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The Warsaw Voice » Special Sections » April 26, 2012
Polska… tastes good!
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50 Years of the CAP
April 26, 2012   
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By Marek Sawicki, PhD, Minister of Agriculture and Rural Development
This year we celebrate the 50th anniversary of the Common Agricultural Policy. It was introduced in 1962, though work on it began five years earlier. At the foundation of the European Union’s agricultural policy was the drive to ensure the necessary amount of foodstuffs for the Community’s consumers while maintaining the proper relationship between food prices and farmer incomes. It was decided that the basic production unit in agriculture would be the family farm. The fact was also highlighted that agriculture is a special sector of the EU economy that is intended to ensure self-sufficiency in terms of agricultural produce. This is why agricultural policy required separate legal regulations.

Today I sometimes think some people forget about this. Agriculture is and will be largely dependent on weather conditions. Despite the best work and greatest efforts, farmers can never be sure of what harvest they will gather in a given year. Take last year’s harvest, which was one of the most difficult in the past several decades. This was a harvest of crops that had to be stolen from nature.

This obvious dependence thus requires regulations different from those based only on the most obvious market behaviors at the supply and demand level.

The creators of the Common Agricultural Policy understood this. They applied the principle of a common market, but also the principle of financial solidarity, meaning costs would be financed by all the member states. Today this is done through the European Agricultural Fund for Rural Development.

However, life has a way of changing needs and rules. This is also true for one of the oldest EU policies. The system’s first reform took place in the late 1960s; this was the Mansholt Plan, whose aim was to change the agrarian structure. It was not fully implemented. More changes took place starting in the mid-1980s. The Common Agricultural Policy toughened quality requirements and introduced production quotas. The real-term level of prices set began decreasing gradually as well.

Subsequent corrections began in 1992. What were known as the MacSharry reforms introduced significant changes in existing EU mechanisms, and involved abolishing subsidies for agricultural produce prices in exchange for direct subsidy payments that were not linked to the amount produced.

Compulsory “set-aside” (fallowing) was also introduced. Funding for market interventions and export subsidies was reduced. Funding was shifted to environmental protection, afforestation and early retirement. Some funds were allocated to pre-accession programs. These were the funds we took advantage of before joining the European Union. The latest major reform, the Fischler reform, took place just before our accession and soon afterward. This was when payments were separated from production and the Single Payment Scheme was introduced.

We need to remember that the Eastern Bloc countries found themselves in the unique situation of changing their entire economic systems. No one before had traveled the road from communism and a centralized economy to capitalism. Particularly intensive changes occurred in Poland in the time directly preceding EU accession. And though the terms on which we joined the EU were not advantageous, as soon as the possibility emerged to bring about fundamental changes consisting of the modernization of farms and processing plants, we took advantage of this and were hugely successful.

Suffice it to say that in the first years of the 21st century, food processing plants were modernized in an absolutely unbelievable way, especially in the dairy and meat sectors. Radical changes also had to take place at the farms that supplied those plants with raw materials. This was when modern farms specializing in dairy cow breeding were set up. The number of milk suppliers dropped by half, but the quality of milk improved dramatically. Over a few years, the amount of top-class milk delivered to dairies grew from 40 to more than 90 percent.

Such transformations in this sector had taken place in the 1970s in the countries of the EU 15, but had taken much longer. It is no wonder, then, that today Poland’s dairy and meat processing sectors are among the most advanced not only in Europe but also in the world. Confirmation of this can be found in the steadily maintained positive balance of trade in foodstuffs, hovering around 3 billion euros. These changes, however, came at the cost of hard work and many sacrifices on the part of farmers and processing business owners.

Today we face new challenges. With the extensive experience of the pre-accession period and following accession, I know that the best celebration of the CAP will be its deep and responsible reform. Having a common market, we have to take care to ensure equal conditions of competition, whereas the biggest factor hindering this are the direct payments. We have to do everything in our power to make sure they are based on the same terms for all, stemming from objective criteria and not the country of origin. Moreover, the new CAP should be as simple as possible and comprehensible to farmers and consumers alike.
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