【Series】 The Common Agricultural Policy after 2013 in EU: Part 3 (Nov. 13, 2013)


EU’s new Common Agricultural Policy to focus on fairness

Senior Staff Writer, Masaru Yamada

The European Union’s new Common Agricultural Policy will be on the move in the beginning of next year. The new CAP will provide more protection for eco-friendly farms and young farmers, while cutting payments to large-scale farms owned by major companies, royal families and aristocrats.

Amid the wavering European economy, the main focus of the two-year discussions has been how to gain support of taxpayers. The characteristics of the CAP as an income compensation system has weakened, and the new CAP places importance on maintaining fairness and benefiting farmers who contribute to the society.

The history of the CAP has been the history of reform, and the new CAP is not an exception. One major point of the new policy is how to respond to the critical eyes of the public. According to a website which monitors the payments of CAP-related subsidies, a farm owned by the British royal family received payments worth nearly JPY 200 million in the last three years.

Toshinobu Kitabayashi, head of the Worldwide Agricultural Policy Information Center, explained that in discussing the new policy, the parties concerned agreed they can no longer ignore criticisms that small number of aristocrats and major companies are receiving huge amount of subsidies.

The new policy is aimed at ensuring fairness by cutting payments to large-scale farms and setting a maximum amount for the payment, while increasing payments to small farms and young beginning farmers. It is noteworthy that the new CAP faces the opposite direction compared with the ongoing discussions on agricultural reform in Japan, which aims at focusing on supporting large-scale farms.

Another major factor of the new CAP is specifying the reasons for providing payments. One example is the introduction of “greening,” direct payments to farmers who meet environmentally-friendly standards. Previously, farmers would qualify for the full single payment – the EU’s main agricultural subsidy scheme offered based on areas of agricultural land – and other direct payments if they comply with the so-called “cross-compliance” requirements which ensure a minimum level of farmland maintenance.

Stricter standards are introduced under the new CAP, and payments to eco-friendly farmers, which account for 30 percent of all payments, will be reduced unless farmers meet stricter requirements concerning the environmental conditions of their lands. For instance, large-scale farms are required to grow at least three different crops, as growing only one type of crop will give adverse effects to biodiversity.

In order to respond to diversifying needs in different member states, the new policy also enables member states to adjust the amount of payments according to geographical conditions and the amount of yields, reflecting a major policy shift of the EU which had been aiming at establishing a simple, uniform system.

Because they needed longer-than-expected time to decide on the new policy, the actual changes will not take effect until 2015.

Starting on Monday, November 11, European cuisine using European cheese, ham and wine has been provided at 10 famous restaurants in Tokyo, as a part of the promotion campaign of European agricultural products in Japan, led by Dacian Ciolos, European Commissioner in charge of agriculture and rural development.

The EU is eager to promote agricultural exports, as the region, which had been a net importer of agricultural products, turned into a net exporter since 2010. In 2012, the region marked a record high agricultural trade surplus of 12.6 billion euros (JPY 1.66 trillion), backed by strong exports. The EU report on agricultural trade policy in 2012 starts with a following sentence: “The times where the EU continuously recorded a negative trade balance seem to be over.” With this confidence, the EU is pushing their products heavily in Japan.

The major driving force of strong exports is the expanding sales of European brand processed foods such as wine, whisky, cheese and chocolate. Although agricultural products from Europe are priced higher than those from Brazil and Australia, consumers of importing countries are willing to buy them because of their traditional and geographical values.

Amid declines in CAP-related budgets, the export promotion of high-quality processed foods has become the main pillar of the EU’s agricultural policy. The EU hopes to maintain its competitive advantage by strengthening the system of geographical indications aimed at protecting reputation of goods with specific geographical origin. Ciolos’ visit to Tokyo indicates the EU’s intention to urge Japan to step up geographical indication protection efforts in the negotiations on Japan-EU economic partnership agreement.

(Nov. 13, 2013)

This entry was posted in Food & Agriculture and tagged . Bookmark the permalink.