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The Common Agricultural Policy: Development and Prospect

The goals of the CAP
Development and operation of the CAP
Institution of the CAP
The CAP fully operational
The CAP's negative structural repercussions and the first reforms
The challenge of enlargement - Agenda 2000
Common Fisheries Policy
Goals
Policy instruments

The origins of the Common Agricultural Policy (CAP) arose out of initial discussions by the founding members of the European Economic Community (EEC) back when the French-German accord was being formulated. It was prompted by the need to secure stable supplies of food as quickly as possible at a time of insufficiency (right after the tragic experience of World War II) but also by a desire to transform life in the countryside and improve the living standards of the farming population.

A decisive factor in adopting a Common Policy for Agriculture was from the outset the inclusion of farm products in the general principles of the Common Market, but also the adoption of special rules of competition for farming. The general principles dictated the adoption of a system which would secure the free movement of farm products in the internal market and the implementation of a Common Customs Tariff system in the trade of farm products with third countries.

The special rules on competition arose from the need to adopt common measures necessary to provide effective support for farming incomes. This combination of general principles and special measures constituted the basis of the CAP, which was to play a decisive part in forming and developing the entire Community and its institutions.

Indeed, based on the three founding principles (single internal market, Community preference, financial solidarity):

a) The CAP has become and continues to be the most complete, truly Common Policy in the EU. Although primarily a market policy for farm products, its rules govern the entire farming sector not only with regard to the operation of agricultural markets (from the production of primary resources, to processing, manufacturing, distribution and sale of the final product to the consumer) but also farming structures.

b) The CAP is still considered the most important sectoral policy in the Community from the institutional, regulatory and above all fiscal viewpoint. Over 50 percent of the Community acquis relates to CAP legislation, while its implementation continues to absorb the greatest part of resources in the Community budget, albeit at a declining rate (from 80 percent in the early 1970s, to 70 percent in 1980 and 45 percent in 2000).

c) The adoption and development of the CAP has been and continues to be the most powerful foundation of European integration. That is because important milestones in the integration process have been linked either directly or indirectly, but always firmly, with the incorporation of the CAP, since its operation presupposes the transfer to Community bodies of crucial powers and functions which had traditionally been held by national governments in connection with an entire production sector.

That is, from the moment a State joins the EU, it can no longer make decisions and exercise a national farming policy entirely on its own. Its role is restricted to that of joint decision-maker along with its partners regarding most measures and policies implemented in the farming sector.

In practice, nearly all national measures and policies are abolished and replaced by the Community system. In other words, state policy in Agriculture comes almost exclusively under Community authority.

Even after the Maastricht Treaty, where it was agreed that most decisions would be reached by a 'special majority' and based on the principle of 'subsidiarity' (according to which Community actions should complement and not replace the action of national governments), the CAP has for all practical purposes remained intact. In the farming sector, despite persistent pressure from certain parties, the principle of subsidiarity is rarely applied.

In addition, it should be emphasised that the CAP, as an integral part of the internal market, is directly or indirectly linked with nearly all the EU's sectoral policies, particularly those that are becoming more of a priority amongst the EU's broader goals (economic and social convergence, structural and regional policy, the environment, international trade, protection of health and the quality of life, consumer protection, social policy, etc.)

The goals of the CAP

The legal basis of the CAP is set out in articles 32-38 of the Treaty (former articles 38-47 of the Treaty of Rome in 1957), in which the goals and basic guidelines of the CAP are determined. In particular, the CAP's five initial goals are set out in article 33 (article 29 of the Treaty of Rome):

  1. Increase in agricultural productivity by promoting technical progress and securing rational development of farming production and the best possible use of production coefficients, particularly labour.
  2. Securing a reasonable standard of living for the farming community, particularly by increasing the incomes of those working in the farming sector.
  3. Stabilising (agricultural) markets.
  4. Guaranteeing the availability of supplies of goods
  5. Compatibility of these goals with reasonable consumer prices.

