12

It's often said that the EU Common Agricultural Policy (CAP) is disadvantage to Britain, from the Guardian:

Britain’s withdrawal from the EU’s common agricultural policy (CAP) provides one of the few bright spots of Brexit, and if replaced with new legislation could help to restore some of the country’s degraded natural environment, one of the government’s leading economic advisers has said.

Dieter Helm, professor of energy policy at Oxford University, told the Guardian: “If there was any reason to be optimistic about Brexit, it is that it is the end of the CAP. It is hard to think how you could be anything other than better off if you had control of how you spend [the sums currently allocated in farming subsidies].”

I've found the following graph in an EU report on Agricultural and farm income: enter image description here

It's often said, for example in this answer, that the CAP favours France, but it's unclear why. An obvious reason is that France has a larger agriculture industry (as supported by the graph) than any other EU country.

On the other hand, it seems a lot of criticism of the CAP comes from the UK, with the quote from the Guardian saying that the UK could better allocate funds for farming. The article goes a little bit into environmental improvements, but it's unclear to me why and if that's the major concern of the UK regarding the CAP.

My question is whether the CAP disproportionately disadvantages the UK compared to other EU countries (not just France, because it has a large agriculture sector) and what reasons contribute to that disadvantage. Or are other EU countries critical of the CAP as well and does it actually favour France over most / all other EU members?

| improve this question | |
8

Confirmation basically from perhaps a less biased source

enter image description here

The catch is that is only pillar 1 subsidies (100% EU budget contribs), there are also pillar 2 CAP subsidies (50/50 split with the national budgets), not included in that graph. But this is most of the money:

For the Multiannual Financial Framework 2014-2020, the CAP amounts to 408.31 bn. € (circa 38% of the EU budget), of which 308.72 bn. € is allocated to the first pillar.

The net benefits issue is actually not trivial, because it does require some counterfactual assumption. See this page for a discussion, which is mostly focused on Ireland, but has a raft of older papers.

As for why the [im]balance is like that... it's pretty obvious due the share of agriculture in GDP being in the lowest bracket in Germany and the UK.

enter image description here

Also the issue of the biggest net contributors to the CAP is translated into a similar one at the whole EU budget level. (I'll spare you the graph here; the UK comes 2nd after Germany.) This is in part because the CAP has such a large share of the EU budget, because there are few if any state-level agriculture programs. As the World Bank explains:

The Common Agricultural Policy (CAP) is the largest budget item in the EU budget, but largely substitutes for national spending on agriculture, unlike any other sector. At nearly 40 percent of the EU budget, it is the largest single line item and translates to about €50 billion a year, or a resource transfer of 0.4 percent of GDP in support of the agricultural sector. While the budget share looks large, support for agriculture in the EU Member States is largely done through the CAP budget. In addition, national budgets are estimated to combine for another €18 billion per year through top-ups to the CAP and other support for agriculture. Other sectors, such as education, transport, defense, pensions and healthcare are either not included in the EU budget, or take a much smaller share, because they are paid for — fully or partially — out of national budgets.

[...] Today’s CAP has moved a long way from the “coupled” support (support targeting the production of a particular commodity), which produced the proverbial butter “mountains” and wine “lakes” in the 1980s and early 1990s to the “decoupled” support [income support] farmers receive today. This shift explains to a large extent why, while the CAP spending amounts to about one-tenth of global agricultural subsidies, world market and EU prices have now mostly converged.

| improve this answer | |
  • 2
    Should be mentioned en.wikipedia.org/wiki/UK_rebate And the Oxford prof should be asked what it is that prevents UK from allotting money to nature conservation? Military spending, bail-outs? Whenever you hear "there is no money" you know to add 'for that' while you chuckle… (Not saying that a large part of any EU subsidies aren't seriously misdirected, but members like the UK decide(d) over those.) – LаngLаngС Sep 23 '19 at 18:13
  • @LangLangC: the fist graph is post-rebate. Otherwise the UK would be 1st. – Fizz Sep 23 '19 at 18:16
  • @LangLangC The rebate is only available to farmers for specific activities. LIke any other businesses, farmers organize their activities to maximize their profits, and the EU rebate directly contributes to unsustainable practices which are anti "nature conservation" - for example over-stocking of animals on grazing land, and growing non-native crop species which neither support the native wildlife nor yield well in the UK (in some cases, the farmers don't even bother to harvest them) but attract large EU subsidies simply for planting them and letting the crop fail. – alephzero Sep 23 '19 at 20:36
  • … the most visible example in the UK countryside is the vast areas of yellow-flowered fields in spring, which is oilseed rape being grown mainly for the EU subsidy, not because it is the most productive and "conservation friendly" way to use the land. Grown in the "average" European climate, oilseed is a perfectly sensible and sustainable crop, but the UK climate does not match the European average. – alephzero Sep 23 '19 at 20:39
  • 1
    The rebate thing is relevant as UK paid that way way less than otherwise agreed upon. But CAP is only part of EU dealings. One could argue that CAP is even much worse for Germany, being top payer. But UK + Germany overall profited massively from EU, despite some less-than-ideal compromises in subfields from a shortened nationalist calculator view. CAP is 'big' but not 'all', that's what makes arguing over this in isolation so crazy. Profits aren't made only from 'money paid out flowing back in' but from net-effects. – LаngLаngС Sep 23 '19 at 20:54
8

It's hard to be impartial in defining the advantages and disadvantages of the CAP, since it involves making a value judgement of what it's "for". However, the current implementation makes especially large payments to countries like France and Spain, which are big but have relatively low population density, since it is principally based on the land area of farm, rather than their production. The change to this method was itself a fix for a system of subsidy which had ended up with production totally out of kilter with demand,

On the other hand since France is also a highly developed nation with a large economy, it also makes large payments towards the funding of the system. The website "capreform.eu", (which as you'll see from the title definitely isn't impartial) calculates that on the 2014 CAP budget France was a marginal contributor, with the Germany the biggest (by a significant margin). In this ranking (which is taken post rebate) the UK comes third.

| improve this answer | |
  • However, the current implementation makes especially large payments to countries like France and Spain, which are big but have relatively low population density, since it is principally based on the land area of farm, rather than their production. How do you explain Sweden (and Finland) that are almost as big but waaay down in this graph? – d-b Sep 23 '19 at 20:27
  • 1
    @d-b A result of climate. Farm in this case doesn't include forest. ec.europa.eu/info/sites/info/files/food-farming-fisheries/… – origimbo Sep 23 '19 at 20:53

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .