Common Agricultural Policy

The European Union’s common agricultural policy (CAP) addresses a wide range of issues, including agricultural support, rural development, minimum strategic self-sufficiency in the principal agricultural commodities and growing crops for biofuel production.

Since its adoption in the 1950s, the CAP has changed profoundly. Prior to 1990, it was primarily an effort to guarantee self-sufficiency in the production of basic foodstuffs. However, this resulted in an inflexible support policy culminating in surplus production. Today the notorious meat and butter mountains and rivers of milk are a thing of the past. In fact, the EU has been a net importer of certain commodities for several years.

Despite this, a certain minimum strategic level of self-sufficiency in the main agricultural commodities (cereals, milk products, meat) is imperative. The Czech Republic’s point of view is that further major reductions in production capacities would lead to less competition on the market and a rise in consumer prices. At present, an increasing emphasis is being placed on food quality and safety, consideration for the environment, handling of agricultural risks and crises, the EU’s ability to provide citizens with foodstuffs at affordable prices and growing crops for fuel production.

Rural areas and renewable sources

It is not just the support of agriculture that the CAP concentrates on: another focus of attention within the CAP these days is rural development. Many young people are deserting the countryside to seek their fortunes in towns. This trend has led to the depopulation of rural areas. The Czech Republic backs a long-term commitment to the sustainable development of rural regions and supports a stronger CAP in this field. However, due to the geographic, economic and historical conditions of the Czech Republic, this development cannot be decoupled from agricultural products in the long term. This would have negative impacts on the environment and the economy and, by extension, on social standards in rural areas with all the consequences this entails.

The common agricultural policy is also adapting to new opportunities, such as growing crops for biofuel production and biomass for electricity and heat production. The use of biomass cultivated on agricultural land fulfils the conditions for  the restructuring of agriculture, as it replaces food commodities with alternative technical or energy crops. The production and use of alternative crops also safeguards the energy self-sufficiency of rural areas and enhances the attractiveness and competitiveness of agriculture.

Direct payments

In the context of the CAP, agricultural production today is supported by a system of direct payments. Direct payments can be split into two groups. The first group comprises direct payments that have no link to the current production of agricultural commodities and are therefore known as decoupled payments.

The second group comprises direct payments that continue to take into consideration the area of crops, the number of animals or the tons of raw materials produced. These are coupled payments. The first group of direct payments includes the Single Payment Scheme (SPS) in the old Member States and the Single Area Payment Scheme (SAPS) in some of the new Member States (including the Czech Republic). The SAPS system is characterized by its complete separation from production. Payments are made per hectare of agricultural land.

Common market organisation and rural development

One of the CAP’s primary mechanisms is the Common Market Organisation (CMO) for specific primary products and products after their first processing. The purpose of CMOs is to regulate the supply of products in such a way that there is no fluctuation in supply and in the prices paid to agricultural producers, as well as in the prices paid by the processor or final consumer for these products. To this end, various instruments are used, such as production quotas, interventions, tariff quotas for imports and export refunds.

The CAP reform in 2003 resulted in a significant strengthening of the rural development policy due to the fact that direct payments to larger agricultural companies were reduced. The main objective of this policy is to ensure the sustainable and viable development of rural communities and the cultural landscape. Structural changes affect not only agriculture, but whole rural areas. The support and development of rural areas has thus become a central theme of the CAP.

In September 2005, the Agriculture and Fisheries Council adopted a regulation on support for rural development from the European Agricultural Fund for Rural Development (EAFRD). This Fund is geared towards activities seeking to enhance the competitiveness of the agricultural and forestry sector (Axis I), improve the environment (Axis II), support the quality of life in rural areas and diversify the rural economy (Axis III), and the LEADER programme, promoting rural initiatives (Axis IV). One of the significant measures under Axis II is a measure designed to support less favoured areas (LFAs); as of 2010, there will be fundamental changes in approach to the definition of other LFAs. Throughout the EU, these areas have such diverse definitions that it can cause inequalities among the beneficiaries of aid in different countries. That is why this approach needs to be revised and a consistent approach secured throughout the EU. In its role as the country holding the Presidency, the Czech Republic will seek a solution that will help define the principles of delimitation of other LFAs on the basis of comparable and clearly fixed criteria and ensure the fulfilment of the goals of this measure, i.e. the maintenance of the landscape and the support of sustainable agricultural systems that take into account the requirements of environmental protection.

Last update: 16.8.2011 16:01

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