The same article states that in implementing the CAP, consideration should be given to:

  • Social factors in agriculture (structural and physical inequalities between various regions)
  • The need for appropriate adjustments
  • The fact that farming is a sector closely linked with the European economy as a whole.

Although now, more than 40 years after the CAP was introduced, it is considered that most of the above goals have been achieved, they have not been replaced or even amended in successive reviews of the original Treaty. They continue to form a substantial and integral part of the Treaties and as such remain legally binding.

An indirect but important (from the legal viewpoint) extension of the initial goals could be considered to have been made after the Maastricht Treaty (1992) when it was decided that all sectoral policies (including the CAP) should henceforth be taken into serious consideration and above all serve the goals of convergence policies, protection of the environment and public health. These goals were further elaborated by dividing European policies into pillars and including the CAP in the first pillar of Community policies.

Meanwhile, the Amsterdam Treaty (1997) added the following three goals:

  • To article 6: the demands of environmental protection should be incorporated to Community policies and actions, particularly regarding the promotion of sustainable development.
  • To article 152: both the determination and implementation of all Community policies and actions (therefore of CAP as well) should secure a high level of protection of human health.
  • To article 159 (formerly article 130a): the formulation and implementation of Community policies and actions and the implementation of the internal market should take into consideration the goals of Cohesion.

Furthermore, article 158 determines that economic and social cohesion is aimed at reducing inequalities between levels of development of various regions and the backwardness of less advantaged regions, including farming regions. According to this article therefore, social parameters of agriculture in article 33 (formerly article 39) should be considered to be more specific regarding content and broader with respect to their scope of implementation.

Finally, with regard to the CAP's goals, reference should also be made to Agenda 2000, the decisions of which on the one hand constitute the direction the EU will take at least until 2006, and on the other, without questioning the goals of the CAP as they have been formulated to date, determine additional dimensions and new hierarchies in the CAP's development. With these decisions, the CAP is enriched with new elements, as it is expanded into a strategy for regional development, establishing a hierarchy for its policy goals as follows:

  • Focusing the CAP on a policy of food safety and quality
  • Guaranteeing a respectable living standard for farmers
  • Incorporating environmental goals into the CAP
  • Creating alternative sources of income and employment in farming areas, by strengthening the political development of the countryside as a second 'pillar' of the CAP
  • Simplifying the Community's legislative framework

Development and operation of the CAP

The development of the CAP can be divided into the following five main phases:

Institution of the CAP (1957-1967)

The details and principles of the CAP began to take shape in the 1960s. In 1961 the Agriculture Ministers of the founding member states decided on the basic list of products to be covered by the CAP. This list was expanded in 1963-64 (Appendix I of the Rome Treaty). For practical and commercial reasons, however, nearly all food and other related products, even if not governed by the rules of articles 32-38, were covered to some extent by the rules of the Community's farming trade. These goods are commonly referred to as products outside Appendix Ι.

The initial harmonisation of previous national policies on farming was achieved with the adoption (based on article 34) of a Common Organisation of the Market (COM) for each of the products or sectors covered. Each COM included the totality of measures required to achieve the goals; in particular, price regulations, support for production, trade, storage and other requirements, as well as a common mechanism for stabilising imports and exports, while each policy on common prices should be based on common criteria and similar methods of calculation.

In accordance with the same article 34 (40 in the Treaty of Rome), in 1962 the farming fund (FEOGA) was founded with its two departments, Guarantees and Guidance, for Community financing of the CAP according to the principle of funding solidarity, one of the three founding principles of the CAP. The Guarantees section (which has absorbed over 90 percent of FEOGA credits) funded (at least until 1992) 100 percent of the cost of operating and supporting markets. The Guidance section funds only part (50-75 percent) of the expenditure for implementing structural (non-compulsory) programmes in the CAP, while the rest is covered by the national budget.

Grains were the first group of products to come under the COM rules in 1952. However, the attempt to decide on common grain prices failed at first (1964-65), because of disagreements over the suggested common prices, chiefly on the part of Germany, which did not accept prices lower than its own. Finally, common prices for grains were agreed in 1967 (and implemented in financial year 1967-68), at a much lower level than average national prices.

