The Common Agricultural Policy
Option 2) Change the Structural Funds rules so that fewer countries benefit from them - this is a way to play Southern
Europe off against Eastern Europe.
Option 3) Get rid of any development funds and agricultural policy, according to the logic of creating the least (European)
state possible and giving free rein to the market.
In reality the issues involved in eastwards enlargement are the same as those that we raise in general about the EMU and Maastricht criteria:
• European choices must be made openly and democratically. So we must open up pluralist debates about alternative
European choices and policies to the peoples involved, including those in the
South and East.
• We must support an approach of democratic consultation of the peoples of
Eastern Europe, which means full information for them and referendums.
• While we must make known our criticisms of the EU and the social movements that oppose the EU as it now functions, we must equally avoid vetoing any application to join. If this EU is not capable of including peoples who want to join, then we have to change the Union and the way it functions.
• We oppose both the logic of a market without borders and the logic of "Fortress
Europe". , a hard core functioning on the basis of monetarist convergence criteria.
This is just as true for the East as the
South.
• Yes to European structural funds for the reduction of real development lags, for building infrastructure, for education, research and job creation.
• Yes to a redefinition of an agricultural policy that stops encouraging a productivism that devastates the environment, human health, and the least developed regions of Europe and the
• Yes to funds that ensure balanced regional development and support the creation and diversification of rural employment.
• Yes to development aid to Eastern
Europe, which would ensure people's
"security" much more than the billions that will be spent to incorporate them into
NATO. * Note 1. The ten countries that are candidates for EU membership are the Central and Eastern European countries (CEEC) - Poland, Hungary, the Czech Republic, Slovakia, Slovenia (all counted as Central European), Romania and Bulgaria (both counted as Balkan) - and the Baltic states: Lithuania, Latvia and Estonia. As a group they have a total agricultural acreage amounting to about 44% of the existing 15 EU countries, and an agricultural work force amounting to nearly 27% of their total work force (as opposed to 5.7% in the EU today, or almost 20% in Greece). Out of the ten, the country with the highest per capita GDP is Slovenia (nearly $9000), which is barely half the EU's average per capita GDP today (though close to that of the EU's least developed regions).
The Treaty of Rome claimed to strengthen the unity of the Community by gradually harmonising the development of member states. Agricultural policy aimed to make sure the Community produced all it own food. International acceptance of this target allowed Europe's highly subsidised agriculture to be exempted from the rules of the General Agreements on Traffic and Trade (GATT). The Treaty also included aid for underdeveloped parts of the Community, especially rural areas. But the European Social Fund, introduced in 1960, had a very marginal role during the years when national economies had efficient budget policies and economic growth. Part of the "European Fund for Agricultural Orientation and Guaranty" became a new Structural Fund in 1972. Never the less, until the period of growth ended in 1973, most intervention was done using Common Agricultural Policy (CAP), introduced in 1958. The structural funds have been developed in line with the need to lessen differences which have grown for lots of reasons: the end of long-term growth in the 1970s, successive enlargement of the single market and more market
Monetary crisis in 1992-93, deep recession in 1993 and the high costs of German unification dramatically changed the blueprint for the "Union". The Maastricht "convergence" criteria do not really aim to hareconomies: they exclude countries which do not fit the monetarist criteria and actually increase inequalities between regions of Europe. Smaller budgets for both member states and the EU makes it more difficult for countries or regions to get the restructuring and public finance they need to develop infrastructure and attract private investment.
Now the rationale for the Structural Funds of the European Union (EU) cuts against the austerity budgets implied by the Maastricht criteria. For the first time ever, the European Parliament decided last October that Éuropean budget for 1997 will grow by almost nothing (0.7%). Even worse than the limited growth proposed by the Council of Ministers last July. They wanted 1 billion ECU less for the CAP, another billion ECU less for the Regional Development Fund, 550 million ECU less for other common internal and foreign policies (1 ECU = £0.69/$1.13).
The CAP was reformed in 1992. It must now deal with the austerity logic of the
Maastricht criteria and the neo-liberal pressure placed on agricultural world markets by the US during the last GATT negotiations. Conquering the world food market
The CAP was the only real common policy used to build the Economic European Community (EEC), which became the European Union (EU) after the Maastricht Treaty.
Article 39 of the Treaty of Rome defines the common agricultural policy as
• increasing agricultural productivity, by developing technological progress, and ensuring the rational development of agricultural production and an optimal use of the factors of production, particularly labour:
• Ensuring a fair standard of living for the agricultural population, particularly through raising the incomes of those who work in the agricultural sector.
• stabilising the markets.
• guaranteeing the security of food supplies.
