19

The Common Agricultural Policy is a system of state grants to farmers in the EU.

Why do farms warrant public funding in this way? Isn’t this, in effect a form of protectionism?

  • See also politics.stackexchange.com/questions/18805/… - this is almost a duplicate. – MSalters Jan 21 at 13:31
  • Comments deleted. Comments should not be used to answer the question. If you would like to answer, please write a real answer which adheres to our standards of quality. And neither should comments be used to discuss the subject matter of the question. For more information about what comments on questions should and should not be used for, please review the help center article about the commenting privilege. – Philipp Jan 21 at 16:14
  • 1
    Just to clarify definitions - giving a private enterprise public funds is usually called a subsidy. Protectionism, on the other hand refers to government regulation (other than giving money) that makes life harder for foreign companies (often via tariffs). So they are similar, but not the same. – sleske Jan 30 at 10:29
31

Farmers receive subsidies in many many countries around the world, including EU countries prior to the CAP, the US, or Switzerland. One justification that's commonly offered is that self-sufficiency is a strategic goal that requires state support. The original policy was also devised when Europe was just coming out of food rationing that lasted for a decade after WWII. Nowadays, this productivity objective has partly been replaced with policies designed to safeguard the landscape and ecosystems through specific agricultural practices. And of course other sectors of the economy also receive subsidies and support from states in various ways.

So what's specific to the CAP is not that farmers receive subsidies, it's that they may not receive subsidies from individual states, instead getting them solely through EU programmes. That's why the CAP was such a large part of the EU budget for many decades (less so now). EU federalists hoped that other sectors would follow but that never happened. In other domains (industry, defense, research, education, healthcare, etc.) individual EU member states fund specific policies or directly subsidizes businesses within the bounds set by EU rules (in particular the rules on “state aid”).

  • 8
    @Ben Yes, that's what I am referring to in the second paragraph. It's not necessarily a lot of money relative to EU GDP or farm subsidies elsewhere but it's large compared to the EU budget because other “traditional” big spending items (including defense, education or subsidies to industry or transportation) are mostly covered through the member states budget, not the EU budget. The EU budget is far from negligible but not that large relative to the total GDP. – Relaxed Jan 20 at 17:30
  • 7
    It is often argued that the reason for massive agricultural subsidies in the EU is that French and German farmers possess massive political clout. It is also argued that agriculture in those countries and throughout much of continental Europe is far less efficient than it is in the UK and the Anglo world. One reason for this has to do with ancient systems of land inheritance, which led to average farm sizes being far larger in Britain. This, in turn, led to much greater economies of scale and hence financial efficiency. Many in Britain argue that the EU "feather-beds" inefficient agriculture. – WS2 Jan 20 at 19:06
  • 4
    @WS2 Of course small-scale inefficiency is more resilient, and resilience is a clear strategic goal of farm subsidies. – sgf Jan 20 at 20:14
  • 5
    @Ben this article puts fossil fuels subsidy at 6bn on th UK. google.com/amp/s/www.independent.co.uk/news/uk/politics/… – Jontia Jan 21 at 8:31
  • 4
    @Ben and this one puts Rail Industry subsidies at £6.4bn (including 2bn for HS2). orr.gov.uk/__data/assets/pdf_file/0006/39381/… – Jontia Jan 21 at 11:11
11

Not all of the so-called "CAP" has its primary goal of agricultural output. For example, in the UK there are large areas of land where the weather and soil conditions are only suitable for low-intensity sheep farming. However grazing sheep have been a part of the stable ecosystem of these areas for centuries, and removing them because they are "uneconomic" would cause the entire ecosystem to change dramatically, by destroying important habitats for wildlife, increasing soil erosion and hence changing the ecosystem of downstream river systems, increasing the risk of long-burning peat wildfires, etc.

In effect the farmers in these areas are being subsidized to maintain the environment, not to produce meat and wool.

In fact the policy of subsidies to these areas was changed to focus on the environmental protection issues, since the original payment rules led to environmental damage through attempts at unsustainable over-production to maximize the subsidy payments.

The same also applies in the high-intensity sector of the UK, where subsidies have been awarded to improve the environment in opposition to maximizing output - for example by extending the uncultivated borders of fields to provide wildlife habitats and corridors, maintaining hedgerows rather than replacing them with fences (or removing them completely in arable farming areas) etc.

  • 6
    In short, farmers are partly turning into the state's gardeners :) – Matthieu M. Jan 21 at 8:55
  • 1
    Mind you, that risk of soil erosion is there because those sheep farmers first cut down the trees. The true environment would have been a forest, but the CAP doesn't pay for that. – MSalters Jan 21 at 13:31
  • @MSalters - "True" environment is not always the best environment. For example, in some countries pastures are disppearing because they turn into intensive agriculture or, interestingly, woods, when pastures are abandoned. To keep diversity, the goal is not to maximize the area of woods (the "true" environment) but to keep some pastures to mantain biodiversity. – Pere Jan 21 at 18:40
  • 1
    I find it curious, the notion of a "true" environment. As though there is something special about the random scattering of prehistoric seeds on the wind falling on fertile soil. Certainly an environment that consists of wheat grass is much better than the same land being covered varieties of weed grasses. – Stephen Jan 22 at 4:11

protected by JJJ Jan 28 at 0:11

Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).

Would you like to answer one of these unanswered questions instead?

Not the answer you're looking for? Browse other questions tagged or ask your own question.