The area of support within the EAGGF ensures that farmers have a market for their goods setting prices which allows farmers to have a standard of living equal to that of those working within other sectors of the economy. As well as this the setting of prices ensures that goods remain at a reasonable price that makes them affordable to E.U consumers. In saying this while the prices were deemed to be affordable but because one of the primary aims of Cap was to sustain agriculture as a viable industry the prices never dropped too low and this was a source of controversy. It was a major issue of Debate for Britain in their decision to join the E.U. “for many British consumers it was impossible to understand why the original six community members ever set up such a system of farm support” (Molle Willem T. M pp309)
Each year prices for Agricultural goods is set by the Council of Agricultural ministers which comprised of Agricultural ministers from each state. The European commission bought and released agricultural produce as to keep the prices set by the ministers stable and as a result of the nature of the European economy produce was more likely to be bought than sold and now in the E’U we have the controversial “food mountains” and “Wine lakes”. These stores continue to build due to the nature of the European market and the cost of storage alone has put the E.U under an amount of critisim as well as putting a strain on the E.U budget.
Farmers will only get a market within the E.U for their goods if the prices set by the commission compete with global prices otherwise consumers will import goods and if this happens the E. U will put tariffs on goods imported into the E.U. this has caused a trading War between Europe and the U.S.A.
On the onset the Common Agricultural policy was seen to be a competition between the two industrial leaders of the E.U, France and Germany, France whose agricultural sector accounted for 26% of its labour force in 1955 feared Germany with 18% (El-Agraa, Ali.M. 2001 pg 232) may take its place as the dominant force in E.U industry. It was imperative for France to protect its Farmers. On this matter it is only when reforms are mentioned does the Common Agricultural Policy become controversial. France although a dominant industrial society relies very much on its agricultural sector as does Agrarian societies such as Ireland, Italy, Greece, Portugal and Spain. These Agrarian dependant societies have benefited a great deal from the Common Agricultural policy while on the other hand the more industrialised societies such as the U.K and Germany tend to give more than they receive from the Common Agricultural Policy and are more likely to advocate the introduction of reforms in the Common Agricultural Policy than the more agrarian societies. An example of this controversy can be clearly seen in the disagreement between the U.K Prime minister Tony Blair and French president Jacques Chirac in October 2002 over the Franco-German deal that aimed in keeping prices at their current levels until 2013. Tony Blair was very much opposed to this as it would be in the interests of the U.K to reform the Common Agricultural Policy as it would be for the other industrialised countries such as Germany and Sweden.
As mentioned earlier the “Wine Lakes” and “Food Mountains are a source of much controversy for the Common agricultural policy. It is often cited by critics of the policy that the common agricultural policy is no longer viable and no longer a relevant policy in the European Union. “The conditions that led to its creation no longer exist” (Jones, R. 2000 pg 213). Cap was designed so that the E.U could become self sufficient in its production of Agriculture produce. It has fulfilled this aim but now over produced leading to an overwhelming surplus of Agriculture produce i.e. “Food Mountains” and “Wine Lakes”. This is a source of huge controversy when one considers the plight of many nations due to famine and food shortages as much of this surplus is often destroyed or released on to global markets which often has a detrimental effect on global markets. The “Food Mountains” and “Wine lakes” are the source of an eminent waste of food as well as a huge financial strain on the E.U budget with the cost of transportation and storage as well as damage to foreign markets when the goods are released onto them.
One of the founding principals of the Common Agricultural policy was to provide E.U consumers with affordable products. There is much debate over whether or not this has been achieved. The funding of the EAGGF takes up 48% of the E.U budget so whether or not prices are kept low, the citizens of the E.U are indirectly funding the Common Agricultural policy through taxation. In fact only once since the introduction of CAP has E.U prices being lower than the global level (1974). (Jones R. 2001) Farmer interest groups are continually lobbying the council for higher prices which is against consumer interest and a subject of much controversy.
There is a significant amount of inequality in the way that Cap benefits farmers. The EAGGF was supposed to be structured in a ratio of 3:1, support: guidance but in fact 90% of funding goes to large scale farmers in the form of support for their prices while smaller farmers in need of guidance funding for the modernisation of their farms often struggle to survive as a result.
There is also disputes between farmers and workers from other industries due to the high amounts of subsidies and grant aids they receive, in fact “almost half of union farmers incomes derive directly from subsidies and protection measures” no other worker in the any other E.U industry receives such aids and as well as this are vulnerable to fluctuations in the E.U market. The question is often asked whether or not it is justified to provide so much supports to one industry and none to so many others?
