Peter Gallagher

“Fol­low­ing sev­eral weeks of con­sul­ta­tions, the Euro­pean Com­mis­sion is expected to draw up a report on poten­tial changes to the CAP in mid-summer. ” Extract from ICTSD • EU Farm Com­mis­sioner Launches Debate on Subsidies

I bet there are no surprises.

The over­all strat­egy for the Com­mon Agri­cul­tural Pol­icy beyond the next bud­get hori­zon (2013) is already evi­dent in the chart. It shows that nom­i­nal expen­di­ture in €bil­lions is being held nearly steady—or ris­ing just slightly— despite the enlarge­ment of the Union. But the value is falling in real terms (and as a pro­por­tion of GDP). This strat­egy plays to the cash illu­sion of farm­ers (assum­ing they still have such illu­sions) while keep­ing the lid on their incen­tive to expand pro­duc­tion, which only adds to pub­lic stock woes and diverts the bud­get into dis­posal expenses (export subsidies).

But At 0.4% of GDP, the CAP still rep­re­sents sixty per­cent of all expen­di­ture by the Union. So sixty-years on from its launch, the mad­ness of this giant re-distribution machine continues.

The more ‘vari­gated’ dis­tri­b­u­tion of the funds diplayed in the chart—illustrating ‘CAP reform’—is a bit of fur­phy. The ‘cou­pled’ and ‘de-coupled’ pay­ments direct to farms and the ‘rural devel­op­ment’ expen­di­ture are nearly fun­gi­ble sources of income for farm­ers. They all pay to keep farm­ers in a busi­ness where world mar­ket prices tell them they should not be (or would tell them were it not for the import barriers).

It’s ironic that the Com­mis­sion has enti­tled this pub­lic con­sul­ta­tion as “2013, Your Ideas Mat­ter…”. Because ideas have long been junk where the CAP is con­cerned; only inter­ests have any force.