March 16, 2010
The recent update of the European Commissions’ Scenar 2020 analysis of agricultural and rural development over the next ten years provides a stimulating background to the current debate on the future of the CAP. As of course it is intended to do. It provides a very useful analytical background to critical assessment of all the varied and various proposals for a new post 2013 agriculture, rural and food supply policy currently flooding out of NGOs and government departments.
It proposes three alternative policy scenarios: continuation of current policy with the addition of a Doha Round settlement, continuation of the present policy with less spent on direct payments to farmers and more on broad rural development, or, thirdly, complete liberalisation. In the first two choices EU budgetary expenditure would remain largely unchanged, while the third would result in savings of 75per cent,
It is however the third alternative, complete liberalisation and elimination of subsidies and market supports, which raises several interesting questions. The analysis, unsurprisingly shows that such a policy would largely eliminate agriculture in its present form from the marginal areas – mountains hills and moorlands – while concentrating more intensive production on the fertile lowland plains. The overall production level would fall, as also would farm incomes.
Drastic though such a policy might seem, would it not provide the basis for the new policy which several NGOs – outside the farm lobbies – have been seeking? Having got rid of the lavish subsidies to everyone – including most to those who need them least, as in the present system – subsidies could then be concentrated on those nebulous ‘public goods’ so beloved of the environmental lobbies. While the real farmers get on with the job of producing food at the lowest cost, hill sheep and cattle farmers and other occupiers of marginal land can be paid to operate in ways which protect and foster native flora and fauna. At the same time, the environment can be protected in intensive farming areas by subsidies for environmental services. Such an approach would be likely to produce in other words, a properly focussed agro-environmental policy.