Presentation document of the CAP, its historical role and its implementation in the EU and in France
18/12/2017
© Pascal Xicluna / Min.Agri.Fr
The objectives of the CAP are enshrined in the Treaty on the Functioning of the European Union (TFEU). Considered together, the benefits of itsimplementation across the EU make the CAP a European policy for the future for the Union and one of major importance for France.

In successive reforms the CAP has proved capable of evolving to define and update the contract binding farmers to European society. The CAP is a policy that addresses across the board objectives that are economic, environmental, food-related, societal and territorial. It must continue to evolve to match the EU’s new challenges.

The future CAP must therefore help foster the development of agricultural and agrifood enterprises and strengthen the individual sectors (the discussions during the first round table will address these issues), add value to farming’s environmental services and encourage climate, energy and territorial transitions (the second round table will deal with these objectives) as well as managing hazards and empowering actors (this aspect of the future CAP will be discussed in the third round table).

A CAP justified by foundations that remain just as valid today

The CAP was one of the first policies of the European Union and the only one to be completely integrated. It reflects the decision of the Member States to pool their goals and resources in order to rebuild their economies and remedy their dependence on imports for food. From the Treaty of Rome to the Lisbon Treaty (cf. Article 38), agricultural policy has been defined and implemented at EU level.

TFEU Article 39 sets out the objectives assigned to this European Union agricultural policy, specifically: “to increase agricultural productivity”, “to ensure a fair standard of living for the agricultural community”, “to stabilise markets”, “to assure the availability of supplies” and “to ensure that supplies reach consumers at reasonable prices”.

The objectives embodied in the Treaty are the primary source of value-added for Europe. The food sovereignty objective cannot be considered to be achieved once and for all; a recent analysis suggests that the global need for food could increase by between 50% and 69% over the period between 2010 to 2050. (A meta-analysis (by INRA Rennes) of 25 scientific studies into issues under the general heading “Feeding the World in 2050”).

The CAP serves the European Union economy, a leading agrifood producer

By modernising and enhancing the competitiveness of the agricultural and agrifood sectors, the CAP has assured food security for the EU whilst simultaneously developing its economic power, as is attested by the EU’s agrifood trade surplus of over €16bn. (European Commission. Annual Agri-Food Trade Report, 2015).

Agricultural exports reached €129bn in 2015 (7% of all production exported by the EU), amounting to an annual rise of 5.7%, thus consolidating the EU’s position as the world’s leading agrifood exporter (and importer). These trade results, achieved across a wide range of products from all sectors in the value chain, serve to demonstrate the CAP’s role in ensuring the adaptability of an industry that contributes to job creation and growth across Europe.
 

Zoom France

France is the leading agricultural nation in the EU. It accounts for 17% of all European agricultural production, ahead of Germany (13%) and Italy (13%) (Source : Agreste).
Since 2000, the French trade deficit has substantially increased, except in the agricultural and agrifood sector, where the surplus has been maintained. Agrifood products (processed and unprocessed) provide France’s third biggest trade surplus after transport equipment and chemicals, perfumes and cosmetics (Source : Agreste).

External agricultural and agrifood trade (published 2016 – in French). Sales to third countries account for over 35% of France’s agrifood exports (the EU’s leading exporter). Indeed, over 70% of the French trade surplus is with non-EU countries.

 
The CAP’s objectives have evolved to take environmental issues into account

Through rising levels of remuneration for agriculture’s positive externalities, the CAP addresses 13 of the 17 sustainable development objectives central to the European project. The CAP provides a common framework to meet at EU level the challenges of climate change and the issues surrounding biodiversity and the preservation of natural resources on which the EU has collectively given strong undertakings. The CAP provides a set of mutually complementary tools that match the specific characteristics of European territories in order to stimulate the production of environmental public goods. The CAP is also the only policy to facilitate the production of biomass with a view to contributing to the European economy’s transition to a low-carbon economy through development of the bioeconomy.
 

Zoom France

In France, in addition to the implementation of the green payment, the total amount of public funding devoted to agri-environment-climate measures over the period 2014-2020 has doubled relative to the years 2007-2013.
Organic agriculture is growing strongly with, in 2016, nearly 118,000 direct jobs and average annual growth of 8.4% over the last four years (Source : Agence Bio).  In 2015, organic farming occupied 5.7% of utilised agricultural area in France, giving the country the 9th largest national area of organically farmed land (Source : IFOAM/FIBL 2015).


The CAP revitalises rural areas

The EU has 14 million agricultural holdings and the agricultural and agrifood industries represent a total of 44 million jobs in the EU (European Commission. Annual Agri-Food Trade Report, 2015.), a figure twice as large as the number of people
employed in the European automotive and aviation industries combined. The CAP helps maintain farming activity on EU territory in order to stabilise the size of the workforce in these
strategic sectors.

Farmers’ income continues to be substantially lower than the EU average. In recent years, agricultural income stood at between 53% and 64% of average European income (Data for 2007-2013. CAP post-2013: Key graphs & figures. Evolution of agricultural income as a share of average income in the economy (March 2017).
The disappearance of subsidies would lead 30% of holdings to cease operating (European Project FP7 CAP-IRE: Assessing the multiple impacts of the Common Agricultural Policies (CAP) on rural economies" (2011)), mainly in areas where farmers’ presence is essential to the dynamics of the rural fabric and landscape preservation, most notably in mountain areas. Indeed, total support payments across the EU represent on average more than 30% of farmers’ income (Source: CAP post-2013: Key graphs & figures. Share of direct payments and total subsidies in agricultural factor income (2011-15 average).
 

Zoom France

France has 54% farmland (Source : Agreste). On average, subsidies represent 11% of farmers’revenue. This share is above 15% in thirty or so French départements, and even reaches 20% in around a dozen where the focus is largely on extensive forms of livestock production (Source : Agreste. Agriculture’s Economic Results (published 2016 – in French).


The CAP offers a completely integrated policy for a limited budgetary cost 

CAP implementation comes at a cost lower than what would be the case if all the Member States conducted separate agricultural policies (Building our common future – Policy challenges and budgetary means of the enlarged Union 2007-2013. (COM 2004). Related to the total EU population, the CAP budget represents per capita daily expenditure of 30 centimes. Expenditure on the CAP represented 0.38% of the EU’s gross domestic product in 2015. This figure, which has been steadily falling since 1995, is considerably lower than what is spent on agriculture in the developed world. Compared with the United States Farm Bill which, for every dollar it invests, supports an industry that generates $1.80, the European agricultural sector produces over €4 for every euro spent under its agricultural policy (Source : OECD data).