The Meatrix is committed to helping educate people around the world about the issues of sustainability, specifically in terms of food production and consumption. This action page is a way for us to communicate with the concerned people in the European Union, to encourage them to take action locally, but also to exchange information and experiences at the international level. We hope to create a network of concerned people, communities and organizations around the world that all join together to promote more sustainable food production and consumption patterns.

This action page will provide you with information on the agricultural situation in the European Union, on like-minded organizations that operate in the country, as well as with background information about the Meatrix series. Please send us any information or updates you feel should be added to Giuseppina Pagano at gpagano@fwwatch.org.

Europe Needs Another Agricultural Policy

A growing number of European citizens are deeply concerned about agriculture and the quality of food. Mad cow and foot and mouth diseases raised consumer concerns about how far the industry would go to reduce food production costs. People are already aware of the environmental damages resulting from industrialised agriculture.
 
The Common Agriculture Policy (CAP) is strongly criticised. Some political leaders of the liberal wing are now keen to propose a complete dismantling of the CAP, in order to "let the market lead the agricultural production." Agriculture should be reformed to better answer the needs of European societies, not to answer the "needs" of the world market. Dumping in third countries has to stop. For all these reasons and others, food sovereignty should be enforced in Europe.

What Went Wrong and How Can We Fix It?
In 1962, just five years after the Treaty of Rome, which founded the European Community, agriculture became the responsibility of the European Community and the Common Agriculture Policy (CAP) was created. Originally, the CAP had four primary goals:

• Increase the productivity of agriculture;
• Ensure food security for European people;
• Increase farmers' revenues to increase their standard of living and to help them invest in their farm; and,
• Offer good quality food at reasonable prices for consumers.

The 1962 CAP was based on the principle of community preference. This principle took shape through relatively high trade barriers and a system of import quotas for products from third countries, while within the European Community, agricultural products circulated freely.

CAP 1992 Reform: Adapting to International Trading Rules:
In 1992, export subsidies replaced direct payments in the "new CAP."  Before 1992, the prices within the EU were maintained relatively high, due to import tariffs and intervention prices. The European products were sold at "competitive prices" due to export subsidies. After 1992, the intervention prices started to be dismantled, while the import tariffs slowly decreased. As a result, agricultural prices within the EU decreased. In order to maintain the farmer's revenue, direct payments were established. Export subsidies remained and European products continued to be dumped in third countries.   

The 2003 CAP Reform: 
The core of this reform was "decoupled payments," which was a sly response to quiet critics. In the 1992 CAP reform, direct payments were linked to production, but in the 2003 reform they were based on historic production. The EU claimed that decoupled payments do not influence prices. However, if a farmer maintains the same level of production, he will continue to receive the same amount of direct payments and will thus still be able to sell his products under the production cost.  
This new CAP raised several problems in Europe. First, this reform "froze" the inequalities of the payments repartition that existed from 1992 to 2003. Second, they reduced the credibility of public support in agriculture - why should farmers receive public funding while they have nothing to produce in return? Third, many small scale family farmers whose cost of production was higher than the agricultural prices stopped producing. That opened the way for further concentration of industrial agriculture and distribution and a decrease in the number of actual farmers, leading to more unemployment and abandonment of rural areas.

Consequences of the New CAP:
For farmers in third countries: Third countries rightly criticise the CAP because it results in European agricultural products being dumped on their markets, through the use of export subsidies. They strongly ask for an end to dumping.

For European farmers: Big farms receive 80% of all direct payments. Small family farms have been badly hurt by price decreases and few direct payments. Agricultural concentration has accelerated, leaving many people unemployed and a rural area increasingly uninhabited.  

For consumers: Decrease in agricultural prices has not led to price cuts for consumers. As the food supply globalises, it becomes more difficult for consumers to know how food is grown and where it comes from. The food chain democracy is threatened.   

For the environment: Industrialisation of farms has led to more single species crops at the expense of biodiversity. The globalisation of food supply means more transport, more waste, and a growing threat to climate change; the industrialisation of agriculture means more pesticides, more nitrates and worsening conditions for farm animals.

For agribusiness: Agribusinesses have been the main beneficiary of the CAP. They buy cheap raw materials from farmers and increase their margin. The opening of markets allows them to move production to countries where labour is cheap and environmental regulations are lax. 

Europe Needs Another Agricultural Policy!
A growing number of European citizens are deeply concerned about agriculture and the quality of food. Mad cow and foot and mouth diseases have raised consumer concerns about how far the industry will go to reduce food production costs. People are already aware of the environmental damages resulting from industrialised agriculture.  

The CAP is thus strongly criticised. Some political leaders are now keen to propose a complete dismantling of the Common Agricultural Policy, in order to "let the market lead the agricultural production." This would of course be the worse solution: Agriculture should be reformed to better answer the needs of European societies, not to answer the "needs" of the world market. Dumping in third countries has to stop. For all those reasons, people's food sovereignty should be enforced in Europe. 

This can be achieved though the following:

• Supply management: production levels need to be adapted to the domestic European needs;
• Stop all export subsidies;
• Link prices to the average production costs in Europe;
• Develop policies that prevent further agricultural concentration;
• Import regulations: the European markets need protection from cheap agricultural imports;
• Subsidies to help farmers improve the environmental compliance of their farm, to help young people invest in agriculture and to help farmers working in less favoured areas. As long as subsidised production is not exported, it does not lead to dumping and unfair trade.

What can you do?

• Contact your EuroDeputy: Ask her or him to support a food sovereignty oriented CAP.

