Why has the so-called common agricultural policy been a controversial issue for the European Union?
- AleconomixtLv 77 years agoFavorite Answer
The Common Agricultural Policy (CAP) is a system of European Union agricultural subsidies and programs. It represented 46.7% of the EU's budget, €49.8 billion in 2006.The CAP combines a direct subsidy payment for crops and land which may be cultivated with price support mechanisms, including guaranteed minimum prices, import tariffs and quotas on certain goods from outside the EU.
Criticism of the CAP has united some supporters of neoliberal globalisation with the alter-globalisation movement in that it is argued that these subsidies, like those of the USA and other Western states, add to the problem of what is sometimes called Fortress Europe; the West spends high amounts on agricultural subsidies every year, which amounts to unfair competition.
To perpetuate the viability of European agriculture in its current state, the CAP-mandated demand for certain farm products is set at a high level compared with demand in the free market (see CAP as a form of State intervention). This leads to the European Union purchasing millions of tonnes of surplus output every year at the stated guaranteed market price, and storing this produce in large quantities (leading to what critics have called 'butter mountains' and 'milk lakes'), before selling the produce wholesale to developing nations
CAP price intervention has been criticized for creating artificially high food prices throughout the EU.. High import tariffs (estimated at 18–28%) have the effect of keeping prices high by restricting competition by non-EU producers.
Public health professionals have also leveled criticism at the CAP and its support regimes, arguing that agricultural policy often disregards health. It is evident that supply outputs are generating widespread public health issues
Although most policy makers in Europe agree that they want to promote "family farms" and smaller scale production, the CAP in fact rewards larger producers. Because the CAP has traditionally rewarded farmers who produce more, larger farms have benefited much more from subsidies than smaller farms.
Some countries in the EU have larger agricultural sectors than others, notably France and Spain, and consequently receive more money under the CAP. Countries such as the Netherlands and the United Kingdom have particularly urbanised populations and rely very little on agriculture as part of their economy
Critics argue that too few Europeans benefit. Only 5.4% of EU's population works on farms, and the farming sector is responsible for 1.6% of the GDP of the EU(2005).