Common Agricultural Policy, CAP
- (Photo: Commission)
The Common Agricultural Policy was the first common policy adopted by the EU under the Treaty of Rome starting 1 January 1958.
It was seen as compensation to France for the customs union covering industrial products, which were of special interest to Germany. The CAP is based on a common internal market for agricultural products, and it provides higher prices than those on the world market. The higher prices are kept competitive through customs duties and agricultural levies on imported agricultural products.
EU export companies receive export restitutions paid from the common EU budget when they sell agricultural products outside the EU. The level of support through restitutions has been halved over recent years, and will be abolished by 2013. Instead, farmers receive direct payments.
There are more than 5,000 different EU rules governing the exceedingly bureaucratic Common Agricultural Policy. The administration includes several working groups and management committees, with representatives from the member states, often meeting once a week to fix prices.
The Lisbon Treaty introduces the co-decision procedure for the Common Agricultural Policy so that the European Parliament will be able to propose amendments and veto proposed laws. Regulation of prices will remain the competence of the Council, however.
- In recent years there have been significant reforms directed at a more environmentally friendly, market and social policy sensitive CAP.
- In 2009 the European Commission permitted France to offer additional national help to French diary farmers.