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The European Union’s Common Agricultural Policy — also known as CAP — is a 58-billion-euro system of farm aid that accounts for the bloc’s biggest single budget expense. And it has long been a punching bag for euroskeptics.
The UK press for years excoriated the “butter mountains†supported by EU money. Even after production quotas went away, critics accused the EU of trade protectionism meant to squeeze rivals. The EU’s defense is that the system is more market-oriented and eco-friendly than it used to be.
Today it’s no longer just the Brits grumbling. In fact, the UK’s looming departure from the EU may leave a 98 billion-euro hole in the next EU budget and that shortfall has exposed deep discontent on the continent.
Germany is loath to fill the gap and wants individual member states to contribute more for farm subsidies, something France is resisting. Unlike some of its thrifty neighbours who want to keep a lid on costs, France wants a more ambitious system. French President Emmanuel Macron is fighting the view popularised by author Michel Houellebecq and others that Brussels is too weak and beholden to free trade to defend France’s local terroirs from competition.
It would be easier to build popular support for a bold new CAP if its hypocrisies weren’t so apparent to voters. The system only costs around 0.4% of the EU’s gross domestic product, but it’s distributed in wildly unequal ways. Europe’s capitals are frequently awash in tales of well-heeled landowners receiving millions in EU aid which should ideally go to those who actually need a financial boost. One well-known statistic is that about 80% of EU agricultural aid goes to the top 20% of farmers; in absolute terms, according to 2017 data, some 125,000 beneficiaries get around 12.9 billion euros in aid. That’s about 103,000 euros per farmer.
Given the EU is advertising itself as a “geopolitical†defender of the Western liberal order and protector of citizens’ way of life, another awkward problem with the CAP is the corruption and cronyism it fosters within. More accountability and transparency would help, as would the centralised ability to link EU aid to recipients who have a healthy respect for the rule of law and democracy. But member states would have to agree to give up the power they enjoy when it comes to allocating aid.
One idea raised by Alan Matthews, professor emeritus of European agricultural policy at Trinity College, is to tie aid to something that’s popular and a top priority for the new European Commission — environment. Rather than just call for a hard cap of, say, 50,000 euros per beneficiary, he suggests a soft cap above which aid would be tied to climate-friendly, sustainable farming initiatives. Big farms, however politically-connected, would have to show they can offer a public good in exchange for public funds.
This is superficially the same message being sent by the UK government to its own farmers as a way to replace EU subsidies after Brexit: Aid should be earned by eco-friendly initiatives, not paid by the hectare. It’s easier said than done, and the state of UK agriculture without membership in the EU’s single market is hard to predict. But considering it will take time, money and political trade-offs to improve the EU’s flawed system, a small step like this is surely worth it.
—Bloomberg
Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes