Political Pressures Build Over CAP Reform

The political pressures are building as we approach the next reform of Europe’s common agricultural policy. The European Commission will finalise its detailed proposals for the future of the CAP in the summer, with a view to decisions in 2012.

Of course the budget issue already looms large, with President Sarkozy insisting that the EU farm budget should be sustained at least at current levels beyond 2013, while the British (and probably Germany) will demand a major reduction. Agriculture Commissioner Dacian Ciolos has already outlined his priorities.

The CAP has always been a battleground of different aims and interests. The challenge is to reconcile conflicting priorities: security of supply, the wellbeing of the agricultural population, the impact on developing countries, protection of the environment and budgetary cost. There are no simple answers. The January 24 report to the UK government on the future of food and farming gives an idea of the complexity of the issues which confront us and how they interact with one another.

One surprise is how low a priority Ciolos gives to agricultural productivity.  It is now widely accepted that the world faces a global food crisis. Prices continue to  surge, global food stocks have fallen to the lowest level relative to demand since the mid’70s, natural disasters have destroyed crops and demand for food has grown as populations increase and living standards rise. The FAO forecasts that by 2050 the world will need 40 per cent more food, 30 per cent more water and 50 per cent more energy. Ciolos quotes a global increase in food demand of 50 per cent over the next 20 years.

Production is bumping up against the limits of sustainability. There are already questions over whether Spain and Greece will have sufficient water resources in the coming years to produce their tomato crops, while across the world rain forest is cut down to plant more maize for biofuels resulting in faster climate change and damage to global food production. The cure is worse than the disease.

One might think that global shortages would encourage European policy-makers to improve agricultural efficiency and so boost output.  There’s no sign of that. While the OECD-FAO Outlook sees the US, Canada, Australia, China, India, Russia and Latin America boosting farm output by 15-40 per cent between 2010 and 2019, it forecasts that EU production will grow by less than 4 per cent. That must mean a bigger reliance on imports, especially given the proportion of crops now devoted to biofuels, such as two-thirds of the EU rapeseed which turns fields golden in the spring.

Now that European agricultural product prices are largely determined by world markets rather than by market intervention and export subsidies, Commissioner Ciolos sees the main function of the CAP as rewarding farmers for “providing public goods which the market rarely rewards”, concentrating resources on “active” farmers rather than large landowners or corporations and providing a support framework to deal with market volatility.

It certainly makes good sense to ensure the viability of rural regions through direct support and to deal with market turbulence, but surely the CAP must not neglect the fundamental need to ensure security of supply in a rapidly changing world.

Increased agricultural productivity depends heavily on the application of science, a fact which  is well recognised by Commissioner Ciolos. The Commission plans an Innovation Partnership for Sustainable Agriculture to strengthen the links between research and farming. For instance research is needed to cut the need for nitrogen fertiliser (a major source of CO2), to increase the efficiency of meat production, to use water more effectively, to cope with a changing climate and to protect biodiversity. GMOs (properly validated) will have a key role to play.  Europe turns its back on such scientific research at its peril.