The recent reforms of the common Agricultural Policy effect no improvement to the system that was replaced. Discuss.
...roduced. This was an alarming reality of the CAP, describes a “milk lakes and butter mountains”, which raised public concerns in a world which saw escalating poverty in developing countries. With the restriction of the food supply along with the pricing out the poorer countries exports through hefty tariffs, public opinion turned against the CAP. The over production of food also raised environmental concerns, since the farmers were over producing on the land which in turn depleted the soil fertility, and the increased use of fertilisers, hormones, antibiotics raised issues of food safety and animal welfare. Although CAP had been review in the pass, it was from 1992 onwards that saw the most radical reform of the policy. The reform in 1992 seemed to trigger off a onslaught of reform which in the following 10 years saw CAP reformed no less than four times, as part of the Agenda 2000 reform. The 1992 reform, known as the ‘MacSharry’ reforms, after the commissioner who fronted it, aimed to redirect spending by replacing a system of income support by way of guaranteed prices with a direct income support scheme. It also aimed to bring supply more in line with demand by setting aside farmland, and curbing production. In addition to this, the EC gave incentives to farmers to rationalise production cost, improve the product and gear farmers up for a new emerging market in bio-fuels. The reform on the cereal sector was positive, production came back into line with consumption and public stocks were substantially reduced, from 32 million tonnes in 1992/1993 to 12.9 million in 1998. It created an improved demand for wheat and maize in animal feed, which rose from 83 million tonnes in 1992 to 107 million in 1998, an increase of 29% (the European Parliament Fact Sheets: Reform of the CAP 4.1.2). There was a general improvement in other sectors as well such a beef, sheep and goat meat and oilseed sector. This resulted in a more competitive position on the world market, since price of production fell and supply came into equilibrium with demand. However, there still were additional reform pressures faced by the EU’s CAP. The accession of many Central and Eastern European countries into the EU will inflate the EU budgetary spending on Agriculture. One of the factors in the 1992 reform was to reduce the drain on the budget and so this reform would not be the final chapter. The negative image of CAP was also still to be rectified as it was seen to help the wealthy and neglect the needy. Along with the continued concern over environmental issues and high prices, CAP still had not proven themselves to their public. The European Parliament urged the Commission to submit a review of the 1992 reform assessing the impact of the reform on its commitment to GATT (now the WTO) and agreements with developing countries. Reviews would also include the impact on free trade agreements and effects on the agricultural sector and its future. Now setting the stage for the 1999 Reform, leading to the Agenda 2000. The Agenda 2000 was the main reform package for the CAP and it faced many new challenges. Strong growth on the world agricultural market rendered CAP prices too high too compete on the world market would making the EU unable to successfully enter this growing market. They are also plagued with a misdistribution of agricultural support, some regions demanding more than others, a result of poor planning and loosely applied regulations. A new more simplified and decentralised model of CAP has emerged through the Agenda 2000, where countries did not nationalise CAP but work independently to successfully implement the policies of the EU. This gave a new form to the CAP, which should sustain a multifunctional agricultural system. They hope to achieve this through continued price cuts to foster growth while maintaining the incomes of farmers. The continued development of rural areas was also introduced through this new reform package, to foster better environmental conservation and establish young farmers into an aging sector. The Agenda 2000’s goal of a competitive agricultural sector seems so far to have been met. The reduction of price intervention in the cereal market, on the heels of the 1992 reform by 40% showed an increase in volumes demanded. For example soft wheat demand increased by 95% and corn by 45% (Common Agricultural Policy: a European Journey – Then, Now and the Future. In the market for milk and milk products the...