CAP consultation has to be about what type of food we want

Brussels Insight - the CAP review must support farming properly if the EU continues to insist on farmers producing to a standard not required elsewhere.

Phelim O'Neill

19 March 2017

CAP consultation has to be about what type of food we want

European Commission headquarters, Brussels

The Common Agricultural Policy (CAP) has delivered production of affordable food and supported the farming and rural community for most of the six decades of the EU’s existence. At the beginning, it was confined to a limited trade arrangement between six European countries, growing to nine when Ireland, Denmark and the UK joined in 1973. Further expansion brought the EU up to 15 and finally 28 members with the collapse of communism in eastern Europe. The community is now at an advanced level of integration that has brought its own problems, best demonstrated by the UK deciding to leave putting a premium on national sovereignty.

The Common Agricultural Policy (CAP) has delivered production of affordable food and supported the farming and rural community for most of the six decades of the EU’s existence.

At the beginning, it was confined to a limited trade arrangement between six European countries, growing to nine when Ireland, Denmark and the UK joined in 1973. Further expansion brought the EU up to 15 and finally 28 members with the collapse of communism in eastern Europe. The community is now at an advanced level of integration that has brought its own problems, best demonstrated by the UK deciding to leave putting a premium on national sovereignty.

For farmers in Ireland and across Europe, the EU is all about CAP. The policy in its various guises has supported farming and a system of production that is unique to the EU. It is based on the precautionary principle, which means that if there is any doubt about the safety of a technology or method, then it is avoided.

Growth hormones

This is best illustrated by the EU ban on growth-promoting hormones in beef, which the EU made illegal in 1988 despite having been previously accepted. In the process, any beef that was offered for sale in the EU was also subject to being produced without the aid of growth promoting hormones. This was challenged at the WTO, which act as arbiter on conflicting matters between member countries around international trade. The WTO found that the EU ban was illegal and the US was authorised to impose tariff sanctions on EU exports to the US to the value of the business lost by the US as a result of the EU rules. A subsequent deal was made between the EU and US on this issue that is currently being revisited by the US cattle industry.

The precautionary principle and enhanced welfare and environmental standards may be noble, but they come at a cost to farmers

It is clear from any analysis undertaken on global farming systems that the EU demands more from its farmers on animal welfare and environmental controls, as well as what can be used in production of livestock. The policy on the use of GM technology also illustrates how the precautionary principle restricts arable farmers in Europe using the latest technology while food products produced with non-EU grain are freely available for sale in Europe.

The precautionary principle and enhanced welfare and environmental standards may be noble, but they come at a cost to farmers. If this is recognised and paid for by the CAP, then it is a fair deal. However, this isn’t strictly the case, with the CAP expecting EU farmers to move to a situation of global competitiveness while not allowing them to use the tools that make agriculture outside the EU more competitive.

What choice will the EU make?

Since 2005, the EU has moved to non-production-related support (decoupling) and removed export refunds that assisted the marketing of expensively produced EU food outside the EU. This all leads to a production system that falls well short of the global standard for competitiveness. Now, as we are in the middle of the latest CAP review, there is a consensus from all sides that the current model isn’t delivering for either farmers or environmentalists. Commissioner for Agriculture Phil Hogan has stated on numerous occasions his ambitions for protecting EU farmers and that they are the people best placed to deliver the environmental controls that are wanted.

Budget

If that principle is accepted, we then have to look at the budget and be prepared to invest in farming in order to deliver the EU food production system that is demanded and the environmental controls that are expected. That will mean a rolling back of the move to making EU agriculture compete on the world market that has been the direction over the past decade. The alternative model, of course, is complete deregulation. This approach is advocated by many in the UK including the former DERFRA minister, Owen Paterson, who believes farmers should be given complete freedom to farm. The other side of this coin is that they are completely exposed to the global market, with the UK open to imports from everywhere and no government funding.

This is the choice the EU has to make. Either it continues with the interventionist model in which it dictates production methods for farmers or it steps out and lets the market take its course. If, as expected, it is continuation of the interventionist controlled model, it has to be properly funded, not a slow death for farming, caused by bureaucracy to claim ever diminishing funds. If we want the model of production we have in Europe to continue, we must be prepared to invest in it.

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