The CAP, yesterday, today and tomorrow IV: the first Common Agricultural policy

1. The CAP, yesterday, today and tomorow
2015/2016
SBSEM and European Commission
4. The first CAP
Tomás García Azcárate

2. EEC-6

3. Many small farms…
• 17,5 Millions farmers and agricultural workers.
Italy (33% but 50% in the South); France
(25%); Germany (20%)
• Average farm size: France (15,7 has); Germany
(7,5) but Italy (3,3)

4. But close to self-sufficiency

5. CAP, daughter of the history I
• Absence of the United kingdom
• CEE-6 not far from self-sufficiency
• After the second world war food is important +
several traditional food providers disappear
behind the Iron Curtain: Romania, Hungary, East
Germany…
• Cristian Democrat tradition and family farms in
France, Germany, Belgium and Italy
•

6. CAP, daughter of the history II
• France believed there were winners with the
single agricultural market
• Germany believed he same with the single
industrial markets but German Cristian
Democrats had to take care of its strong rural
electoral support

7. The initial agreement I
• Free circulation of agricultural products (France)
• Common prices for the main central European
crops (+ olive oil, for Italy)
• Fixed close to the highest existing internal price
(Germany)

8. The initial agreement II
• Fully guaranteed through intervention buying, if
needed (All)
• Low or no border protection for the other
agricultural products (Benelux) => Unbalanced
border protection
• Major political achievement in the short term …

9. … with dramatic long term
consequences I
• Economic: Increase production as guaranteed
prices are higher than production costs:
maximizing production = maximizing income.
Increasing supply
• At a moment when technological changes
promoted by the war were becoming operational:
pesticides, herbicides, agricultural machinery…
• Pscicological: farmers task is to produce, not to
be concerned with the markets

10. … with dramatic long term
consequences II
• Economic: Animal feed industry tries to replace
expensive feedstuffs by cheaper one. Falling
demand for cereals
• Regional: Intensive livestock farming moving
from cereal areas to ports
• Environmental: loses of organic content in
cereal areas; nitrate and air pollution in port
areas

11. Share of cereals in animal feed EEC
versus US 1990

12. CAP objectives
• To increase productivity, by promoting technical
progress and ensuring the optimum use of the
factors of production, in particular labour;
• To ensure a fair standard of living for the
agricultural Community;
• To stabilise markets;
• To secure availability of supplies;
• To provide consumers with food at reasonable
prices.

13. CAP principles
• Market unity
• Community (European) preference
• Financial solidarity

14. Other horizontal objectives
• Sustainable development with its 3 pillars
• Economic, social and environmental
• Economic and social cohesion

15. The most classic CAP scheme

16. If you want to know more …
• DG AGRI webpage:
http://ec.europa.eu/agriculture/index_en.htm
• My webpage:
http://tomasgarciaazcarate.com
• Twitter: Tgarciaazcarate
• Linkedin: Tomas Garcia Azcarate
• Facebook: Tomas Garcia Azcarate