In December 2005 the Government launched a "Vision for the Common Agricultural Policy", which was intended to stimulate debate and show how the Common Agricultural Policy should change in 10-15 years. This report examines the proposals and finds them a lost opportunity. The Government should have directed the debate towards scrapping the existing CAP and replacing it with a Rural Policy for the European Union. There should thus be a new Vision document, launched in a more subtle way so that allies for reform can be enlisted. The credibility of the document depends on the Government providing full and detailed evaluation of the impact of proposals on biodiversity, the environment, markets for agricultural goods and individual farm enterprises. This should be done by mid 2008. The long-term justification of the expenditure of taxpayers' money is the provision of public benefit. These public goods should be measurable and capable of evaluation.

After five years of debates, consultations and negotiations, the European institutions reached an agreement in 2013 on the Common Agricultural Policy (CAP) for the 2014-2020 period. The outcome has major implications for the EU’s budget and farmers’ incomes, but also for Europe’s environment, its contribution to global climate change and to food security in the EU and in the world. It was decided to spend more than €400 billion during the rest of the decade on the CAP. The official claims are that the new CAP will take better account of society's expectations and lead to far-reaching changes by making subsidies fairer and ‘greener’ and making the CAP more efficient. It is also asserted that the CAP will play a key part in achieving the overall objective of promoting smart, sustainable and inclusive growth. However, there is significant scepticism about these claims and disappointment with the outcome of the decision-making, the first in which the European Parliament was involved under the co-decision procedure. In contrast to earlier reforms where more substantive changes were made to the CAP, the factors that induced the policy discussions in 2008-13 and those that influenced the decision-making did not reinforce each other. On the contrary, they sometimes counteracted one another, yielding an ‘imperfect storm’ as it were, resulting in more status quo and fewer changes. This book discusses the outcome of the decision-making and the factors that influenced the policy choices and decisions. It brings together contributions from leading academics from various disciplines and policy-makers, and key participants in the process from the European Commission and the European Parliament.

Evidence taken before Sub-committee D (Environment and Agriculture)

The Environment, Food and Rural Affairs Committee criticises the European Commission's proposed sweeping reforms of the CAP that would see the current complex and bureaucratic system of direct payments replaced by one that could be even worse. These changes include a new tier of environmental conditions, with penalties for farm businesses that do not comply or fail to meet new criteria for 'active' farmers, farm size and number of employees. The Committee sets out the key principles the UK government should promote. The first objective of the CAP should be to maintain and enhance the EU's capacity to produce food with a significant degree of self sufficiency and, in the long term, less reliance on income support from the tax payer. The UK's future food security is threatened by the low profitability of its agriculture. More than half of UK farm businesses would be unprofitable without the support they receive through the CAP. The Committee concludes that direct payments have a place within the CAP for as long as business conditions in agriculture fail to deliver a thriving and profitable industry. The CAP must deliver a competitive and viable agricultural sector that produces safe and high quality food with a lower environmental impact. The UK should press for the EU to argue more strongly for recognition of environmental and animal welfare production standards within trade agreements. The committee also warns that the EU proposal for a multi-tiered single farm payment will require expensive new computer systems and auditing.

The 2003 reform of the Common Agricultural Policy marked the culmination of a gradual reorientation of EU farm subsidies from product support to direct income support. A mid-term "Health Check" of this reform is now underway, exploring what further adjustments may be required for the period 2009 to 2013. The Commission's proposals for short-term adjustments to the CAP merit broad support. The Committee is not convinced of the long-term justification for maintaining direct subsidy payments in their present form, and advocates a phased reduction in direct payments over the course of the next financial period beginning in 2014. A significant proportion of the funds released should remain earmarked for the CAP, but be spent on the rural development element of the policy rather than on farm subsidies. The report also addresses the challenges and opportunities that lie ahead for the EU agriculture industry. The sector is a significant contributor to climate change, but also vulnerable to its effects. Climate change may present a business opportunity for the industry, which is uniquely placed to deliver environmental services. Soaring global demand for many agricultural commodities has allowed some sectors of the European farming industry to prosper, while others are grappling with rising input prices and stagnant or falling output prices. Were supply shortages to ensue in future, the Committee expects that food scarcity would be a function of income rather than of production capacity. Those most at risk are consumers on low incomes in the developing world. Further trade liberalisation in the agriculture sector is supported, but if direct payments are withdrawn and import tariffs reduced-as the UK Government advocates-then the production standards that EU producers of agricultural goods are obliged to meet should be re-examined.

This book is the first to document the reform of the EU's Common Agricultural Policy (CAP) and to analyse the political and economic factors which determined the outcome of the negotiations. The policy (non-)reform will affect the world's global food security and agricultural ...

Work of the Committee In 2007 : Third report of session 2007-08, report, together with formal Minutes