Common Agricultural Policy, CAP
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 CAP has been reformed and the farmers now receive direct payments.
There are more than 5000 different EU rules governing the rather 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.
Rules are decided by a qualified majority in the Council. A dispute with France over majority-voting led to the empty chair crisis and the Luxembourg Compromise in 1965.
Until 1 December 2009 the European Parliament had no co-decision role in relation to agriculture. It could only be considered through the consultation procedure.
The Lisbon Treaty introduced the ordinary legislative procedure also for the Common Agricultural Policy so that the European Parliament will be able to propose amendments and veto proposed laws in this area. Regulation of prices will remain the competence of the Council however.
In recent years there have been significant reforms directed towards a more environmentally friendly, market and social policy sensitive CAP.
The Commission has proposed new rules on access to information about beneficiaries of CAP payments, see under Transparency and look at the first link for the latest information.