxes to further independence and conservation, encouraging responsible attitudes to growth.

what we have now is pathetic tokenism compared to what is needed, and the situation is too stagnant.

on a different, but harmonic note, am looking for like-minded neighbours to buy a restored cottage with an acre of arable land, with bearing cherry, fig and chestnuts (marrons), 500m of woods distant from my main property, where i have restored a house, dug a well, installed a solar pump, and piped water down to the cottage also. it adjoins a very large chestnut forest, with much fuel for a woodstove, and the water, as is usual under chestnuts, is of high quality, pure and drinkable.
i plumbed the cottage so the woodstove heats the water and radiators.
i would be happy to share my tractor and tools to help someone become self-sufficient, if i find the right person(s).

this is in umbria, italy.

anyone interested can write me off list at cosivia-at-libero.it.

i suspect mother nature will give us the lesson we resist at our peril.

preparation is everything, i believe.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat Jul 16th, 2005 at 07:40:49 AM EST

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