‘Once food production is relinquished, indubitably so is independence’

Time to spell out the real cost of the Common Agricultural Policy

SINCE civilisation began, farming has been the keystone of communities, with roots as far as 8000 BC in what was once Mesopotamia. Around farms grew settlements that became towns and cities. Almost every culture across the globe celebrates festivals that chime in with the agricultural calendar, while nearly all religions use symbolism such as reaping and sewing, the seasons, famine and feast.

Yet present day farming is increasingly detached from the simple sustenance of a local demographic, and as modernity ushered in globalisation, farming became more politically weighted than ever before.

In parts of the developing world whole communities continue to rely on local supplies, and are blighted by crop failure and food shortages. Yet in the fast paced, high demand cultures of the most advanced societies, every wont is met via importation while food is exported, feeding the economy rather than the community. Within this complex modern framework was the birth of the European Union’s Common Agricultural Policy, or CAP.

Much like farming itself, CAP was, and still is, the keystone of the European project.

It was 50 years ago that the European Commission proposed a common agricultural policy under the Treaty of Rome, which established a common market between six member states. At the time it was seen as a political compromise between France and Germany, the former being largely agrarian and the latter, more industrialised. German industry was granted access to the French market and in exchange, Germany subsidised France’s farmers.

This element of the Common market was borne out of post war food shortages and represented a neighbourly symbiosis that was extended to the UK 15 years later. Yet since then, CAP has become the subject of widespread criticism, corruption and controversy but remains a central tenet of the current 27-nation Union. Once food production is relinquished, indubitably so is independence.

Until recently, as much as 48% of the EU’s budget was spent on CAP, totalling some 50 billion euros in 2006 alone. The primary recipient of this spending was always France, later followed by Spain, Portugal and Ireland. Yet as equally arable member states join the Union, were they not subject to transitional arrangements, they too would seek large subsidies for food production. It is of little surprise that the very nature of CAP had to change, so the EU pledged to cut the budget to 32% post 2013, the implications of which will be discussed in this month’s Parliament.

So where does CAP stand today? For the last few decades, it involved the combination of direct subsidy payments for specific yield alongside price control inside the Union. Import tariffs on strict quotas of foods from outside the EU enabled Brussels to guarantee minimum prices inside the Union while curbing foreign interference with the internal market. Yet all the while the EU exports zealously outside the bloc.

Reforms of the system currently underway will shift focus away from import controls and the subsidy of specific production and instead concentrate on subsidising land “stewardship”. In crude form, this means more food will be let in from abroad while inside the EU, land will be cultivated for bio-crops and carbon sequestration, for example.

We can see how this is being implemented in Wales under the incumbent Glastir system. Implementation of CAP largely falls under the jurisdiction of individual member states, and in Wales, that lies within the powers of the Welsh Assembly Government. Under Glastir, farmers will receive subsidies per hectare of land converted in line with the European vision of biodiversity, ecology and climate change. Under Pillar 1, farmers may receive direct payments for specific production, often feeding into the EU’s stockpiling initiatives. In this case, large farms received vast amounts on top of substantial turn over, while small farms more keenly felt the wrath of the red tape without such financial incentive. The Glastir scheme, comes under Pillar 2 of CAP, designed to promote rural development, or more recently, green initiatives, focuses on reforestation, water conservation and biodiversity. As such, there is money to be made in shirking former farming methods which garner high yields, in favour of reducing production to turn land over for carbon sequestration. This seems to jar considerably, especially for smaller holdings, with the production based incentives of Pillar 1, and could well invite far more unnatural intensive indoor rearing, or factory farming.

Returning again to the initial objectives of CAP set out in Article 39 of the Treaty of Rome, among them were increased productivity via technical progress, ensuring a fair standard of living for rural communities, stabilising markets and securing food availability at reasonable prices. What we have today is a far cry from the vision 50 years ago, and in its wake we’ve seen huge changes in agriculture that affect not only the European consumer and farmer, but communities across the world.

The European Union has been blasted for purchasing millions of tonnes of surplus produce at fixed prices, then storing it in large quantities (in so-called ‘butter mountains’ and ‘milk lakes’), before selling it wholesale to developing nations. By subsidising the over production of particular crops and adding huge import tariffs for farmers in developing countries, the European Union has been able to overproduce and then dump farmed goods in Third World countries, where they undercut the prices, themselves uninhibited by import levies. In effect, the EU has wittingly throttled agriculture in these countries, forcing them back into economically stunted subsistence lifestyles. Many African and Asian farmers cannot match the cheap competition from Europe, and struggle to provide for their families. According to the 2003 United Nations Human Development Report, the average dairy cow in the European Union received $913 in subsidies in 2000, while only $8 per human was sent in aid to Sub-Saharan Africa.

With a growing population, greater demand and falling food prices, most products in the EU now cost far more to produce than the wholesale price. Add to this steadily increasing importation of foreign foods by large retailers, and it seems to signal the death knell for European farming.

In July’s Parliament, MEPs will debate the so-called Mercosur agreement of free agricultural trade with South America. Among negotiations will be the lifting of importation bans on Brazilian beef, the black gold of Latin America. For those in the know about cattle rearing in Brazil, accusations of slavery, shootings and corruption are common. Slavery on cattle ranches is said to have increased ten fold, while beef farms enjoy paid-for police protection from environmental protesters strongly opposed to the deforestation of the Amazon, 80% of which is said to be a result of increased demand for grazing space. Around a decade ago, imports from Brazil were blocked by the EU, not on the basis of deforestation or slavery, but on the grounds of poor farming practices risking the contamination of the European agricultural chain with diseases such as foot and mouth. Yet in recent years, cattle farms in their hundreds have been approved by European inspectors, a number of whom have been accused of having vested personal interests in many of the larger farms.

Yet back home, the barrage of red tape, alongside hugely varying welfare standards from one country to the next, ensure that perversely, the consumer cannot ever be guaranteed the quality or ethical sourcing of their meat, yet at the same time, British farmers are blighted with costly over-regulation, meted out under cross compliance conditions of single farm payments. For example, electronic identification tagging for sheep (EID) which has proven both expensive and inaccurate, see sheep farmers in Wales risk losing the vital subsidies that keep them afloat if they fail to get to grips with a technology largely unsuitable for upland sheep grazing, the traditional sheep farming of Wales.

CAP has never worked in the UK’s favour. In the early stages of membership, France, whose GDP is slightly lower than that of the UK but who are geographically double our size with a far higher proportion of arable land, received a disproportionate amount in farm subsidies. Due to this disparity the UK secured a rebate. Without it, the UK would pay a net contribution 14 times that of the French. Yet in 2005 the Labour Government agreed for us to give up approximately 20% of the rebate on condition that funds did not contribute to CAP and went only to new member states.

The upcoming CAP reform is likely to focus on phasing out the Single Farm Payment and instead increasingly reward farmers for land stewardship. So while beef farmers in Wales will be forced to plant trees or go bust, consumers will be buying imported, low cost unethically farmed Brazilian beef, reared at the cost of acres of the Amazon rainforest.

The recent world food price crisis renewed calls for farm subsidies to be removed in the light of growing evidence that they directly contribute to increasing global food prices, with a severe impact on developing countries.

But, I also ask, in the case of another world war, what would occur in the aftermath for Europe if all our farms were gone?