The Luxembourg Presidency of the Council of the European Union 2005

The Luxembourg Presidency of the Council of the European Union 2005

URL (Internet address) : http://www.eu2005.lu/en/presidence/domaines_politiques/agriculture/

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Agriculture and Fisheries

The Agriculture and Fisheries Council brings together the ministers for agriculture and fisheries in a bid to formulate a common policy and take and implement decisions in these two fields. The ministers for agriculture meet once a month on average to debate common policy, markets and prices, rural development, food safety and animal health. The ministers for fisheries discuss the Common Fisheries Policy.

Common Agricultural Policy
Common Fisheries Policy

Common Agricultural Policy

The Common Agricultural Policy (CAP) has played a crucial role in European integration for many decades. The CAP was one of the first areas in which the Member States agreed to transfer sovereignty to the Community so that uniform, or at least harmonised, rules could be applied to this common policy.

A number of objectives were formulated when the CAP was put in place. Initially, the primary concern was to guarantee sufficient food for the whole population. The principal objective was therefore to increase agricultural productivity. Other objectives are derived from this initial imperative, such as guaranteeing an equitable standard of living for the agricultural population, stabilising markets and ensuring secure supplies of foodstuffs at reasonable prices for consumers.

The common market organisations for the main agricultural products were undoubtedly the most important tool used by the EU. This organisation of markets guaranteed producers a price higher than the price on the world market for their products. Import levies were introduced which protected producers against imports of cheaper competing products. When internal prices fell below a particular threshold, the market organisations had various instruments with which to intervene in the market and thus re-establish equilibrium. Against this background, the CAP rapidly achieved its objectives. At this point, its success was so impressive that it had to be adapted quickly to safeguard control of production in some sectors.

During the 1970s and 1980s, it became abundantly clear that the policy had become inappropriate to a situation where the European Economic Community had become a net exporter of a range of products. The infamous production surpluses, soaring budget expenditure and conflict with our trading partners were the result.

The EEC began to establish restrictions on quantity to limit supply, for instance, by introducing a quota system in the milk sector in 1984.

Due to a rise in the number of trade disputes, international pressure to continue with the CAP reform increased. It was therefore hardly surprising that the CAP was drastically reformed in the early 1990s, due in particular to negotiations within the World Trade Organisation (WTO, Uruguay Round). It was agreed at the WTO that export subsidies and internal aid had to be reduced, and that import duties had to be lowered. This approach was based on a reduction in guaranteed prices and on compensation for falling prices in the form of direct income support payments. The principal aim was to gradually align the prices adopted within the EU with the (lower) level of world prices.

The decision of the Berlin European Council (1999) on Agenda 2000 was a new and important stage in this process, against a background of liberalisation of world trade and enlargement of the Union.

In our prosperous 21st century Europe, affluent citizens need no longer worry about having sufficient food. However, they are extremely critical about the way their food is produced and pay close attention to the environment, food safety and quality as well as animal welfare.

The aim of Agenda 2000 was to continue to adapt the CAP to modern requirements. It reformulated and extended the established aims. The new challenges were to:

1) make European agriculture more market-oriented and sharpen its competitive edge;
2) enhance food safety and quality;
3) ensure stable agricultural incomes;
4) integrate protection of the environment and nature into agricultural policy;
5) develop the viability of rural areas;
6) simplify policy and reinforce decentralisation.

Rural development is currently confirmed as the CAP’s second pillar. There is no doubt that the reform paved the way for considerable progress. Agricultural markets in the Union are characterised by a better balance between supply and demand. The EU’s agricultural surpluses (butter, beef, cereals, etc.) have been consigned permanently to the past. Furthermore, the volume of export refunds was reduced from EUR 10 billion at the beginning of the 1990s to EUR 3.4 billion in 2002. All these developments represent a solid foundation on which to broaden negotiations with the WTO.

For all this, however, not all the objectives of the reform have been achieved. This is particularly true of the CAP’s capacity to meet the challenges of a modern society. Recent crises clearly reflect this situation, with consumers increasingly concerned about how foodstuffs are produced and about the support and aid allocated to agriculture. This social concern and the new WTO negotiations are the principal reasons for carrying out a new reform of the CAP.

The major features of the "new CAP" are the:

  • single payment per holding for EU farmers, irrespective of output. Limited coupling can be maintained to avoid production being abandoned;
  • subordination of this payment to compliance with environmental, food safety, animal and plant health and animal welfare standards, and the requirement to maintain all farmland in a satisfactory agricultural and environmental condition ("ecoconditionality");
  • stronger rural development policy with increased financial resources characterised by new measures to promote the environment, quality and animal welfare, and to help farmers apply Community production standards from 2005;
  • reduction in direct payments ("modulation") to large farms in order to finance the new rural development policy;
  • financial-discipline mechanism that seeks to guarantee compliance with the agricultural budget set up to 2013.

Common Fisheries Policy

The EU fishing fleet is the fourth largest in the world. The Common Fisheries Policy (CFP) has applied to this fleet since 1983, and has provided the Community with a judicial system and a range of management instruments for running the sector. The fisheries policy is based on four principles:

  • regulation of fish stock exploitation, maintenance and management;
  • regulation of the organisation of fish and fish-based product markets;
  • rules governing the structural problems of fisheries;
  • international relations.

The fisheries policy strongly advocates conservation and improvement of fish stocks exploited by the fleets. In order to protect and manage these stocks in Community waters, the CFP introduced an instrument to limit catches by means of a quota system for the Member States concerned. Each year, the Council establishes quotas for a broad group of species which are subject to commercial fishing.



Last update of this page on : 29-12-2004