Meanwhile, the COM system for grains was followed, more or less, by most of the products on the first list. In 1966, common prices for milk and dairy products were agreed, as well as for beef, sugar, rice, olive oil and oilseeds.

1968 is considered the first year in which the CAP was fully implemented, a year in which most of the national support measures were withdrawn and gradually replaced by the Community system.

It should be noted that while the Treaty speaks of common prices, and various possible means of support, it implies - without expressly stating - which system of support for Community farming (and for which products) should be adopted. In actual fact, it was the Farm Council that decided (at the historic summit in Stresa, Italy, in 1958) to adopt support for market prices as the main policy instrument. An exception was initially made for oilseeds, regarding which the so-called system of 'deficiency payments' was adopted, for serious reasons connected with relations between the Community and the US.

The CAP fully operational (1968 - 1979)

As it became fully operational, the system of price supports secured common guaranteed prices for the main products by means of:

  • The mechanism of Community intervention, on the basis of which the products could be stored, with the Community's responsibility in unlimited quantities, ensuring a minimum price for the producer when market prices dropped below the guaranteed level.
  • (variable) compensatory levies (equal to the difference from stable threshold prices and the variable international prices) levied at the borders for the Community Fund during the import of similar products.
  • support for exports (equal to the difference between the average international price and the average price on the domestic market) granted to exporters of farm products, according to the type of product and its destination, so that products of Community origin could be competitive on the international markets.

It is clear that common prices as they were agreed from the outset and continually increased with annual decisions by the Farm Council, soon were set much higher than international prices, and for some products were even four times greater than international prices.

Therefore the entire system allowed the Community to shift rapidly from a complete deficit to a surplus in the production of basic farm products, thereby achieving, within the space of a decade, most of the CAP's goals.

The CAP's negative structural repercussions and the first reforms (1980 - 1989)

At the beginning of the 1980s, in fact towards the end of Greece's accession negotiations, the CAP's two biggest problems began to make themselves all too apparent and since then they have been the main reason for the restrictions that followed, having a direct influence on the further development and implementation of the regime. The two problems are:

  • Unacceptable surpluses that could not be distributed either on the internal or the international market, even with price subsidies.
  • The absorption of increasingly higher fiscal resources from the Community budget to serve the system.

It began to become clear at the time that the system itself encouraged over-production. In addition, because budget resources were fixed, the high expenditure for the CAP prevented the development and funding of other common policies. Above all, it was observed that the horizontal implementation of the price support mechanism resulted in an underestimation of the role of structural weaknesses in determining income and the rapid deterioration of inter-sectoral income inequalities between various Community regions.

In other words, well-organised farms absorbed the largest percentage of available resources, while price supports, although very high, were not in a position to effectively cover farm incomes in disadvantaged areas with structural weaknesses.

So in 1979, various restrictions began to be introduced and gradual reform of the CAP began. Initially, the reforms included:

  • The end of farmers' co-responsibility (grains, dairy), which required them to assume a share of the cost of storing surpluses.
  • Production quotas according to product or member state (the notorious dairy quotas that are still in force today were adopted in 1984)
  • Restrictions on intervention
  • Restrictions on planting of new crops, etc.

In 1984, it was decided to increase resources from the Community budget (from 1 percent to 1.4 percent of VAT resources), which however was insufficient to cover the continually rising farm costs.

Meanwhile, since 1977 particular emphasis had begun to be given to the CAP's structural aspect. Previous directives on promoting investments in the cultivation, trade and manufacturing of farm goods and the encouragement of producer organisations, became regulations, while in 1985, efforts were focused on improving the performance of farm holdings.

It was in this framework that the Integrated Mediterranean Programmes were adopted, after tough negotiations on the part of Greece.

