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Farming rethink - 19/11/2008

New EU rules will leave farmers freer to respond to demand.

For the first time in years, EU agriculture ministers will be looking at ways to boost food production rather than curb it when they meet this week to update farm policy.

This is a big change since the days of “wine lakes” and “butter mountains”, when chronic overproduction drove down prices and left many farmers dependent on EU handouts.

Today food prices are soaring and farmers worldwide are struggling to keep up with rising global demand. EU rules should help European farms respond with increased exports.

The ministers will consider various proposed changes, including cutting farm aid, scrapping rules on keeping land fallow and phasing out milk quotas. As with previous reforms, the measures are designed to free up farmers to respond to increasing demand and face new challenges such as climate change, water management, biodiversity and the biofuels boom.

The EU’s common agricultural policy – CAP – has undergone extensive reforms over the last two decades. The last shakeup was in 2003 when the EU abolished production-related farm aid, which encouraged farmers to produce more than they could sell. The new scheme would still support farmers’ incomes but allow them more freedom to grow what the market wants. In return, they must meet environmental, animal welfare and food quality standards.

The commission wants to redirect the money saved into rural development. This would be welcome in the 12 newest EU members, which have had to modernise their farm sectors very rapidly since joining.

The CAP was introduced to provide farmers with a reasonable standard of living, ensure sufficient food at fair prices, and preserve Europe’s rural heritage. Costing about €55bn a year, it accounts for 40% of the EU’s budget. The EU farming sector employs 5% of the working population.

The world saw a sudden and steep rise in food prices this year that triggered protests in many countries. And with demand increasing in expanding markets like China and India, prices are expected to remain high in the near future.

CAP Health check – Frequently asked questions

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