The Common Agricultural Policy is a source of much tension and controversy between the E.U and other nations over difficulty in accessing E.U markets in fact “ the CAP has developed in tension with international trade and been a recurrent source of argument between the E.U and its trading partners” (Wallace H and Wallace W. 2000 pg 193).The E.U was under constant pressure from its global partners to reform its agricultural policy this pressure was most notable during the Uruguay round of the GATT (now WTO) negotiations.
Another source of controversy in the CAP although not as significant as the financial burdens has been the impact it has had on the environment, large farmers who were encouraged by CAP to maximise production increased their usage of artificial fertilizers and growth hormones which have had a significant impact on the environment. This has been a great source of concern for environmentalists within the E.U. in deed “the rise of environmentalism provided a counterweight to the general sympathy of European public opinion for farmers and made it politically easier for governments to respond to the financial pressures with reform measures” (Molle, W.T.M. 2001 pg 315)
Ever since the Common Agricultural policy was implemented in 1963 reform has been at the forefront of debate about the policy. Since its beginnings their have been a number of attempts at reform.
In the late 1960’s Sicco Mansholt attempted to reform the problem with surpluses encountered by the Agricultural industry. “The Mansholt plan was the first ill fated effort to avoid surpluses yet still provide an adequate income to those who stayed on the land” (Dinan, Desmond 1994 pg328) He wanted to encourage farmers to attempt other vocations. The Mansholt plan also advised that more funding should be made available for guidance which would eliminate the inequality between farmers.
At the end of the 1960’s due to mass over production the agricultural council was forced to introduce a Quota system which caused huge controversy among the agrarian dependant nations in the E.U. The Taoiseach at the time Gareth Fitzgerald walked out of a European Council meeting to protest his anger at the introduction of a quota system. It wasn’t until 1984 that a quota system for milk production was agreed upon. (Desmond Dinan 1984).
The introduction of quotas although helped the situation did little to curb mass over production and the immense over spending of the E.U budget on the Common Agricultural policy.
There was another attempt at reform in the early 1990’s by Ireland’s agricultural commissioner Ray MacSharry which proved to be more successful. MacSharry introduced a series of reforms by cutting prices that farmers received for their produce and in turn compensating them for their loss of earnings. This resulted in reducing the production within the E.U, fixing prices and as the reforms were directed to the more significant products it simply made more sense. “The EU has claimed that these measures marked a watershed in the reform of the CAP” (George, Stephen and Bache, Ian, 2001)
It is clear that the E.U’s Common agricultural policy is indeed a highly controversial matter. One of the most significant reasons for the controversy that surrounds the policy is its lack of ability to modernise. The Common agricultural policy was materialised to deal with the Agricultural problems of the 1950’s and 1960’s and sense then for the most part it has failed to develop along with the changes in the economics of the E.U, which has brought with them significant changes in European Union Agriculture. One could go as far as to say that the common Agricultural policy is no longer relevant in modern Europe.
As well as this the Common Agricultural policy continues to benefit Agrarian states while causing a burden to industrialised states such as the U.K and Germany.
The Common Agricultural Policy puts a huge financial burden on the E.U and for the majority has failed to stabilise food prices, it has caused inequalities between members of the farming community caused international conflict and has had a negative impact on the environment which has been a source of much debate from environmentalists.
The E.U has made several attempts to justify and reform the Common Agricultural Policy but since its beginnings it has been steeped in controversy and this controversy is likely to continue well into the future especially in light of recent E.U expansion into Eastern European societies who are for the most part Agrarian societies dependant largely on Agriculture. The financial burden of the Common Agricultural policy on the European Union budget may become impossible to sustain. A priority of the E.U must be to further modernise the Common Agricultural Policy and avoid using dated solutions to fix modern agricultural problems.
Bibliography
Dinan, D. (1999) Ever closer Union: An Introduction to European Integration (2nd edition) Houndmills: Macmillan Press Ltd.
El-Agraa, Ali M, (2001) The European Union Economics and Policies, (6th edition) Harlow: Pearson.
George, S & Bache, I (2001) Politics in the European Union. Oxford: Oxford University Press.
Nugent, N. (2003) The Government and Politics of the European Union (5th edition) Houndmills: Palgrave Macmillan.
Jones, Robert, (2001) The politics and Economics of the European union (2nd edition) Cheltenham: Edward Elgar.
Wallace, H & Wallace W. (eds) (2000)Policy making in the European Oxford: Oxford University Press
Wyn, G. (1997) The Common Agricultural Policy Houndmills: Macmillan.
