This paper deals with the following questions: What is the significance of the Common Agricultural Policy (CAP)? How did the CAP develop in the course of time and which milestones left their mark on the regulations of today’s policy? What are the current problems and which challenges does the CAP have to respond to in the future? How will the development continue?
As a researcher the topic is of great interest as it concerns every European tax payer, the environmental change depends in certain aspects on the policy of the CAP as well as the quality of the European agricultural products. It’s a prevalent topic which not every citizen is fully aware of and whose effects should be examined more in detail.
Agriculture has many important needs to satisfy in the population and to ensure a wide range of social tasks: food production, production of biomass for power generation and material use, design and maintenance of cultural landscapes and biotopes, determination of animal welfare or the impact on social and economic structures.
In order to promote these societal tasks of agriculture, the politics should set the framework in such a way that the economic activity of the farmers fulfills common welfare purposes at the same time. This is done by specifying duties as well as by creating incentives. In this regard the CAP of the European Union (=EU) has a great influence. In this context the time has come again for the EU commission to set the Multiannual Financial Framework (=MFF) for the period from 2021 to 2027.
One of the biggest expenditures with about 54 billion euros a year is the CAP which is nowadays hardly criticised for promoting poverty and food security in developing countries through European subsidies. Interventions related to the agricultural policy cause a dilemma due to the fundamental conflict of interest between producers and consumers. On the one hand, the abolishment of the CAP apparently does not have a lot of negative consequences – according to the Joint Research Centre of the European commission the consequential decline of the agricultural production would be insignificant. On the other hand, the CAP does not have a lot of effects that harm its development, but a danger is prevalent that it might fall back into old patterns by e.g. using payments coupled to the production.
Table of Contents
1 Introduction
2 The Common Agricultural Policy
2.1 Definition
2.2 Two-pillar system
3 Historic development
3.1 Initial stage: 1950s to 1960s
3.2 Period of crisis: 1970s to 1980s
3.3 MacSharry reform: 1990s
3.4 2000-2013
4 Current challenges
4.1 2014-2020
4.2 Future prospects
5 Conclusion
Bibliography
Objectives & Research Topics
The paper examines the historical development, structural mechanisms, and contemporary challenges of the Common Agricultural Policy (CAP) of the European Union, aiming to evaluate its effectiveness in balancing producer interests, social welfare, and environmental sustainability.
- Historical evolution of the CAP from the 1950s to the present.
- Mechanics of the two-pillar system and its financial structure.
- Critique of current market orientation and direct payment schemes.
- Environmental impacts and the effectiveness of 'greening' measures.
- Future requirements for a socially and ecologically viable agricultural policy.
Excerpt from the Book
3.2 Period of crisis: 1970s to 1980s
Before the 1970s the majority of agricultural products were imported due to the situation of the post-war years so the domestic price could be raised with tariffs. In the year 1972 structural measures as support of deprived regions, the modernisation of agricultural holdings, guidelines for the early retirement of farmers, retrainings or vocational trainings were addressed. During the 1970s the agricultural expenditures reached two-thirds of the EU-budget and market regulation expenditures increased, but through increased contributions of member states the EC could maintain a balance to the payments. Purchases of new technology as well as chemicals, known as the contradictorily used term of ‘green revolution’, triggered off a rapid productivity growth of agriculture. New and more planting and harvesting machines as well as fertilizers, herbicides and pesticides were purchased and used to increase the desired output. The technological process led to an excessive increase in production which is why the agricultural sector turned into a net exporter of most farm products.
The domestic demand did not grow exponentially so higher export subsidies had to be paid by the EC to ensure the survival of farmers. In addition, the so-called ‘supply problem’, meaning the production highly exceeded the consumption, arose. In 1984 the symptoms were tried to be cured by setting quantity regulations and production quotas, but the overproduction did not only lead to a supply problem, but also to the so-called ‘wheat, beef and butter mountains’. This term was used in the media to describe the surplus production as well as the storage or disposal problem triggered by it. The temporary storage forced the EC to buy up and sell the products within the EC or dispose a large amount of rotted products and the export subvention provided an incentive to sell the surplus on the world market. As the EC sold the surplus at subsidized prices or rather buying it high domestically and selling it at cheap prices abroad, dumping created a foreign trade problem.
Summary of Chapters
1 Introduction: This chapter outlines the societal tasks of agriculture and introduces the Common Agricultural Policy (CAP) as a major financial component of the European Union.
2 The Common Agricultural Policy: The chapter defines the CAP, explains its institutional financing, and details the functionality of the two-pillar system.
3 Historic development: This section provides a chronological overview of the CAP's evolution from its post-war inception to the various reforms implemented between 1990 and 2013.
4 Current challenges: The chapter focuses on the 2014-2020 period, addressing current reform efforts, environmental "greening," and future prospects for the policy.
5 Conclusion: The conclusion synthesizes the development of the CAP and highlights the persistent tensions between political, economic, and environmental objectives.
Bibliography: A comprehensive list of academic literature and official sources utilized for this study.
Keywords
Common Agricultural Policy, CAP, European Union, Two-pillar system, Direct payments, Agricultural reform, Greening, Sustainability, Market regulation, Farm income, Rural development, Food supply, EU-budget, Structural measures, Land management
Frequently Asked Questions
What is the primary focus of this paper?
The paper provides a comprehensive analysis of the European Union's Common Agricultural Policy (CAP), examining its history, financial structure, and the efficacy of its various reforms in addressing modern socio-economic and environmental needs.
What are the central thematic areas covered?
The study covers the definition and financing of the CAP, the development of the two-pillar system, historical milestones like the MacSharry reform, and the contemporary challenges involving environmental sustainability and subsidy distribution.
What is the core research goal?
The goal is to determine how historical developments have shaped current CAP structures and to identify necessary future steps to resolve existing issues, such as market distortions and inequitable payment distribution.
Which scientific methodology is applied?
The author uses a deductive approach, interpreting current literature to systematically analyze the policy's evolution and provide a critical evaluation of its impacts.
What is addressed in the main body?
The main body is divided into a theoretical section defining the policy, a historical section tracing its evolution, and a critical analysis of the current challenges and future requirements for the CAP.
Which keywords characterize this work?
Key terms include Common Agricultural Policy (CAP), two-pillar system, direct payments, greening, EU-budget, and rural development.
What were the specific consequences of the "green revolution" in the 1970s?
The green revolution triggered a rapid increase in productivity through new technology and chemicals, which eventually led to significant overproduction, creating surplus "mountains" of commodities like wheat, beef, and butter.
Why is the current CAP criticized?
Critique centers on the lack of transparent, effective, and target-oriented application of funds, the focus on large landowners over small farmers, and the questionable environmental impact of the "greening" measures.
- Quote paper
- Anonym (Author), 2018, The Common Agricultural Policy (CAP). The historic development and current challenges, Munich, GRIN Verlag, https://www.grin.com/document/1129931
