EU’s Common Agricultural Policy favours richest regions

Support of over €90bn each year under the EU’s Common Agricultural Policy (CAP) goes predominantly to the richer, core regions of Europe, according to a new study published this week. And current proposals for reform of the CAP will do little to change this.

According to Professor Mark Shucksmith, of the University of Aberdeen, “This works against the EU’s Cohesion Policy which seeks to reduce the disparities between the prosperous core and the poorer, more peripheral regions of Europe.”

At a conference on the Future of Rural Development on Thursday, December 9, in Aberdeen, researchers will present the results of a two-year study of the territorial impacts of the CAP. The principal conclusion is that in aggregate the CAP works against the EU objectives of balanced territorial development and economic and social cohesion.

Most support to EU farmers comes not from taxpayers but from consumers paying higher prices for food. This Market Price Support (estimated by OECD at €56bn), together with Direct Payments (€27bn) from the EU to farmers, comprises “Pillar 1” of the CAP, and this overwhelmingly favours the more prosperous core areas of Europe rather than poorer peripheral regions.

The newer and smaller Rural Development Regulation measures (Pillar 2 - €4.6bn), such as agri-environmental and Less Favoured Area payments, surprisingly also go predominantly to the richer regions of the EU, although they are less concentrated in Europe’s core. This is because these measures are mainly used by the richer countries of NW Europe.

Moreover, the proposals for CAP reform currently working through the Mid-Term Review will do little to change this pattern.

Despite this, there is scope for the CAP to be brought more into line with EU cohesion objectives, according to Professor Shucksmith. “On the basis of our analysis we suggest that the main scope for achieving this is through gradually realigning and increasing the funding for Pillar 2 – the Rural Development Regulation. In accordance with DG Agriculture’s recent proposals, we recommend more emphasis be given to broader measures which promote sustainable rural development beyond the agricultural sector, building on the successes of the EU’s LEADER programme.

“Of course, the more that WTO negotiations lead to reductions in EU Market Price Support, through reductions in border protection and a convergence of EU prices with world prices, the greater the resulting consistency of the CAP with cohesion objectives,” said Professor Shucksmith.

At present, only €4.6bn out of the total €98bn annual support is devoted to rural development (Pillar 2), and most of this is only available to farmers.

The researchers also suggest that the EU Commission might explore models through which single farm payments are modulated more progressively in richer regions of the EU, for example according to farm business size, so as to concentrate support more effectively on those farmers and those regions which most need support.