In 1988, after the Single European Act began to be implemented, one drastic reform was the so-called first Delors package, the main provisions of which were the following:

  • The introduction of a generalised system of fiscal stabilisers, that is fiscal guarantee thresholds for all main products
  • The mechanism of the maximum guaranteed quantity for every COM, in order to contain production within limits (thresholds/quotas)
  • The strict implementation of 'fiscal discipline', on the basis of which, as a 'farm guideline' it was decided that the annual increase in farming expenditures could not be higher than 74 percent of the increase in the Community GDP.
  • The implementation of the 'early warning system' for a close (monthly) monitoring of farming expenses and immediate measures to be taken in the case of fiscal instructions being overreached.
  • Unified action by the three Structural Funds (FEOGA's Guidance department, the Social Fund and the Regional Development Fund), with a doubling of their available resources in order to serve regions in CAP objectives which had already been set. These objectives distinguished between areas on the basis of the main problem they faced. On this basis, the objectives relating to the farm sector were:
  • Objective 1, for developing and structurally adapting disadvantaged areas (with actions funded by the three funds).
  • Objective 5, for developing the farm sector, subdivided into:
    • Objective 5 a, for adapting production structures, manufacturing, trade (funding from FEOGA's guidance department).
    • Objective 5 b for developing regions in which farming is the main activity (funding from the Guidance Section and the European Central Bank)
  • Objective 6 (added later, after the last enlargement) on thinly populated areas in Sweden and Finland.

3.4. The 1992 review and the inclusion of Farming in the regulations of the WTO (1990 - 1996)

Successive reviews of the CAP during the 1980s did not call its basic mechanism into question, that is the system of supporting market prices. They were more in the nature of alternative policies for adapting the CAP to existing economic conditions. Nevertheless, the two main problems (surpluses, high cost) continued to grow.

In 1988, expenditures on Guarantees continued to absorb about 65 percent of the Community budget, while at the same time, reports of milk lakes or wine lakes and butter or meat mountains kept appearing in the media and upset European citizens.

So attacks on the CAP mechanisms intensified, both within the Community as well as around the world. In fact, in combination with domestic problems, the complex trade negotiations of the Uruguay Round within the framework of GATT (later the World Trade Organization - WTO), prompted a radical review of the CAP in the early 1990s.

The 1992 review naturally did not call into question the CAP's targets which were included in the Treaty. However, a decisive step was taken to orient the farm sector towards market forces, by gradually changing the CAP's basic mechanism from a price support system to a system of direct support for farming income.

The key to this was the first ever gradual reduction (drastic or conservative) of institutional prices and direct support for the key sectors of arable crops and beef (per cultivated hectare of livestock animal) to recompense/offset producers' income losses due to price reductions. At the same time, three important accompanying measures were adopted (or supplemented):

  • An agro-environmental package of measures aimed at the extensification of production and the protection of natural resources.
  • A programme of reforestation of cultivated land, with compensation for loss of income for up to 20 years.
  • A more effective early retirement programme for farmers over 55 years of age, as an incentive for improving productivity and at the same time increasing the average size of small and non-profitable farms.

Among other things, the final decisions at Community level allowed the chief negotiators at GATT to conclude an agreement at the end of 1993, incorporating farm products into the main regulations for international trade, with specific commitments for a gradual reduction (for the six years the Agreement was in force 1995-200) at three levels - internal support, protection at borders, support for exports. As a result, irrespective of future developments in international agricultural markets, the commitments undertaken toward the WTO entail radical changes in the ways and means of planning, as well as in the implementation of farm policies henceforth at an international level (and therefore also in respect of the CAP).