• ensuring reasonable prices at the point of delivery to consumers.
Four main principles were established, with the aim of regulating agricultural markets:
• Free movement of agricultural goods, creating a unified single market.
• Stable prices: created by intervening in the market. "Intervention prices" harmonised prices and kept up the incomes of food producers. Public bodies bought everything farmers could not sell at, or above, the intervention price. Incentives for export were introduced, to subsidise incomes threatened by lower world market prices.
• "Community preference:" buying goods produced inside the common market in preference to imports. Taxes were used to
"protect" Europe from imports.
• Financial contributions to specific funds to implement the policy.
This interventionist policy did not respect world market prices. Nutritional self-sufficiency and independence from imports became the victim of their successes. In the 1970s the European Community became one of the dominant exporters of agricultural products. While it still stimulated exports and productivity, quotas and other measures to reduce supply were increasingly introduced.
The surplus was sold as "aid" at very low prices to the Third World, with conflicting and controversial effects. This increase of surplus and exports became very expensive. Between 1975 and 1988, expenditure from the "Guaranty Fund" grew at an average annual rate of 7.5%. After 1988 budgetary discipline limited growth of agricultural funds.
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A reform in 1992 cut the "guarantee" fund to 55% of the budget, down from 65% in 1988. Meanwhile, the share of the budget allocated to structural funds increased.
The CAP combined with similar protectionist policies in US to create a historical increase of agricultural productivity in the most developed countries of the world. The "green revolution" in some Asian countries is the only similar trend in the Third World. Fewer farmers produce more and more
Over the last forty years agricultural production has been multiplied by 7 1/2. This is one and a half times more than during the 150 years before the Second World War! Half a century ago, each French peasant could feed two and a half people: In 1960, seven people; By the early 1980s, 30, and today, 50. Between 1961 and 1992 the world population grew 75%, while total agricultural production grew 105%. Just after the Second about 30% of French workers were employed in agriculture: today the proportion is less than 5%.
The cost of subsidising European agriculture while world prices collapsed helped the US to pressure the CAP. The 1992 reform is probably the first part of a u-turn in European agriculture policy. Prices now have to move towards to the world level. This will reduce income from direct aid. As in the US, subsidies are more channelled through the budget, and financed by taxes, and less through prices paid by the consumers.
The dominant logic remains the stimulation of productivity to increase exports. Aid is still distributed unequally, with the most productive part of agriculture receiving the highest share. Production is more and more "de-localised," closer to urban and transport infrastructures. Cost-cutting has led to the "mad cow disease", worrying questions about genetic manipulation and its effect on human health. The CAP has increased, and not decreased, social gaps in agriculture.
Elements of a different orientation are being discussed in the European Commission. This new logic would change the aims of agricultural policy, stressing a environmental and territorial emphasis. It is opposed, of course, by those who oppose any public policy. From CAP to GATT
Hunger has nothing to do with insufficient production. There are still hungry people in the European Union and the United States.
While the European Union built the CAP with the aim of self-sufficiency, it can now export. The EU is in hard competition with the USA, with real similarities in the context of the crisis of the 1970s and reduced world demand. The huge US trade deficit was increased by the strong dollar between 1980 and
1985. That led the US government to launch a highly protectionist "neo-liberal" offensive during the Uruguay round of GATT talks.
Putting agriculture on the GATT agenda, while most Third World and East European
32 International Viewpoint #290 countries were out of the negotiations, was an important turning point. It marked a new feature of "globalised" capitalism. The negotiations partially concluded in Marrakesh will be reopened in 1999. In future, the World Trade Organisation (WTO) will control trade in agricultural products.
In this neo-liberal logic, subsidies and measures aiming at reducing supply disappear. The US Agricultural Trade Advisory Council (made up of 40 private firms), put pressures on Clinton for him to destroy any protectionist barriers in the so-called "Developing World". Such pressures explain the recent decision to put back into production 20 millions hectares left fallow for ecological reasons by the Conservation Reserve Prog-
The CAP faces an American offensive. The export capacities of the EU are now more and more taken as a positive fact for the satisfaction of needs elsewhere. As this is a result of increased productivity (increased efficiency) it provides a strong argument for accepting a free market in the sector.
But agriculture is a heterogeneous sector. The question is social (small-scale lands and family property as opposed to agro-industrial capitalist firms), physical (the adequate size to produce potatoes and other vegetable is not the same as for corn) and ethical: be it for cattle or for fruits, the purpose to export and increase profitability can lead to choices of production (technology, fertilisers, feeding) conflicting with environmental and human criteria for better health This logic is behind Listen to the progressive peasants