• Write a letter to the Agriculture Commissioner, Mariann Fischer Boel, to urge the European Commission to reform the CAP towards food sovereignty: <Mariann.Fischer-Boel@cec.eu.int>

• Support small scale family farms. Buy products directly from the farm or on local markets. 

What Opponents of the CAP are Not Telling Us
Critics of the Common Agricultural Policy (CAP) claim that the CAP is too expensive and therefore demand that the EU cut down considerably its agricultural budget. According to the CAP opponents, it is not acceptable that farmers, who account for less than 5% of the EU population, receive 40% of the European budget. They want to make us believe that "agriculture belongs to the past".

The agricultural budget: 40% of what?
First of all, although the opponents are right in saying that the Common Agricultural Policy (CAP) accounts for nearly 40% of the EU total budget, they fail to mention that the EU budget represents less than 1.2% of the European gross national product (GNP). This is a very small figure compared to national budgets, e.g.: the EU annual budget is about 110 billion euros, while the state budget of France amounted to 266 billion euros in 2004 (20% of the French GNP).

Apart from 'the regional cohesion fund', which accounts for 34% of the EU budget, the CAP is, to date, one of the few EU wide common policy. In other words, agricultural policies are no longer made at the national, but at the EU level. National authorities implement decisions taken at the EU level and adapt them to their national context. Therefore, this division of competences is also reflected in the budgets: the national budgets for agriculture have been transferred to the EU level.

In order to measure the real public expenses for each sector, one needs to add expenses at the national level plus expenses at the EU level. This reckoning shows that agriculture accounts for only 0.3% of total European public expenses (i.e. EU + member states), while 2% are spent for research and development. In Europe, 40 billion euros are spent for agriculture every year, which corresponds roughly to the amount that France spends annually for its army.

If we want the EU to be able to develop common policies in domains such as research and development, industry or transports, it is essential to increase the EU budget. Instead, the leaders of the main net contributing countries (Germany, France, the Netherlands, Sweden, Luxemburg and the UK) are asking to further reduce the EU budget to 1% of gross domestic product (GDP). This happens at the very moment when a financial effort is needed from the richer countries in order help the new member states catch up with the social and economic level of Western Europe!

Do really only 5% of the European population benefit from the CAP?
It is devious to claim that only farmers benefit from agricultural policies. Since 1962, the main goal of the CAP has been to ensure that all Europeans have access to sufficient and good quality food. As long as humans need the fruits of the earth to feed ourselves, agriculture will remain a pillar of our societies. Agriculture has a bright future ahead!

In order to preserve food security in the European Union, it is necessary to ensure that the people who produce our food have a decent income, at least at the minimum income level guaranteed in each country. To date, farmers are, in all European countries, the socio-professional category with the lowest income. Every minute a farm disappears in Europe, because agricultural revenues are no longer sufficient for families to make a living. Can we, under these circumstances, claim that farmers are privileged?

Should agricultural subsidies be suppressed?
The attack launched by the critics of the CAP against agricultural subsidies is not totally unjustified. The direct payments, implemented from 1992 up to now, are not only unevenly distributed among the farmers, they are also deeply vicious.

First of all, let it be reminded that 20% of the farmers, the richest at that, receive 80% of the payments. Entire sectors of production have been excluded from payments (fruits and vegetables, pork, wine), while others swallow up the whole budget (grains, beef, sugar).

Moreover, direct payments are meant to allow deep cuts in agricultural prices, far under the costs of production. Over the past ten years, the European Commission has been decreasing the guaranteed prices for almost all agricultural products: direct payments are meant to compensate these price decreases. The European farmers are not the beneficiaries of this policy, but they are, all the same, being accused of spoiling EU money!

This cut in agricultural prices has catastrophic consequences at the international level. More than 50% of the poor people in the South make a living only from agriculture: the competition of cheap EU, Brazil or US agricultural products and the world price decrease undermine their revenues. Their governments are not even allowed to use the only tool that poor countries could afford - import barriers - because this is forbidden by the World Trade Organization (WTO).

This trend benefits mainly the agro-food industry and the retailing sector, which can buy "raw materials" at prices far under the costs of production, all the while selling their products at high prices to the consumers. These companies increase their margins to the detriment of tax-payers, farmers and consumers.

Nevertheless, not all agricultural subsidies have these vicious effects. Agriculture needs funds to invest in more environmental-friendly structures, to help young people settle on a farm, to maintain farms in less favoured areas, to develop small agro-food units all over Europe... What is even more important than funds is the regulation of the agricultural and food markets.

Change the Common Agricultural Policy, YES, dismantle it, NO!
With the current prices, removing the direct payments would result in the end of farming in Europe and, consequently, in the end of European food production. Do we really want to be dependent on the United States, China or Brazil for our food? Do we really want our countryside to be deserted? Do we really want to lose tens of thousands of farming and agro-food jobs in the midst of a deep European employment crisis?

If we want Europe to keep producing its food and to maintain lively rural areas, we need to give farmers the possibility to make a living. We need to pay them for the work they do.
The decrease in direct payments that some critics of the CAP are asking for can only be implemented if agricultural prices are consequently increased. Agricultural prices need to cover the costs of production, including a decent income for farmers.

The conditions to increase the agricultural prices are:

• guaranteed prices at the levels of the average costs of production in Europe;
• supply management to prevent structural surpluses; and,
• import tariffs towards low price agricultural imports.

The Common Agricultural Policy needs to be changed: not to the benefit of the WTO, international markets or transnational companies, but to allow agriculture to fulfill its economic, social and environmental mission.