Building Sustainable Agriculture and
Food Systems in Europe and globally –
A critical review of
the Common Agriculture Policy
and proposals for change
Alexandra Strickner, astrickner@iatp.org
Overview
• Importance of Agriculture and
challenges today
• Role of the CAP and trade liberalization
policy in today’s situation
• Food Sovereignty as an alternative
Why is agriculture an important
issue?
• Food (and water) are basis for human survival
• Social dimension:
– approx. 3 billion people live of farming – large part in
developing countries
– 850 million people are undernourished
– 30 million people each year die of hunger
• Ecological dimension: without sustainable
agriculture – basis for food production erodes
Today’s reality in agriculture
• Industrialization of agricultural production
– less family farmers, larger farms, aweful labor conditions
– Negative impact on natural resources (water, biodiversity,
soil erosion etc.) and food quality
– today 15 mio hectar of farmed land for production of soy
beans as feed for animals (= 50% of all farmed land)
• Corporate concentration along the whole food
chain
• Trade liberalization: many developing countries
today net food importers
• Price Volatility and Instability for farmers and
consumers
Ag markets as an hourglass
Farmers
Processors / retailers
consumers
Market concentration: Facts and figures
• 50% of the world’s commercial seeds sales are
controlled by 10 multinationals
• 3 leading agrochemical companies (Bayer, Syngenta,
BASF) control 50% of the market
• 75% of cereals trade is controlled by 2 companies
(Cargill and ADM) (Vorley)
• 40% of coffee trade is controlled by 4 companies
(Vorley)
• 69% of the retail market in Europe is controlled by
the 30 top retail firms
OECD – FAO Outlook for world
crop prices by 2015
Today’s challenges agriculture
• Increased demand for food
– Growing world population
– Changing diets in emerging economies
• Climate Change – impacts on resources
• Energy Security
– New demand on agriculture – agrofuels!
The role of the Common Agriculture
Policy and Trade Liberalization
• CAP than and today
• The role of trade liberalization
– EU’s External Trade Agenda
– WTO
European Common Agriculture
Policy - History
• Aims and Principles (introduced in 1957)
– Achieving Food Security
– Single market, unified price policy, communitarian
preference, parity aim
– Structural policy to reduce regional inequalities
– Common funding
• Common market organizations for grains,
sugar, dairy and beef
– These would indirectly support the prices of other products
– Intervention, tariffs, export subsidies, and sugar quotas
– Supplementary CMOs for some products
European Common Agriculture
Policy – developments
• Industrialization of farming in EU
– productivist model
– negative environmental impacts
– decrease of number of farmers
• Lack of control of production
overproduction (diary, grains, beef, sugar)
• EU strategy to get rid of overproduction
– Dumping into developing countries markets by using
export subsidies (grains, dairy, beef)
– Violaton of GATT rules (protection of farmers allowed if
production and export controls applied)
European Common Agriculture Policy
– Solution of these problems
• Farmer solution: production controls
– 1984 : milk quotas
• Agribusiness solution:
– reduction of internal price support to make dumping
cheaper
– Introduction of direct payments to compensate
farmers income loss
The direct payments game
(MacSharry reform 1992 Agenda 2000  Mid-term
review)
20,000
18,000
16,000
million Euros
14,000
Evolution of EU expenses for
arable agriculture, 1980-2002
12,000
10,000
ot
direct payments
8,000
6,000
4,000
2,000
oils
stor
export
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
The direct payments game
(MacSharry reform  Agenda 2000  Mid-term review)
EU price
Intervention price
Import tariff
Export subsidy
World price
World price
World market
Internal EU market
World market
The direct payments game
(MacSharry reform  Agenda 2000  Mid-term review)
Direct payments
Import tariff
EU price
Export subsidy
Intervention price
World price
World market
World price
Internal EU market
World market
World price
ROLE OF INTERNATIONAL
TRADE AGREEMENTS
• WTO Agreement on Agriculture
• Bilateral/Biregional Free Trade Agreements
in 2000 - 86 , 159 in 2007 (UNCTAD)
• EU: Global Europe – Competing in the World
– Economic Partnership Agreements with ACP countries
– Negotiations for FTAs started with Central America, Andean
Pact, India, ASEAN etc.
– Objectives: Global competitiveness of EU corporations
– Demands: abolishment of tariffs, quotas etc.
Trade and Development?
• More trade does not equal with development
– see expierences of most developing countries
• Peasant and Family Farming cannot
compete with highly industrialized agriculture
• Carnegie Endowment study on WTO/Doha:
all developing countries but few would be losers
• All developed nations used high protection
to build domestic markets and « competitive
comapnies
Winners and losers of this CAP
and free trade agreements?
Winners
• Agriculture & Food Industry – cheaper input prices
• Larger Farmers in EU – continuous concentration
Losers
• Family farmers in EU – diminishing in number
• Peasents and Family Farmers in the Global South
• Environment and natural resources – North and
South
• Consumers – less healthy and safe food
CONCLUSIONS
Context today:
• Agricultural model in crisis - CAP reform starting
• Free Trade Model in crisis – WTO Doha Deadlock
Challenges:
• Need and opportunity to develop alternative
proposals
• Debate on sustainable model of agriculture more than
ever important!
• Need to address market power issue