Meanwhile, although the implementation of the 1992 review, completed in 1995, was generally successful with regard to its initial goals, the 1990s was marked by other developments that gave rise to wider scepticism regarding the future development of the CAP. Specifically, various factors, both internal and external, set in motion a process of continual review for the CAP. The main factors can be summarised as follows:

  • The continuous reduction in the number of people working exclusively on the land, but also the social, economic, political and cultural importance of keeping the farm population in the countryside, intensified pressure to promote alternative sources of income and employment in the rural areas, by further strengthening the policy of developing the countryside rather than agricultural development.
  • Increasing pressure for a form of agriculture that is more environmentally friendly, the institutional obligation to promote sustainable development as well as the need to improve the hygiene, safety and quality of food, are all factors giving rise to the need for fundamental changes to the current models of production and consumption of farm products.
  • The multiparty farm negotiations in the framework of the WTO that began after the Uruguay Round agreement expired and which have been taking place since October 2001 as the new Doha Round, are expected to lead to additional commitments at the three above-mentioned levels in the direction of further deregulating the trade in farm products, which will make it very difficult to continue with support for exports and other measures at the borders.
  • The perspective of enlargement with the accession of the 10 candidate countries in 2004, in most of which the role of the farm sector is extremely important, makes a further review of the CAP imperative, so that the new members can be smoothly integrated within existing frameworks for public finances.

The challenge of enlargement - Agenda 2000 (1997-2006)

The ambitious package of proposals that came to be known as Agenda 2000 was the Commission's answer to instructions from the European Council (Madrid, December 1995) to prepare in good time for the implementation of the political commitment concerning the enlargement of the EU with the accession of the countries of central and eastern Europe (CEE) and Cyprus. Indeed, beyond the general strategy for enlargement, the package contained a set of proposals relating not only to the next funding framework of the EU for the period 2000-2006 but also the necessary adjustments to existing Community policies (mainly CAP and Cohesion policy through structural funds) so that enlargement would not cause upheavals.

With regard to the CAP and for the purpose of confronting all the relevant challenges and uncertainties, the last review was decided in the framework of Agenda 2000 after the Interinstitutional Agreement of the Berlin European Council in March 1999. The basic approach of the proposed changes was the continuation of the course set in motion with the reform of 1992, that is, the further reduction of institutional prices (in the direction of eliminating the gap between these prices and international prices) and offsetting the reductions by strengthening or expanding direct payments.

But apart from the adjustments decided in each specific COM of basic products, a number of other key issues were covered in the final agreement, such as:

- The rural development strategy as the second pillar of CAP, with the integration of all the previous structural, as well as new, measures in a single institutional framework, now jointly financed through the Guarantees Fund (apart from the regions of Objective 1 which include the whole of Greece),
- the promotion of a 'horizontal' regulatory framework with (mostly optional) arrangements governing all direct supports henceforth.

However, one of the most important aspects of the final decisions was the determination of the fiscal ceilings for spending in the farm sector, within the overall fiscal framework up to 2006. Thus, the review of the CAP and the relevant adjustment of the COM were defined by the goal of ensuring adherence to fiscal ceilings. Consequently, the key element in the review is intertwined with the fiscal prospects of the EU, which also entail the stabilisation of agricultural expenses. In fact the agreement provided for an interim review in 2002-2003 of the decisions reached in Berlin, in order to ensure that stabilisation would not be threatened in view of the forthcoming enlargement.

After close monitoring of the implementation of the decisions reached in Berlin, as well as of developments in the farm sector both domestically and globally, the Commission in July 2002 presented the main guidelines for the interim review of the CAP, which sparked public debate on this issue. Indeed, during the Danish presidency, the Farm Council repeatedly discussed the Commission's general guidelines, preparing the ground for final decisions. At the same time, the European Council which recently convened in Brussels (26-27/10/2002) reached final decisions on the final timetable for enlargement, paving the way for full accession of the 10 new Member States in 2004.

At this stage, the Commission, as a sensitive receiver of the views expressed at all levels, is expected to submit to the Council its specific regulatory proposals for the interim review of the CAP in December 2002.

Thus, the assumption of the EU presidency by Greece coincides with the important task of concluding the relevant discussions and consultations among the governments of the 15 Member States on this highly significant issue, in order to make it possible for final decisions to be reached by the Farm Council, under the chairmanship of Greek Agriculture Minister George Drys.

As a result, the interim review of the CAP will undoubtedly be the top priority of the Ministry of Agriculture during the Greek presidency in the first half of 2003.

