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Common Agricultural Policy (CAP): what it is, its origins and its current impact on farmers’ lives

For over 60 years, the CAP has guided European agricultural policy. But what is it, when did it begin, and how is it affecting the work of farmers, whose dissent is being voiced these days?

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The Common Agricultural Policy (CAP) is one of the key policies of the European Union (EU), designed to manage agriculture and support farmers in the member countries.

Established in 1962, when the EU was still known as the European Economic Community (EEC), the CAP was designed to increase agricultural productivity, ensure a fair standard of living for the farming population, stabilise markets, secure the availability of supplies and provide consumers with food at affordable prices.

In 1962 the European Union as we know it today did not yet exist. The Common Agricultural Policy (CAP) was established within the European Economic Community, which was founded in 1957 by the Treaties of Rome and aimed to promote economic integration among its member states.

It should be remembered that the EEC initially comprised six countries: Belgium, France, West Germany, Italy, Luxembourg and the Netherlands, and only with the passing of time, through various treaties and enlargement processes, did the EEC evolve into what we know today as the European Union, a broader and more integrated political and economic entity.

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So, when we speak of the creation of the CAP in 1962, we are referring to the context of the European Economic Community in a historical period very different from today’s.

It is easy to understand that, from its creation to the present day, the CAP has undergone several significant reforms in order to adapt to the changing economic, social and environmental needs of these 62 years.

Among the most significant historical milestones:

Between 1960 and 1980, when answers were being sought to the food crisis and market instability. In that period the post-war challenges were aimed at tackling the food crisis and the instability of agricultural markets.

In the years 1980-1990, reforms aimed at controlling production and overproduction. Older readers will certainly remember the affair of the so-called “milk quotas”, which began in 1984 and immediately, and in the following years, caused great dissent among farmers. The measure was intended to limit and reduce market excesses in the dairy sector.

Also in those years (1992), measures such as the decoupling of direct payments from production. Before then, direct payments were often tied to production, which encouraged overproduction and led to market surpluses. But also reforms of intervention prices and measures to reduce the costs of the CAP.

Only from the 2000s did the CAP begin to shift its focus towards environmental, social and economic sustainability. Measures were introduced to promote sustainable farming practices and rural development.

From the post-2013 CAP to the present day: ‘greening’

The EU guidelines and rules of recent years, known as the post-2013 CAP, which was adopted on 16 December 2013 and came into force in 2014, changed the paradigm further, or perhaps we can say that it strengthened certain rules that already existed in embryonic form in previous CAPs, namely those relating to the protection of the environment.

According to data from the European Council website, the CAP budget for 2014-2020 represented about 38% of the EU’s overall budget, amounting to €408.31 billion over the seven-year period, with the aim of a 15% reduction compared with 2013.

This reform introduced significant changes in the way direct payments were made to farmers, strengthened the link between agricultural support and environmental sustainability, and sought to simplify and make the CAP’s administrative procedures more transparent.

For example, a series of ‘green’ measures were introduced to promote sustainable farming practices and protect the environment, such as crop diversification, the maintenance of permanent grassland and the conservation of ecologically significant areas.

CAP 2023 – 2027

The EU describes the new Common Agricultural Policy as “fairer, greener and more results-oriented”, and it came into force in January 2023. The rules in fact represent a continuation of previous reforms and introduce broader objectives that are aligned with those of the European Green Deal.

Agricultural policies are strongly geared towards providing farmers with a stable income through direct payments and market measures to offset fluctuations in prices and production costs.

They also aim to promote sustainable farming practices to protect the environment, preserve biodiversity and combat climate change.

They aim to stimulate the economy of rural areas by promoting innovation, digitalisation and the diversification of economic activities.

They aim to ensure the production of high-quality, safe and traceable food, while respecting high standards of animal welfare and plant health.

A new ‘green architecture’ is introduced for direct payments, with the aim of integrating sustainability into all stages of agricultural production. Farmers are required to meet stricter environmental and climate requirements in order to receive direct payments, such as the protection of wetlands, the sustainable management of farmland and the promotion of biodiversity, which translates, for example, into leaving 4% of agricultural land “fallow”.

New objectives are introduced to promote digitalisation and innovation in the agricultural sector, with the aim of improving the competitiveness, resilience and sustainability of European agriculture. Funds have been allocated for investment in digital technologies, agricultural robotics, precision farming and other innovative solutions.

The new provisions specify that each EU member state must carry out a wide-ranging analysis to identify its own specific needs and draw up a CAP strategic plan. This plan must set out how it intends to use the funding. Each plan must be approved by the EU. Each country must then present its results so that the outcomes achieved can be assessed.

The CAP, with all its changes, has influenced European farmers for over 60 years, guided by national policies and, today more than ever, by European ones. The policies of recent years have given great weight to sustainability, the maintenance of the land and public well-being.

These are ambitious policies. However, it remains to be seen how these new policies and measures will be implemented and what their effects will be “on the ground”. Assessing the effectiveness and impact of the CAP 2023-2027 will take time and constant monitoring by the competent authorities and by stakeholders in the agricultural sector and in the media.

sources: European Council

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