CAP explained…why and when was it set up?

The Common Agricultural Policy (CAP) can be hard to understand at times. Over a series of articles AgriLand will explain some of the ins and outs of what is a complicated policy – that has changed numerous times in its history.

The CAP was set up in 1962 to support agricultural income. Europe was unable to meet its food demands at this time and the CAP was set up to guarantee internal prices and incomes for European farmers in order for food to be produced.

The result was the production of high quality food at reasonable prices. However, by the 1970s and 1980s the EU was producing too much of some food products.

This resulted in pressure on the budget and also caused difficulties between the EU and its trading partners. Consumers also became more concerned by the effects of intensive agriculture on the environment.

CAP Reform

This led to the first major reform of the CAP in 1992 – The MacSharry reforms – led by an Irish man, Ray MacSharry, who was the EU commissioner for Agriculture at the time.

The reform resulted in:
  • Reduced support prices for cereals and beef production – increasing competitiveness of EU food;
  • Direct payments to farmers to prevent a fall in income following the reduction of prices;
  • These payments were based on historical production;
  • Payments promoted less intensive and more environmentally friendly farming.

In 1997, the EU described the role of agriculture as being involved in: protecting the environment and traditional landscapes; safeguarding animal welfare; producing food to high quality and safety standards; as well as being an important part of rural life and the vitality of the rural communities.

The second reform

In the CAP reform of 2000 a greater emphasis was placed on food safety and the environment.  A Commissioner for Health and Consumer Protection was established and a white paper on food safety was published in January.

Pillar II

As part of the CAP reform in 2000 a second pillar of CAP was established. This aimed to improve life in rural Ireland through economic and social schemes.

Some of the schemes today include: GLAS (Green, Low Carbon, Agri-Environemt Scheme), TAMS (Targeted Agricultural Modernisation Schemes) and the BDGP (Beef Data and Genomics Programme).

No link to production

CAP reforms in 2003 broke the link between direct payments and production or to use a common phrase – payments were decoupled. More emphasis was put on the environment and animal welfare.

Compulsory schemes

In 2015, the greening payment was introduced. This is a compulsory scheme, which all countries must adhere to along with the basic payment scheme and the young farmer payment scheme.

Other optional schemes were introduced such as the re-distributive payment and the voluntary coupled support scheme. These schemes aim to distribute payments on a more targeted basis within countries.