EU agriculture & budget

9:46, 30 March 2010

Brussels is flooded with events and papers that try to shed some light on how the ‘new world under the Lisbon Treaty’ will work. For agriculture, the Lisbon Treaty has brought co-decision but it has not changed the objectives of the Common Agricultural Policy (CAP) established in the Treaty of Rome in 1957. These objectives fail to recognize – and are partly in contradiction with – new EU priorities, such as biodiversity protection and the fight against climate change.

The 1957 objectives are: to increase the productivity of farmers and to ensure them a fair standard of living, to stabilise markets and to secure the availability of supplies, and to provide consumers with food at reasonable prices. Even back then, some of these objectives did not make much sense. The shortages after the Second World War had already been overcome and food security was no longer endangered. Also, focusing income support on farmers was clearly less effective for social policy purposes than directly helping poor households. The true driver behind the CAP objectives and their subsequent implementation was France’s reluctance to open its market in industrial goods to more competitive Germany. The common market was thus bought at the price of a financial transfer to French farmers (through the Community’s taxpayers that financed the CAP and consumers that paid higher food prices as a result of heavy tariffs on agricultural imports).

As the CAP is moving torward fundamental reform after 2013 – negotiated in the context of the new EU long-term budget – more and more stakeholders and experts call for a CAP that does not try to micro-manage farm investments to enhance productivity, nor give free handouts to farmers to raise their incomes, nor stabilizes market prices. Instead, the CAP should focus on the provision of public goods, notably in relation to climate change, biodiversity and water. This has, for instance, been the thrust of a Declaration in favor of ‘A Common Agricultural Policy for European Public Goods’, signed by leading agricultural economist from all over Europe.

As this debate gains momentum, it is important to admit the mistake of the Lisbon Treaty in not updating the CAP objectives. The maintenance of the old text – ad verbatim – does not lend renewed legitimacy to these objectives, but simply reflects a political impasse. A new set of objectives could not have been agreed among the member states, and it would likely have undermined support for ratification in certain member states, such as Ireland. The Lisbon Treaty can thus be safely ignored on this issue as Europeans attempt to find the right agricultural policy for the 21st century.