The Common Agriculutral Policy

Question 1

What was the forerunner to the EU called?

Answer 1

The European economic community (EEC)

Question 2

What was the treaty called that created the EEC and when was it signed?

Answer 2

Treaty of Rome was signed in 1957

Question 3

When was the CAP introduced?

Answer 3

1962

Question 4

What were the original aims of the CAP 1962-1992?

Answer 4

1. To increase agricultural productivity in member states
2. To ensure a fair standard of living for farmers
3. To stabilise agricultural markets
4. To ensure reasonable consumer prices
5. To maintain employment in agricultural areas

Question 5

Import tariffs definition

Answer 5

Taxes applied to imported goods

Question 6

Intervention prices

Answer 6

Set prices (by the EU) guaranteeing prices for commodities. If internal market prices falls below intervention level the EU will buy up produce to raise the price to the intervention level

Question 7

Subsidies (agriculture)

Answer 7

This is money paid to the farmer to grow particular crops. Maintains home grown supplies. Usually paid on the amount of land growing the crop rather than on crop yields.

Question 8

What were the results of the original CAP?

Answer 8

Overproduction by EU farmers creating surpluses. Known as ‘mountains and lakes’ e.g. Cereals, butter, beef apples, oranges, tobacco and wine.

Question 9

What percentage of the EU’s total budget was spent on agriculture and what percentage of its income came from agriculture?

Answer 9

70% of the total budget was spent on agriculture

5% of the total income came from agriculture

Question 10

Who were the net gainers for the CAP?

Answer 10

France and Southern Europe with larger, less efficient farms

Question 11

Who were the net losers from the CAP?

Answer 11

Those with a smaller agricultural sector but with smaller more efficient farms e.g. The UK

Question 12

While the CAP brought near self sufficiency by the mid 1980s what problems did it bring?

Answer 12

1. Surplus production and huge storage costs
2. Over-intensive farming has damaged the environment
3. Growing tensions between the EU and its trading partners (USA, Australia etc) over the impact of subsidised EU produce on world markets
4. LEDCs found it difficult to trade with the EU
5. Large prosperous farms benefitted more than smaller/medium sized farms. This caused rural-urban migration

Question 13

What were the 1992 reforms to the CAP?

Answer 13

1. Support for cereals, beef and sheep was reduced
2. Quotas were introduced, particularly dairy farming
3. Set-aside policies introduced
4. Environmentally sensitive farming encouraged: decreasing use of fertilisers and pesticides
5. Early retirement plans for farmers aged over 55

Question 14

What did quotas do within the European Union?

Answer 14

Used to reduce production. Farmers limited to strict amounts of production. Introduced for milk production initially but there are quotas on many farming products

Question 15

What did EU quotas do outside the EU?

Answer 15

Late 1990s, Ecuador, Honduras and Guatemala claimed that the EU’s tariff and quota system discriminated against them.

The WTO agreed and the EU had to drop restrictions.

Question 16

What was set aside?

Answer 16

Where farmers had to take a section of their land out of production but had to maintain it so it could be brought back into production in times of food shortage

Question 17

Set-Aside facts and figures

Answer 17

1. Famers who took 20% of cultivated land out of production were paid £200 per hectare
2. By the early 90s cereals were still over produced so the EU declared that famers with over 20ha who wished to maintain their subsidies had to take 15% of their land out of production
3. Farmers can move around their Set-Aside land annually or keep it the same for years
4. The land must be managed so that it can be brought back into production if needed
5. Set-Aside land can be used to grow oilseed rape and willow coppice for fuel.

Question 18

What were the results of the changes to the CAP?

Answer 18

1. Surpluses fell dramatically through the 1990s but countries like Germany were unhappy and wanted to reduce their net contribution The the EU
2. Germany and the U.K. were aware that the CAP couldn’t sustain its level of funding without economic implications
3. Also, the EU had to comply with the WTO requirements to work towards free trade in food commodities so import tariffs and export subsidies were cut
4. European farmers were forced to rely more on world prices
5. As a result of this European consumers benefitted from cheaper food. The environment also benefitted from the move towards rural stewardship

Question 19

The 2002 plan put forward by the European Commission

Answer 19

1. To switch funds gradually from intensive production to schemes promoting rural life, safer food, animal welfare and a greener environment
2. Farmers will no longer be subsidies based on crop area or head of livestock
3. New CAP geared towards consumers and tax payers, however it gives EU farmers the freedom to produce what the market wants