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Europe's farming future debated

20 May 08 00:04 GMT

How should Europe's Common Agricultural Policy (CAP) respond to the "food crisis"? Our environment analyst Roger Harrabin examines how worries about food are stimulating a debate about the long-term future of the CAP.

The Common Agricultural Policy - the vast system that costs Europe's taxpayers more than £30bn pounds a year - will be spruced up on Tuesday.

The European Commission will introduce a series of proposals aimed at making farmers more responsive to the market and distancing the CAP from the old system in which farmers were paid to produce food.

The Commission wants to get rid of almost all direct payments to farmers for production.

It wants to scrap controversial set-aside policies in which farmers are paid to leave land fallow; to remove quotas on producing things like milk; and to shift more farm support into a broader rural development fund.

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The plans will be contested on various counts, but perhaps most interesting is the debate the CAP "health check" is sparking about the next seismic CAP reform in 2013.

That's because politicians are worrying about the price and availability of food - and they're employing those worries to support their own ideas for the CAP of the future.

The UK sees the CAP as a drain on Europe's economy and a distorting factor in world food markets. Long-term, it would like to see the CAP dramatically shrunk.

The UK has been lobbying EU neighbours with the argument that with high food prices, farmers don't need support. Ministers imply that subsidies push up world food prices - an idea that puzzles some agricultural economists.

French farmers have seized the so-called food crisis, too. They argue that uncertainty over food means we should support Europe's farmers as much as possible. Instead of liberalising trade, we should make Europe self-sufficient in food.

By 2013, the current food crisis will probably have been overcome as production worldwide increases. But the debate about how Europe's farmers should respond to a growing world population all wanting to eat like we eat in the West is unlikely to go away.

Changing drivers

It is part of the long-term fluctuation in CAP policy. The CAP was invented before the War in response to concerns that the growing world population might go hungry.

Europe threw money at farmers to stimulate production but it worked too well, producing "milk lakes" and "butter mountains".

The surpluses were then dumped on world markets, forcing down food prices to the benefit of Europe's consumers who'd never eaten so cheaply. Many farmers in poor countries couldn't compete with the subsidies and went to the wall.

In 2004, the CAP was re-made to fit new imperatives. Instead of simply being paid to produce, farmers would also get money for animal welfare and stewardship of the environment.

The latest mini-reform will push the CAP slightly closer towards a freer market. But it is not clear how far the 27-member EU will favour the really major reform so desired by the UK.

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