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The Common Agricultural Policy Jo Eldridge, Alison Fox, Lizzie Simpson, George Tickell and Chris Wenzinger,

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Presentation on theme: "The Common Agricultural Policy Jo Eldridge, Alison Fox, Lizzie Simpson, George Tickell and Chris Wenzinger,"— Presentation transcript:

1 The Common Agricultural Policy Jo Eldridge, Alison Fox, Lizzie Simpson, George Tickell and Chris Wenzinger,

2 Why the Common Agricultural Policy was set up? Treaty of Rome (1957) Treaty of Rome (1957) Common Market Common Market Market Unity Market Unity Community Preference Community Preference Financial Solidarity Financial Solidarity Objectives Objectives Increase productivity- technical progress, optimum use of the factors of production (labour) Increase productivity- technical progress, optimum use of the factors of production (labour) Fair standard of living for agricultural community Fair standard of living for agricultural community Stabilise market Stabilise market Secure available supplies Secure available supplies Provide food at reasonable prices Provide food at reasonable prices

3 How is it used? State intervention State intervention Subsidies-guarantee minimum price to producers Subsidies-guarantee minimum price to producers originally paid to produce originally paid to produce more recently paid to not produce more recently paid to not produce Buys surpluses- destroyed, stored or dumped- keeps price at or above market level Buys surpluses- destroyed, stored or dumped- keeps price at or above market level External tariffs- levies imposed on agricultural products from non-EU states- higher prices External tariffs- levies imposed on agricultural products from non-EU states- higher prices

4 Development of the CAP Mansholt plan Mansholt plan Removal of small inefficient farms in place of the larger mass-producing farms (failed) Removal of small inefficient farms in place of the larger mass-producing farms (failed) Introduction of quotas for milk Introduction of quotas for milk Lowered price of milk, reduced production of milk Lowered price of milk, reduced production of milk Agricultural products included in GATT Agricultural products included in GATT MacSharry reforms MacSharry reforms Limited rising production Limited rising production Heading towards a free agricultural market Heading towards a free agricultural market

5 Advantages of the CAP No Famine No Famine Preserves Environment Preserves Environment Preserves Rural Communities Preserves Rural Communities

6 Disadvantages of the CAP Over Production Over Production Expensive Expensive Harmed Farmers in Other Countries Harmed Farmers in Other Countries Environmental Problems Environmental Problems Conflict Conflict E.U. E.U. Rest of the World Rest of the World

7 French Agriculture Shaped by C.A.P. Shaped by C.A.P. Huge diversity of soils and climates Huge diversity of soils and climates Total agricultural area Total agricultural area 33million hectares 33million hectares

8 Farms Numbers in constant decline Numbers in constant decline Dependant on retirement age and European and national farm closure schemes. Dependant on retirement age and European and national farm closure schemes. Employment in holdings is proportional to farm size and and area available per worker. Employment in holdings is proportional to farm size and and area available per worker.

9 Changes from the 1930s 1930s – France could not support nations food needs. 1930s – France could not support nations food needs – need for food, but workforce had to be split between reconstruction and agriculture – need for food, but workforce had to be split between reconstruction and agriculture. Modernisation lead to imbalances between demand and production. Modernisation lead to imbalances between demand and production.

10 Introduction of European Common Market Opportunity and danger Opportunity and danger CAP protected the domestic market, and agricultural prices could be regulated CAP protected the domestic market, and agricultural prices could be regulated Restructuring of agriculture has taken place reasonably smoothly Restructuring of agriculture has taken place reasonably smoothly

11 Future of the CAP Fundamental reform of the CAP June 26 th 2003 Decoupling of subsidies and production (Single Farm Payments) Decoupling of subsidies and production (Single Farm Payments) Incorporation of environmental and social issues into the agricultural policy Incorporation of environmental and social issues into the agricultural policy Payments conditional on compliance with environmental, food safety, animal and plant health and animal welfare standards Payments conditional on compliance with environmental, food safety, animal and plant health and animal welfare standards

12 Scenario: (partial) re- nationalisation of the CAP Individual member states paying part of subsidies to farmers Individual member states paying part of subsidies to farmers Condition: Member governments agree to take on part of cost currently borne by E.U. budget Condition: Member governments agree to take on part of cost currently borne by E.U. budget France also believed farm policies should be conducted at a European level France also believed farm policies should be conducted at a European level

13 WE CONCLUDE… Although the Common Agricultural Policy is far from perfect, no better solution has yet been found Although the Common Agricultural Policy is far from perfect, no better solution has yet been found


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