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Agenda 2000, Reform of the Common Agricultural Policy (CAP) and Cross-Compliance

The CAP has had a significant influence on European farming since the 1950's. In its early years, the main focus was to reach the goal of increasing agricultural productivity as quickly as possible. This approach soon brought results and in some sectors extensive surpluses which needed management in the form of production restrictions such as milk quotas.

The 1992 CAP reform embarked on a new approach based on two elements: lowering institutional prices for key products and off-setting the impact of these cuts on producer incomes by means of direct payments.

In 1995, the Commission presented a new long term Agricultural Strategy to Member States highlighting the need for further CAP reform. It recommended that the European Union should strengthen its efforts to enhance the economic potential and the environmental value of rural areas as well as increase their capacity to sustain employment.

In July 1997, in readiness for the new millennium, the Commission presented a blueprint for the future of European Union policy - 'Agenda 2000' - which included proposals for the reform of the CAP. The proposals were founded on the successful results of the 1992 reform but also took account of the new challenges and opportunities that face the European Union's agricultural sector and rural economies across the Community at the beginning of the new millennium. The basis of this new reform lies with problems associated with the European Union's eastward enlargement, more liberal global trading, a growing world demand for food and the need to rise to the challenge of greater consumer interest in food safety, quality, environmental protection and animal welfare.

The Commission identified several key priorities:

  • to ensure the competitiveness of the European Union agricultural sector, both on the Community market and on growing export markets;
  • to promote ways of farming that contribute to the maintenance and enhancement of rural environment and landscapes;
  • to contribute to sustaining the livelihood of farmers while promoting the economic development of the wider rural economy.

As a consequence a new policy has been introduced that aims for:

  • a competitive agricultural sector;
  • production methods which are safe, capable of supplying quality products that meet consumer demand;
  • diversity, reflecting the rich tradition of European food production;
  • the maintenance of vibrant rural communities;
  • an environmentally sustainable agricultural sector.

The new regulations, which will come into force (with the exception of milk), from the year 2000 onwards, concern the arable crops, beef, milk and wine sectors, the new rural development framework, the horizontal rules for direct support schemes and the financing of the CAP.

Cross-compliance

 

See also:

The reform also has to encompass the demands of the World Trade Organisation (WTO) which insists that subsidies which have an effect on trade or production must be phased out. However WTO do permit other types of subsidies such as environmental payments. Consequently, by 2005 AAPS (arable aid) payments will have disappeared and have been replaced with agri-environment payments.
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