While the EU's Common Agricultural Policy (CAP) persists with its central focus of fostering competitiveness and exports of European agribusiness, it will continue to undermine small-scale farming and create greater food insecurity in the global South.
This report is still a draft version. On October 12 the Commission’s legislative proposals for the new CAP will be presented. The final version of this study will integrate these proposals in order to be useful into the next year when the EP and the Council have their discussions on the CAP.
Introduction to report
After several rounds of reforms, the EU’s Common Agricultural Policy (CAP) is once again facing a comprehensive overhaul.By 2013, the current CAP comes to end and the debate has started on its future after 2013. The discussion on the €57 billion spent on the CAP today –amounting to 40 percent of the EU budget – takes places against the background of a dramatic worsening of the global food crisis together with rising and more volatile food prices. For 2010, the number of people in hunger is estimated at 925 million, up from 833 million in 2000-2002. But although the Common Agricultural Policy strongly influences the state of poverty and food insecurity in the world, its external dimension is barely taken into account in the current debate.
The European Union is a leading world power in agricultural trade: It is the largest exporter of processed food, the second largest exporter of dairy and pork and the third largest exporter of poultry and wheat. Many of these products benefit from generous CAP subsidies awarded to European farmers and food processors. At the same time, the EU’s free trade agreements (FTAs) force developing countries to open up their markets for European surplus production which has been stimulated by generous CAP support. But local farmers and processors in the Global South who cannot compete with subsidised European goods face the risk of being displaced by unfair competition.
The EU is also a large importer of farm products, particularly animal feed like soybeans, thus occupying millions of hectares of farmland abroad which cannot be used for local food production anymore. Therefore, any changes of the EU’s demand and supply have strong impacts on agriculture and food security in the world.
In November 2010, the Commission presented a communication outlining options for the future CAP and its contribution to achieve food security. However, despite some welcome changes – particularly a fairer distribution of subsidies – it is still based on productivity and global competitiveness of the European agri-food industry. According to the Commission, the EU should contribute to meeting “growing world food demand, expected by FAO to increase by 70 percent by 2050”.
The growth in demand could offer “an opportunity for EU food exporters”, but exploiting it would require “to enhance the competitiveness and productivity of the EU agricultural sector”. In the Commission’s vision, agriculture has to serve the needs of the export-oriented food business: “A strong agricultural sector is vital for the highly competitive food industry to remain an important part of EU economy and trade.” In this vision, the main role of agriculture is to supply cheap raw materials to enable the food industry’s export success.
The UN Special Rapporteur on the Right to Food, Olivier De Schutter, criticises the EU’s focus on productivity and trade, since food availability as such does not guarantee its adequate distribution: “The question of global food security cannot be reduced simply to a problem of supply or production.” If food production would rise in tandem with further marginalisation of small-scale farmers in the South, “the battle against hunger and malnutrition will be lost”. Yet, further marginalisation of small farmers is precisely the risk associated with ongoing dumping of EU food products on world markets and the growing imports of particularly feedstuffs for the European livestock industry.
By fostering competitiveness and exports of European agribusiness, the EU ignores the main challenge for food insecure countries today: the reduction of their import dependency. Since the 1980s, the majority of developing countries switched from net exporters to net importers of food. Nowadays, two thirds of them suffer from food trade deficits and growing expenses for purchases of cereals, dairy products and vegetable oils on the world market. In order to reduce their vulnerability against price spikes and recurrent food crises, these countries urgently need a policy shift that fosters domestic agricultural production and limits import dependency. Given Europe’s international responsibility in the fight against hunger, the EU should make every effort to support such a shift. But unfortunately, the CAP in its present form heads in the opposite direction. It deepens import dependency in the South to secure export markets for the European food industry.
Past reforms of the Common Agricultural Policy largely neglected its contribution to poverty and malnutrition. Although European policy makers adapted the CAP to changes of the international political landscape, they never seriously tried to assure its coherence with stated development objectives like the eradication of poverty and hunger. For the EU to fulfill its global responsibilities, a far more profound reform of the CAP would be required.
The present publication aims to contribute to such a reform. It describes the history of the Common Agricultural Policy, its several reforms, its main beneficiaries, its impacts on agriculture, poverty and food security in the Global South as well as the linkages between the CAP and European trade policy. It analyses the impacts of the scramble for the cheapest raw materials, the exports of cereals, dairy and poultry products as well as the effects of the growing demand for feedstuffs, by far the most important agricultural commodity imported into the European Union. The final recommendations outline some of the necessary changes the EU would have to implement so that the CAP could effectively contribute to the eradication of poverty and hunger and the realisation of global food sovereignty.