You Can’t CAP It!
The recent European Union (EU) budget talks and World Trade Organisation (WTO) trade talks in Hong Kong, have brought a new urgency to the debate on the reform of the Common Agricultural Policy (CAP). How can such a scheme continue under an enlarged Europe Union? How can free and fair trade exist between the EU and the developing countries with such market distortions?
These are some of the challenges the EU faces. Although the CAP clearly needs reform, recent political ranglings have shown us that any change is difficult. However we also need to remind ourselves why the tradition of payments to farmers exists, what the effects of changing this would be and why reform is so difficult if not impossible to accomplish.
First of all let us assume that CAP was abolished, what changes would we see?
Market forces would dictate that only the largest most economically efficient farmers would survive. Those who utilised economies of scale; who used the latest mass production methods; the farmers willing to tear down those hedgerows; used the most efficient agro-fertilisers and pesticides; that sowed the most versatile Genetically Modified seed, would still exist under the strain of international competition. This would further destroy the countryside, wildlife and environment that we have only recently begun to stop. However is this view completely accurate? Would small farms disappear?
It has been argued that small farms do not benefit from CAP. This is based on statistics showing that 80% of CAP payments go to 20% of farmers and those 20% are usually the largest ones. Even so there still remain a significant number of smaller farmers who receive payments and who would be swept away with the ending of CAP. Reform is clearly needed to ensure that smaller farmers receive subsidies, and to prevent the carving up of the countryside that would take place with the ending of CAP.
Secondly we should remember the role farmers and landowners have played in the maintenance of the countryside. Farmers and landowners have traditionally been seen as the custodians of the countryside. In the UK this was established in the 1947 Agriculture Act whereby farmers and landowners under the ‘rules of good husbandry,’ were entrusted with the ‘custodianship’ of the countryside. This is based on the assumption that someone has to manage and protect the countryside. In the face of increased urbanisation; where the countryside is increasingly being threatened by housing development and industrialisation, this is evidently important. The countryside is not just a physical but also a threatened natural area that needs to be protected.
But are farmers and landowners the right people to care for the country?
This is a debate that has flourished since the 1980s, especially during the passage of the 1981 Wildlife and Countryside Act. The 1980s saw increasing public realisation that the countryside was no longer the idyllic settings they envisaged or read about in the writings of Thomas Hardy or Jane Austen; that food production was focused on quantity rather than quality damaging the countryside; and the highly romantic and idealistic view of farmers and landowners as the natural guardians of the countryside was frequently being questioned.
This happened because farmers were being encouraged to adopt mass productionist policies, and this inevitably led to over supply (the hotly debated butter mountains and milk lakes). CAP was instrumental in this, but paradoxically ending CAP will not solve the problem but make it worse. Ending CAP will result in more mass production as I argued above. The only way forward is to continue with the changes that have been introduced in 2003 that link payments to environmental protection measure. This is why payments will continue in some form for the foreseeable future.
So what is the future for farming?
Clearly CAP needs to be reformed, but payments will continue. The countryside needs to be maintained and this is expensive. The most efficient way to achieve this is to encourage those who live there and who understand the tradition of the countryside to maintain it in a more environmental way. The group most able to do this are the farmers. This can only be achieved through some form of subsidisation.