Agriculture and fisheries

Two of the most controversial areas of European policy are agriculture and fishing - and all parties want to see reform.

---

BACKGROUND

The Common Agricultural Policy (Cap) is one of the oldest elements of the European project and, excepting monetary union, remains one of the most controversial among British voters.

It accounts for nearly half of the European Union's E90bn (£56bn) a year budget - and yet it funds an industry employing only 5% of the community's workforce.

Cap was established in 1962 to ensure that unlike during the Second World War, Europe would never go hungry again.

It had three aims:

To increase food production

To give farmers a decent standard of living

To provide consumers reasonably-priced food

Cap requires the support of all participating nations and a common market for pricing and the movement of produce.

At its most basic level, Cap seeks to support agriculture in two ways:

Intervention - The EU intervenes in the market when prices fall below an agreed level and it buys up the surplus until the price rises again.

Tariffs - The EU levies tariffs on agricultural products from non-EU nations, raising their prices before they reach our markets.

The first decade of the Cap was successful as the six member states achieved theoretical self-sufficiency.

Key Cap dates

1958: Principles set out

1960: Mechanisms adopted

1962: Birth of Green Europe

1972: Agri-monetary system founded

1984: Budget limits introduced

1992: First reforms

1999: Second reforms

However, in the 1970s farmers began to produce so much surplus that it could neither be absorbed internally or dumped on world markets - the advent of the butter mountains and wine lakes.

Critics of the system say that rather than supporting a working income for the farmer, Cap encouraged over-production.

Additionally, Cap's subsidies and tariffs have been blamed by many, including the US, Canada and Australia, for warping global agricultural trade.

At home, the National Consumer Council has long been one of the most vehement opponents of Cap.

It says that it acts against the interests of the consumer in many ways:

The consumer has paid dearly through taxes and higher food prices

Cap has encouraged the use of antibiotics and the intensive farming practices that led to BSE

The system has been open to widespread abuse and fraud

---

EXPANSION

One of the driving forces behind reform is EU expansion eastwards.

For instance, Poland is expected to be one of the first new members after 2002.

Around a quarter of its population work in agriculture and current Cap subsidies would simply not be economically viable.

---

REFORMS TO DATE

Agreement among the member states on how to reform the system has so far proved difficult.

While some nations, including the UK and Sweden, want more liberalisation because they have a highly efficient agricultural system, other nations, led by France, support the system because it benefits its own farmers more than others.

The first attempts to change the Cap took place in the early 1990s.

In 1999 ministers agreed a limited reform which, critics say, fell far short of what they had hoped for.

The reforms, due to be completed this year, aimed to cut the subsidy bill to around 40bn euros (£27bn) a year.

It comprised 15-20% cuts in grain, dairy and beef subsidies over two years. Dairy quotas would also be phased out by 2006.

While the package fell short of what it had hoped for, the National Farmer's Union said that it had started the EU on a path towards a market-orientated agriculture sector.

But the NFU still advocates a "new contract" between the EU's farmers and society as a whole.

The US, Canada and Australia are still calling for the EU to end some of its key farming support policies.

They say that exports subsidies alone are worth 3bn euros.

---

FISHERIES POLICY

Fisheries ministers meet annually to set quotas for the total catch for each member state - but the industry entered 2000 with dark clouds overhead.

Cod has long been the favourite catch of the North Sea - but it is a species in peril.

EU officials say only 70,000 tonnes of adult cod remain in the North Sea, compared with 250,000 tonnes in the 1970s.

Both the industry and EU members agree there is a drastic need for conservation of stocks. British fishermen fell way short of catching their share of last year's EU quota of 81,000 tonnes.

In December 2000 EU fisheries ministers agreed to drastic cuts of fishing quotas in order to conserve threatened fish stocks for the future.

Total allowable quotas for cod and hake were seriously reduced, but less than originally proposed by the Commission.

Waters off limit (Feb - July)

West of Netherlands

Denmark

Norway

Shetland Islands

This was followed by a subsequent decision to close nearly a third of the North Sea in an attempt by the European Union and Norway - not an EU member - to halt a feared collapse of North Sea cod fisheries.

Scottish fishing fleets have been among the worst hit as they will be blocked from some of their fishing grounds for a 10-week period during the cod spawning season.

The Scottish Fishermen's Federation estimated the cuts would result in several hundred job losses among its 8,000-strong workforce.

All parties agree that there is need for serious reform of the CFP and a fairer deal for British fishermen.

The Conservatives have gone one step further and called for a repatriation of fisheries policy to national, regional and local levels with national control over waters.

One proposal, put forward by the National Federation of Fishermen's Organisations is for "zonal management". This would divide up the fishing grounds into large zones managed and conserved by the nations allowed to fish there.