Common Agriculture Policy

More than 50 years ago, the Treaty of Rome established the Common Agricultural Policy (CAP) as a priority of what would later become the European Union. For a significant amount of time the CAP has been the only integrated sectorial policy. There are five major goals included in the Treaty of Rome for CAP:

• to increase agricultural production
• to ensure fair standard of living for the agricultural community
• to stabilize markets
• to assure availability of supplies and
• to ensure that supplies reach consumers at reasonable prices

Today's Europe looks completely different than the Europe that agreed upon the Treaty of Rome. Still, there has been little change in CAP. The relative weight of CAP spending in the EU budget has decreased from an approximately 70% in the 1980s to 40% in 2000s, the subsidies system has also changed, from a production – oriented  system (that resulted in surplus) to a system taking into account the amount of land owned. The political debate around CAP tends to be conservative, with few politicians questioning the utility of the massive subsiding of agriculture. Unlike the political debate, the state of the art in academic research on CAP converges almost unanimously to the conclusion that it failed to reach the above mentioned objectives. In the most favorable evaluations, CAP is seen by scholars as a very costly method to partially reach some of these objectives. By contrast, the negative side effects are richly documented.

The main charges against CAP are the following:

• Far from being the protective net for small farmers idealized by the public, CAP encourages large agribusiness. The big industrial farms grab the lion`s share from CAP`s expenditures: 20% from the farmers receive 80% of subsidies.
• The context in which CAP was necessary in the early `60 has completely changed. In the highly interdependent world we live in, concerns about the food supply seem obsolete and are reminiscent of the era when Europe was plagued by wars and starvation.
• The CAP is no longer a pro-integration tool, but a disintegration issue. Some scholars underline that a common policy in agriculture prevented the European farmers from opposing integration. The mere idea that a social category has to be paid in order to win its support for the European project raises serious doubts about its utility as pro-integration instrument.

Given this criticism, why is CAP so resilient? Most explanations take into consideration such variables as the institutional design of an EU that favors the status-quo and the power of states with big agriculture sectors, the influence of pro-CAP establishment in the Commission and agriculture lobby and organizations in Brussels (Simon Hix calls this pro-CAP ”iron triangle”, in The Political system of the European Union, 2005).

The current discussion around CAP is one of the most important debates at the current stage of European integration. Romania should be more vocal in this debate as agriculture is one of the most important economic sectors in Romania. This sector generates 12% of the country's GDP and around 30% of Romania’s active population works in agriculture. Most of agricultural labor force is active in semi-subsistence farms, with little connection with the market. The development of agriculture is hampered by one of the worst rural infrastructures in Europe and by an extremely fragmented ownership system. Semi-subsistence farmers own small pieces of land with an average size of 1.5 hectares. Any decision on CAP reform made in Brussels will have a dramatic impact on Romania`s economic and social landscape.