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Common Agricultural Policy reform

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28 January 2011UK Government response to a European Commission consultation on the future of the Common Agricultural Policy (PDF 75 KB) has been published.

5 January 2011New Common Agricultural Policy must be fundamentally different: Spelman. Caroline Spelman’s speech at the Oxford Farming Conference 2011.

November 2010 – The European Commission released its ‘Communication on the CAP towards 2020′ on 18 November 2010 – starting negotiations that will culminate in the next round of the CAP being implemented in 2014.

It’s a good chance to have your say on the future of the Common Agricultural Policy. The Communication sets out options for reform and invites the public to respond to a Consultation that will influence legislative proposals that are set to emerge in mid-2011.

Defra encourages organisations and members of the public to respond directly to the Commission’s Consultation – we ask you to also copy your responses to cap.reform@defra.gsi.gov.uk to help us to monitor reactions to the Consultation from across the UK and more widely across the EU.

A series of Defra hosted meetings for key stakeholders relating to the CAP reform negotiations began on 15 December. Organisations representing the farming, food and environmental sectors in England met to discuss the next steps in the reform process. Jim Paice, Minister of State for Food and Farming reflected on the negotiations and the emerging UK position, and heard from organisations such as the National Farmers Union, RSPB, Country Land and Business Association, Dairy UK, Compassion in World Farming, and Friends of the Earth about how they will respond to the Commission’s consultation. Further meetings will take place throughout 2011.

What is the Common Agricultural Policy?

The EU’s Common Agricultural Policy (CAP) is the framework under which farmers operate. It sets out a range of farming, environmental and rural development activities as well as controlling EU agricultural markets. It is the single largest common policy across the EU.

Reforming the CAP to prepare farmers for future challenges and opportunities is an important UK priority. A future CAP must enable a thriving and sustainable agricultural sector that delivers good value for farming competitiveness, taxpayers, consumers and the environment.

Farmers need to make a genuine contribution to the objectives of the EU2020 Strategy. However, the current CAP hampers the achievement of these objectives, and it is not affordable. The UK therefore needs genuine and ambitious reform of the CAP. Competitiveness must be at the very heart of agricultural policy to ensure farmers can meet their full potential. Reform must prepare the agriculture sector for the long term, beyond 2020, facilitating sustainable food production.

A future CAP must be affordable and significantly better at delivering important public benefits. Part of this must also be about simplifying the future CAP, and reducing the burden of regulation on farmers.

CAP Reform – what happens next

The EU budget is organised under seven year frameworks (‘Financial Perspectives’), the current one runs from 2007-2013. The CAP represents over 40% of EU budget expenditure and is the most expensive of EU policies. When looking at reform of the CAP, this will mean preparing a CAP for the Financial Perspective 2014-2020 (‘post 2013’).

The 2010-2012 period is a key one for the CAP reform debate in the EU. The EU Budget Review looks at all EU expenditure, including the CAP. A Commission White Paper on the Budget Review was published on 19 October 2010. This now helps to set the direction for further reform of the CAP for the next EU Financial Perspective.

This has now been followed by the release of a Commission Communication on the CAP . The CAP Reform discussions now begin in earnest in preparation for the discussions on the draft CAP legislative proposals, which we expect to be released by summer 2011. In anticipation of this, the Commission has launched an online consultation (see above), which Defra encourages all interested parties to respond to.

Discussions in the EU are only just beginning. As they progress, Defra will be working closely with key UK stakeholders, other Member States and the Commission to press for ambitious reform of the CAP.

If you want to get in touch with the team about reforming the CAP, please contact cap.reform@defra.gsi.gov.uk

Background to the CAP

The CAP dates back to the early days of the European Community. It was designed to boost European food production in the face of post-war shortages and increase farm incomes. These short-term aims were achieved through market price support, but an enlarged EU and changing agriculture objectives mean the CAP has had to evolve.

CAP has undergone a number of major and minor reforms since its origins, the last one being the CAP Health Check, which concluded in 2008. Over the years, CAP has moved away from traditional subsidies of the past, like coupled payments and market price support, and the rural environment has had an increasing role. However, the CAP is still over 40% of the entire EU Budget, with over one third spent on Direct Payments alone.

Broadly speaking the CAP can be divided into 3 areas:

Direct payments to farmers (CAP Pillar 1)

Direct payments to farmers accounts for around three-quarters of the CAP Budget. They are a direct subsidy to farmers allocated to EU Member States based on historic criteria. They replaced previous coupled payments and market measures that were phased out when levels of production became too high.

More information on direct payments to farmers is available.

Market management measures (CAP Pillar 1)

The EU uses processes that control the market of agricultural goods in and out of the EU, such as export subsidies.

Rural Development (CAP Pillar 2)

Just under one-quarter of the CAP is spent on rural development measures under three broad categories:

  • improving competitiveness
  • improving the environment and countryside e.g. through agri-environment schemes
  • improving quality of life and economic diversification for rural communities.

As farmers manage over 70% of EU land and are intricately linked with the environment there is real public benefits in ensuring farmers manage EU land sustainably.

In England, there are already over 58,000 agri-environment scheme agreements in place, covering more than 62% of available farmland. These schemes ensure farmers are delivering specific environmental benefits.

More information on rural development under the CAP is available.

Page last modified: 28 January 2011