EU agricultural policy has long been heavily criticized, but a series of reforms have changed much. Today, overproduction is gone and farmers are being compensated for environmental and climate work.
Within the EU, around 22 million people work in agriculture – but not full-time but the figure can be converted to 10 million full-time jobs. Together with the food industry, the agricultural sector accounts for 3.6% of the EU countries’ total gross domestic product (GDP).
When European co – operation began a few years after the Second World War, the starting point for agricultural policy was naturally enough to ensure that there was food for the citizens and to ensure the standard of living of the rural population.
Those goals are not gone, saving small-scale is, for example, one of the more important goals. Europe, with its many family farms, has farms averaging 15 acres, compared to the United States’ far fewer farmers (2 million) with 180 acres. But EU agricultural policy in the 21st century has become more about ensuring that EU citizens have access to non-toxic, healthy food, protecting the environment and preserving the landscape. In addition, there has been the demand to counteract climate change.
During protests from farmers, the EU gradually introduced elements of the market economy into agricultural policy, which put an end to the overproduction of the 1970’s and 80’s. Since 2005, the EU no longer pays production aid. Instead, EU subsidies go to the farms in the form of income support. It gives the farmer the freedom to choose what he or she wants to produce and easier to invest in what the market demands.
New technology gave Europe more efficient agriculture but also more economies of scale. EU agricultural subsidies probably reinforced this development. Technology-intensive large-scale agriculture seems to be behind a series of food scandals that were revealed in the 1990’s and 2000’s.
In 1996, mad cow disease broke out in Britain. It caused human tragedy and economic catastrophe before reaching France, Belgium and Germany. In 1999, it was revealed that dioxin had been mixed into animal feed in Belgium and that the feed had since been exported. A British outbreak of foot-and-mouth disease in 2001 cost the country the equivalent of SEK 40 billion. In 2013, it became clear that inadequate food controls meant that horsemeat could replace beef fillet in foods sold throughout Europe.
The EU has responded with stricter rules, including on the tracking and labeling of agricultural products. Since 2013, farm support has been paid only to the farmer who meets the EU’s requirements for a clean environment, open landscapes, good animal husbandry and a high level of hygiene. At the same time, the EU set a ceiling for the maximum maximum support for an individual recipient.
Agricultural subsidies are no longer the EU’s largest area of expenditure (it is now regional policy) but still about 30% of the EU budget goes to the agricultural sector plus a further 10% to climate action, rural development, the environment and crisis support.
Agriculture has also been a sector where there has been a lot of cheating (up to 12% of contributions in the early 2000’s according to the EU Court of Auditors). In order to limit cheating, the member state that has paid too much to a farmer is now fined. This has given the national authorities reason to be extra careful with payments and the previous loss of agricultural support has decreased significantly. In 2017, EU auditors found incorrect payments in only 2.4 percent.
Another heavily criticized part of the EU’s agricultural policy has been that the protection of European farmers has made it impossible for poor countries to build a viable agriculture that can compete on the world market. However, the EU has lifted its protective tariffs on the world’s poor countries and abolished export subsidies to EU farmers.
But the EU still protects its farmers with various forms of market support and the EU countries can compensate their farmers in a crisis, such as the drought in Sweden in the summer of 2018. There, developing countries are still lagging behind.
Fishing
According to phonecations, the EU jointly manages Member States’ fishing waters. The Union allocates quotas to each country’s fishing fleet and agrees jointly on which fishing gear is permitted. The European Commission is negotiating agreements with neighboring countries on the exchange of fishing rights.
The goal is sustainable fishing, to support coastal regions that depend on fishing and to offer healthy fishing products to the population.
The biggest problem with fishing is that several fish species are about to be fished out. A first attempt to remedy this was a reform that sought to replace fishermen who scrapped older fishing boats. The reform modernized the fishing fleet, but as newer boats proved to be able to catch even larger catches of fewer commercial fishermen, the problem of overfishing remained.
Since 2003, the EU has been working on multi-year fisheries plans. Support for new fishing boats has been removed and control of poaching has been tightened. Fishing quotas for particularly endangered species have been tightened through multi-year recovery plans based on scientific expertise. Among other things, cod fishing in the Baltic Sea has been significantly restricted.
A recurring problem has long been that EU fisheries ministers have allowed high quotas to please their fishermen instead of following scientific advice on what was sustainable fishing. A fisheries reform in 2013 therefore introduced sustainability as a principle for European fisheries. Between 2015 and 2020, only quotas will be allowed that allow fish stocks to survive in the long term. Nevertheless, critics say, unsustainably high fishing quotas are still being set.
Regional policy
Regional policy is entirely European and is pursued with the aim of bridging gaps both within countries and between member states by increasing growth. The measures implemented for this purpose are financed by so-called Structural Funds, which are the EU’s largest item of expenditure (approximately 34% of the budget).
The EU’s regional policy contribution is called structural support for one reason; the contributions must be help for self-help. Therefore, structural programs are always based on plans for long-term development. The plans must be drawn up by the region concerned itself and then approved by the European Commission.
Since 2010, the term “grants” has increasingly been replaced by the term “investment”, which marks a change in course where growth-creating initiatives have come more into focus and where grants can just as often consist of soft loans.
A result of that thinking led in 2014 to the establishment of an EU Fund for Strategic Investments (EFSI, also known as the Juncker Plan). The intention was to “invest” Europe out of the recession that followed the global financial crisis of 2008–2012.
The fund received a low share capital of around 16 billion euros, intended to act as a starting shot to attract with the parties and start profitable investment projects. In 2018, the European Commission estimated that private and public capital investments had multiplied the initial capital several times over and reached the sum of EUR 335 billion, which was used for almost 900 different growth projects in the EU countries.
EU governments decided to continue and invest in the target of EUR 500 billion by 2020.
The EU’s regular structural funds start with significantly more in cash – a total of EUR 351.8 billion for the years 2014–2020. They are channeled through three main funds: the Cohesion Fund, which goes to the EU’s poorest countries in Eastern Europe, Greece and Portugal, the European Regional Development Fund (ERDF) and the European Social Fund (ESF).
The money will go to sustainable growth, everything that can create work, is climate-smart and increases prosperity. It can be about raising the level of education, helping weaker groups into the labor market, renovating run-down districts, introducing IT in small businesses or finding alternative employment when agriculture or fishing is closed down.
EU programs must always be co-financed. The EU usually contributes 50 percent, while the other part must come from a national party, mainly the state or municipalities, business or organizations, while local associations can contribute with volunteer work. What this looks like in Sweden is stated in an agreement, called the Partnership Agreement , which the government has reached with the European Commission.
Sweden can withdraw approximately SEK 15 billion from the EU’s regional fund and social fund during the years 2014–2020. Together with Swedish initiatives, the regional grants then land at around SEK 29 billion for the seven-year period. If the EU’s and Swedish agricultural, rural and fisheries investments are included, the total is SEK 67 billion.
In Sweden, regional authorities, the Swedish Agency for Economic and Regional Growth and the Swedish Board of Agriculture distribute the aid.
A member state can also apply for funding from the Globalization Fund, which provides support for the further training of workers who have lost their jobs due to globalization. The EU also has a Solidarity Fund for natural disasters, which was established after major floods in Europe in 2002. After storm Gudrun in January 2005, Sweden received assistance with SEK 700 million from that fund.
