MODULE ASSESSMENT ESSAYS

MODULE ASSESSMENT ESSAYS
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ESSAY ONE (NUMBER FOUR)
What are the objectives of the Common Agricultural Policy? How successful has the European Union been in achieving these objectives?
The Common Agricultural Policy (CAP) has been responsible for regulating agricultural activities in the European Union and despite its success it has also been one of the complex, and controversial farm policy of all time. The CAP was established through the Treaty of Rome in the year 1957, with the aim of progressive creation of a common market as well as harmonization of the economic policies directly affecting agriculture among the initial six member states which included West Germany, France, the Netherlands, Italy, Luxembourg and Belgium which were the original signatories (Baldwin and Wyplosz, 2006). Since then the European Union has undergone an extensive expansion but CAP has retained its aim and objectives irrespective of the considerable reforms that have already been done on it. Since the inception of CAP up to now it has been capturing a great share of the EU budget. However, as a result of changing dynamics of economy, global market and climate, since the early 1990s the CAP has undergone substantial reforms, reflecting changing political priorities and societal demands (Fennell, 1997).
These reforms in agriculture include lowering prices, ensuring food quality and safety as well as assuring stability of farmers' incomes. Other reforms are involved on issues of animal welfare, environmental pollution, and finding alternative income opportunities for farmers. In particular, there are the Agenda2000 reforms which prioritised on rural development and farmers support. There is also the decoupling reform of 2003 that were aimed at eliminating subsidies in some crops in order to promote production of others. In addition, there was also the sugar regime reform of (2005–2006) aimed at subsidizing sugar produced from sugar beet in order to promote their cultivation (Baldwin and Wyplosz, 2006).
Despite this background the CAP, this policy has also continued to be a hotly contested area mainly due to its greater extent of budgetary allocations and also because it has been the greatest user of community funds in the European Union. The main objectives of CAP were fixed in the year 1957 in the Treaty of Rome and are outlined in Article 63 of the treaty (Baldwin and Wyplosz, 2006). Hence these objectives are; (a) increasing agricultural productivity through promotion of technical progress and making sure there is rational development of agricultural production as well as ensuring that factors of production are optimally utilised, particularly labour; (b) to ensure that the agricultural community has a fair standard of living, specifically by increasing the earnings of individual persons involved in agriculture; (c) stabilising markets; (d) assuring the farmers the availability of supplies; (e) ensuring that food supplies are sold at reasonable prices (Ackrill, 2000).
These objectives of the CAP were set at a time when employment and the share of agriculture in GDP were considerably higher compared to today, and at this time memories of food shortages that were experienced after World War II were still strong and fresh. Consequently, the main objectives of the CAP were to ensure that the agricultural community living standards were fair as well as assuring that food supplies were accessed at reasonable prices (Fennell, 1997). In order to achieve all the objectives stipulated in the CAP the member states had to harmonise with the aim of creating a common agricultural market in addition to other essential measures that were implemented to ensure successful achievement of the CAP objectives.
However, it can be noted that CAP was mainly established due to the significance of agriculture in the development of the European Union member states, as a result of a variety of functions it is expected to fulfil. For instance, agriculture as a result of CAP is contributing to considerable supply of citizens of the European Union member states with high quality and safe food in a competitive market. This occurs while at the same time maintaining valuable cultural landscapes throughout the European Union region by ensuring there is sustainable land management in addition to helping rural areas to remain viable and attractive (Ackrill, 2000). Therefore, agriculture has been essential in contributing to the GDP of the EU member states as indicated in the figure below.
Figure 1: A diagram showing the importance of agriculture in the economy
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Additionally, the European Union’s Common Agricultural Policy (CAP) has been instrumental in aiming at responding to the public demand for the sustainability of the agricultural sector in the European Union member states. CAP has been fostering this by enhancing the agricultural sector competitiveness, preserving the environment, ensuring secure and sufficient food supply while at the same time providing for the agricultural community fair standard of living (Fennell, 1997). Therefore, in order to align the implemented reforms with the CAP objectives, the fundamental reforms that have occurred over time, indicates a demonstration of the proven capacity of the CAP objectives reforms towards responding to economic conditions that are constantly changing in addition to societal expectations and demands (Ackrill, 2000). As a result of this, the CAP has become an essential policy that put emphasis on income support, environment, market orientation and competitiveness, as well as the development of rural areas where most of the agricultural community live (Baldwin and Wyplosz, 2006). This is evident from the considerable budgetary allocation that is committed to CAP on annual basis as indicated in the graph and pie chart below.
Figure 2: A graph showing annual EU budgetary allocation to CAP


Figure 3: A pie chart showing annual EU budgetary allocation to CAP per country


However, in spite of the CAP objectives been not fully achieved the European Union has made a commendable success in the achievement of the greater part of these objectives. For instance, the European Union has been considerably successful in achieving CAP objectives as a result of the reforms undertaken as well as implementation of strategies necessary to ensure these vital objectives to the agricultural community within the European Union are achieved (Fennell, 1997).
Common market organisations have already been established for agricultural products with the aim of protecting European farmers from the ever increasing and stiff international competition as well as supporting internal prices by subsidised exports or intervention purchases. This has been critical in stabilising markets and increasing individual farmers’ earnings both of which are CAP objectives. However, the integrated system of measures provided by CAP has also been vital in maintaining stable prices of food commodities within the EU. This has also been one of the CAP objectives which have been achieved by subsidising production. This is in addition to other handful interventions and measures that have enabled European Union to be successful in achieving CAP objectives.
Application of import levies to specified food stuffs imported into the EU has been essential in ensuring that CAP objectives are achieved. This is mainly because the import levies set by European Union raise the world market prices for such food stuffs up to the EU target price for its agricultural produce, which is chosen as the highest price that is desirable for foods within the EU (Baldwin and Wyplosz, 2006). This ensures that the market prices for produced foods are stabilised (Ackrill, 2000). This promotes agricultural productivity and improves the living standards of the agricultural community as a result of increased financial returns on food stuffs. All of these achievements are part of CAP objectives. This success in achieving CAP objectives has also been attained by introducing import quotas that restrict the quantity of food stuffs to be imported into the EU markets.
Moreover, a continued success achieving CAP objectives has been through direct subsidies that are usually paid to farmers. This has been very essential in encouraging farmers to grow crops that attract subsidies thereby maintaining stable home-grown supplies. These direct subsidies are actually paid on the basis of acreage of the land in which the particular crop that is attracting subsidies is grown, instead of the total quantity of crop produced (Fennell, 1997). This ensures that there is harmonisation and steady supply of all crops that can be grown. However, the undergoing CAP reforms have gradually eliminated these subsidies. However, a success in achieving the CAP objectives on market assurance and reasonable prices for foods has led the EU to introduce 'set-aside' payments and production quotas in the attempts of preventing the overproduction of some foods such as grain, milk, wine that attracted subsidies. This has been necessary in preventing overproduction well in excess of market prices thereby cushioning farmers from making losses as a result of ready market for their foods which increases their earnings thereby improving their living standards (Fennell, 1997).
In conclusion, the CAP has been providing considerable benefits to farmers within the EU amidst the controversy which surround the policy because of its significant EU’s budgetary allocation. This has led ...