Suchergebnisse

This chapter re-examines the case for reforming the Common Agricultural Policy. The health and environmental aspects of modern agriculture have been highlighted by British experience with BSE and FMD. Historically, agricultural support has been rationalised by reference to security of supply, income maintenance, or, increasingly, environmental concerns. It is argued that production price supports, the scale of which is set out, act as incentives to intensification which is environmentally damaging and poses threats to animal welfare and human health. Hormone beef and GMOs are no more threatening to the health of Europeans than of Americans and therefore should not be an issue in transatlantic trade although regulation of their use in production may be in order.Trade with developing countries is also affected by the CAP to their disadvantage on average – a problem that might be aggravated by EU enlargement to include countries such as Poland and Hungary with large agricultural sectors. The EU allows member states to enforce standards of animal welfare in excess of Union-wide minima. It is argued that doing this merely diverts production to less demanding regimes. It would be better to define different standards and to acquire appropriate labelling (as also of hormone use, GMOs etc). Farm support should be switched much faster from price support (with the environmentally damaging side effects) to explicitly environmentally friendly programmes (possibly rationally administered within an EU framework) compatible with a more liberal trading regime.

CAP reform is an opportunity for the EU and the new member states to make progress in terms of protecting peasant agriculture and farmers themselves in developing Europe's future. This requires reform of the Common Agricultural Policy as a necessity for the new Member States. They need to establish a set of clear objectives for sustainable development of the agricultural sector and also methods for a more efficient implementation of the common policy. This article follows a description of the CAP reform. While EU countries are developed, showcasing a stable economy, agricultural production and prices of agricultural products are influenced by favorable or unfavorable weather conditions. The new Member States have to find ways of solving old problems of agriculture, but also to meet the new challenges of European integration.

The CAP reforms that the EU accepted in June 2003 will partially decouple direct income payments to farmers from production and make these payments conditional on cross-compliance. The reforms are driven by enlargement of EU membership, budgetary constraints, mounting pressures from diverse animal welfare, consumer and conservationist non-governmental organisations, and by external pressure for a less distorting agricultural policy. The paper addresses the issue whether these CAP reforms will contribute to an agreement in the Doha Development Round that will liberalize world trade in agricultural products. The paper argues that the 2003 CAP reforms have enabled the EU to participate more constructively in the multilateral trade negotiations compared to the Uruguay Round. However, the reforms do not create room for improved access to EU agricultural markets for third country producers. These countries insist on substantial tariff reductions that, if realized, will force down the relatively high internal EU prices, which would mean a further restructuring of the sector.

The paper discusses the decisions on the CAP in the context of the Berlin summit. In a rather broad perspective the agricultural sectoral and related objectives are analyzed for their consistency and compatability with higher ranking societal objectives. The policies' allocational and distributional consequences are assessed in a qualitative manner by comparing them with a hypothetical first-best policy. The analysis focusses on the distortions in land allocation between agriculture, forestry and environmental purposes as well as on distributional consequences, taking into account the envisaged eastern enlargement. Among the consequences are excessive budget outlays and high economic rents for landowners, who are increasingly no active farmers themselves. Finally, problems of implementing a liberal CAP reform are discussed.