The CAP and European integration: A quick look in the rear-view mirror in light of the forthcoming elections

Tuesday 16 April 2019

Ahead of the upcoming European elections which promise to be more contested and more critical than ever for European integration, it is interesting to look at the oldest European common policy and the role it played in the development of the European Union (EU). This article focuses on the changes made to the Common Agricultural Policy (CAP) since its first implementation as well as its impact on European integration.

Developed by the six founding Member States of the European Union (EU) - at the time called the European Economic Community (EEC)[1] - the CAP was established in 1962. Since then, the agricultural policy has been at the centre of European concerns with more than 70% of the EU budget allocated to it in the 1980s. This percentage has fallen to less than 40% in the last years and is expected to drop below 30% for the period 2021-2027.[2]

Since its inception, the CAP has been the subject of many debates closely linked to European integration. Its implementation in the early 1960s was part of the Common Market and its main objectives were to guarantee fair prices and good standard of living for farmers, stabilizing markets, increasing agricultural productivity and providing food security to European citizens.[3] However, it can be said that the CAP slowed European integration as it was one of the main reasons that delayed UK’s membership by a decade. Indeed, France twice vetoed the UK’s accession in the 1960s, fearing to open the Common Market to the British.

The UK is just one example of the importance of the CAP in the integration process. Ireland and Denmark, both of which joined the EU in 1973 at the same time as the UK, wanted to enter the EU in order to develop their agriculture and gain access to new markets.[4] With regard to southern European countries, the European agricultural sector and mainly its guaranteed agricultural price system, attracted them. Indeed, Greece, Spain and Portugal had an underdeveloped agricultural sector at the time, and accession to the EU was the perfect opportunity to reduce the economic gap with EU Member states. Once again, the CAP proved to be a driving force for these countries joining the EU in the 1980s.

Despite EU enlargement, the CAP had to be rethought as problems such as overproduction, subsidised exports and the accumulation of stocks financed by the EU were no longer viable. Therefore, the 1992 reform attempted to solve these issues by moving from a price support to a direct support system. While the first system aimed at guaranteeing high prices to farmers, particularly to protect them from imported products, the second system was based on direct income support.

At the same time, Northern countries started accession negotiations with the EU. In that case, agriculture was one of the most difficult issues to deal with. Indeed, agricultural prices were much higher in Northern countries than in the rest of the EU and the European Commission had to compensate for this gap by providing direct income support to farmers.[5]

In the early 2000s, the CAP needed a radical reform in order to face new realities such as rising environmental concerns, the inadequate aids system, and the upcoming enlargement to ten new countries, some of them with a quite important agricultural sector. In order to do so, a second pillar was created under the “Rural Development” label. Overall, the 2003 reform aimed at liberalising agricultural markets, decoupling direct aid from production and reducing prices support. Even though it was not the only factor at stake, this time, it was the CAP that had to be adapted in view of the 2004 enlargement.[6] The 2013 reform saw the introduction of the greening in the first pillar. The various environmental measures required - crop diversification, permanent grasslands, areas of ecological interest - also served to justify the importance of the budget allocated to the CAP.

As outlined in this article, whether it was positive or negative, the CAP has always played a significant role in the development of the EU. However, more recently, European integration seems to have stalled. Indeed, the rise of Euroscepticism embodied by Brexit reflects the difficulties faced by the EU in convincing citizens. Even tough European agriculture was not at the forefront of the Brexit campaign, the UK’s net contribution to the budget and the high share of this budget allocated to the CAP indirectly played a role in the outcome of the vote.[7]

Parallel to this, CAP evolution also reflects the existing disparities within the EU. First seen as a genuine driving force for European integration, the CAP seems to have run out of steam over time. In this framework, the ongoing discussions about the future CAP are a perfect opportunity to reverse the curve and foster European agriculture.

Despite the undeniable link between the CAP and European integration, it is common sense to expect this link to be less important in the future. In fact, the EU is currently exploring other sources of integration with more funding for cohesion and social policies as well as defence and security matters. These issues have taken precedence over other policy areas such as agriculture.

[1] For the sake of simplicity, the term “EU” is used in the article even for the period prior to the Lisbon Treaty







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