The Commission Shies away from Straightforward Conclusions Concerning the Common Agricultural Policy

The European Commission has published its first ideas for the future of the Common Agricultural Policy (CAP). In its communication on “The Future of Food and Farming”, the Commission presents an outline of a future CAP which shifts more responsibility onto the Member States and takes a clearer stand with regard to environmental objectives and the fight against climate change. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, offers his view on the matter.

“These first CAP ideas for the next Multiannual Financial Framework present an interesting model for a stronger involvement of Member States in determining CAP spending. Unfortunately, the communication fails to discuss a much more fundamental reform option, which is the gradual phasing out of farmers’ income support. The Commission admits that direct payments to farmers benefit to a great extent large farming enterprises. The Commission, however, shies away from the straightforward conclusion to cut back this income support. The document reflects the often-used strategy to develop an alibi-legitimisation for subsidies which have become anachronistic.

The EU budget has recently come under pressure as a result of Brexit and the need to devote more European resources to defence and migration. The CAP is a particularly obvious case for cuts that can be made in order to partially compensate for these spending needs. Fortunately, the Commission’s communication – at least in one sentence – still mentions the idea of a future national co-financing scheme in agricultural policy. It would be an important step in the right direction if Member States were required to participate in the financing of a highly questionable income support provided to one privileged sector.”

For further information please contact

Prof. Dr. Friedrich Heinemann, Phone +49(0)621/1235-149, E-mail friedrich.heinemann@zew.de