Common Agricultural Policy

The European Commission defines the CAP as follows:

Launched in 1962, the Common Agricultural Policy (CAP) is a partnership between agriculture and society, between Europe and its farmers. Its main aims are:

  • To improve agricultural productivity, so that consumers have a stable supply of affordable food.
  • To ensure that EU farmers can make a reasonable living.
Nice aspirations but how does it work in practice.

Common Agricultural Policy

In the early years the plan was to encourage farmers across the original member states to give up farming. This would make it possible to redistribute their land and increase the size of the remaining family farms, in order to make them viable and guarantee for their owners an average annual income comparable to that of all the other workers in the region.

The plan was rejected by the agricultural community.

Here we are in Ireland, fifty years later, in the same position with the concept being strongly resisted by Irish farming.

In the eighties we had the debacle of huge mountains of food, butter, meat, cheese, milk powder, wine lakes, stored all over Europe as farmers focused on producing food that they could sell to “intervention” whether the market wanted it or not.

The original concept of intervention was to smooth out the fluctuations in the market prices for farmers. This is a good thing to do as farming is by its nature a cyclical business. The idea was that in good years surpluses would be sold to intervention to maintain prices for farmers. They would then reduce production of these products in the following years and the surpluses would be released back onto the market to maintain price stability.  Of course the second strand of this never happened and farmers ramped up their overproduction of “intervention” products and were compensated to the point of the EEC almost running out of money

In the 1990’s it was decided to reduce the price supports for commodities and replace it with direct payments to farmers  including “set aside payments” i.e. paying them not to produce anything.

Effectively this is still the way farmers are compensated by The EU, in an effort to implement the second aspiration of the CAP  i.e. to ensure that EU farmers can make a reasonable living.

Using the CAP to best advantage

The question is this, should everyone who happens to call themselves a farmer be compensated using taxpayers money, regardless of how efficient/inefficient they are?

The CAP is an EU wide policy but the allocation of funds at a national level is the responsibility of the member states. (This may not be totally correct) If we are to achieve the aspiration of the CAP regarding a reasonable living for Irish farmers perhaps it’s time we defined commercial viability and only support those farms that meet this criteria.  Anything else is just glorified social welfare.

There is nothing to prevent small farms from operating as a lifestyle choice but, if we are to achieve the twin aspirations of the CAP, basic viability must be a first criterion for support.

The conclusions

It would appear that the CAP is just regarded by farmers as personal income and not for use in smoothing out the vagaries of their business.

It is perhaps unfair to criticise individual farmers, or the Irish farming community in general for this, as human nature being what it is, people will use the system to their best advantage.

We should evaluate the use of our very fertile farmland using long term sustainability criteria that includes best business practices.  Encourage  farmers to be innovative and apply best business practice to their enterprises.  After all, once you grow a cow, the rest is just a business. (City Boy attitude to where meat comes from)

With the Trickledown effect, farming output, feeding into food processing and distribution, would allow our farming industry to become a leader in indigenous business development.

Extracted from the longer original “City Boy on farming 3”



No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Tuesday, 23 July 2019
If you'd like to register, please fill in the username, password and name fields.

Member Login

Business Insights & Tips


Jill Holtz
1899 Points
Tena Glaser
1387 Points
Michael Lane
802 Points
Ron Immink
732 Points
Fionan Murray
719 Points
View Leaderboard