On the basis of the commitments of Agenda 2000 and taking into account the ongoing consultations at WTO level, the main proposals included in the Commission's guidelines concern, on one hand, the horizontal measures governing the regime to date of aid per hectare and/or per animal, and on the other, certain adjustments to the regulations concerning the common organisation of the market (COM) for agricultural goods.

With respect to the horizontal measures of Regulation (EC) No. 1259/99, the boldest
Proposals concern the following:

* Decoupling of aids from production and their replacement by a single (lump sum) income support per farm, up to a ceiling of 300,000 euros (capping), based on historical references. It is proposed that the arrangement includes aids for arable crops, dried fodder, pulses, starch potatoes, beef, sheep and goat meat. Additionally, in order to facilitate transfers, it is proposed that the total amount per holding be divided into shares (payment rights).

* Modulation: It is proposed that single income supports are scaled back (degressed) up to 20 percent, except for small producers who receive up to 5,000 euros per holding. The savings accruing from this reduction are proposed to be distributed to Member States on the basis of specific criteria (agricultural area, level of farm employment, economic prosperity) and be necessarily channelled into the Second Pillar, in order to mainly support agro-environmental measures and food safety, as well as the further promotion of quality standards, organic farming, animal welfare, etc.

* Cross-compliance: Full payment of lump-sum supports will presuppose the observance of specific criteria and regulatory standards concerning environmental protection, food safety, animal welfare and/or farm employment. Non-observance of such criteria will imply a reduction in supports on a proportional basis.

* Mandatory farm auditing for the correct implementation of the above arrangements on the basis of a single framework.

Regarding the adjustments to the COM for specific products, the following measures are proposed:

Cereals: Further reduction (-5%) in intervention prices for 2004-5 and partial offsetting (50%) of income losses by a proportionate increase in supports per hectare.

Rye: Abolition of the intervention mechanism.

Durum wheat: Reduction in the supplementary payment to the product in traditional growing areas to € 250 euro per hectare within three years and the abolition of such payments in non-traditional areas. Introduction of a new quality premium of € 15 per tonne.

Rice: Reduction of the intervention price by 50 percent and partial compensation of losses through the introduction of aids per hectare similar to those applicable to other arable crops.

Dried fodder: It is proposed that the existing support regime be abolished and replaced by an income support system of up to € 160 million euro, which will be distributed to producers on the basis of national quotas.

Nuts: It is proposed that existing aids be replaced by a flat rate payment of € 100 euro per hectare, with a maximum guaranteed area of 800,000 hectares.

Oilseeds: No change is proposed to the existing regime.

Beef: After the gradual normalisation of the market, the only proposed change is for the conversion of the subsidy per animal to special support and its incorporation into the flat rate income support.

Dairy products: For the time being, no additional measure is proposed other than the decisions reached in Berlin. However, four alternative scenarios are being put forward for consideration, concerning the continuation or not of the quota system in the period 2008-2015.

Common Fisheries Policy

Fishing resources are common to Member States and shared between the European Union and other countries in common and international waters. Fishing is a very important sector, absorbing € 1.1 billion of public funds (Community and national) annually. The common organisation of the market and common trade policy provide price supports and tariff protection for the Community producer.

The first common measures in the fisheries sector were taken in 1970, when rules were introduced for access to fishing areas, markets and infrastructure. Nevertheless, the Common Fisheries Policy (CFP), aiming at effective management of fisheries within the framework of the Community, was established in 1983.

The CFP is based on articles 32 and 38 of the European Community Treaty. The same general goals, as set out in the Common Agricultural Policy in article 33 of the Treaty, are also applied to the CFP. Common rules for fisheries were adopted based on articles 33 and 37 of the Treaty for the purpose of managing fishing stocks.

In addition, the goal of incorporating environmental requirements into the Community policies of article 6 of the Treaty and the implementation of the principles of conservation and preventive action in the sector of the environment in accordance with article 174 of the Treaty are also directly connected with the CFP.

The first review of the CFP in 1992 indicated that in the event of fleet overcapacity, technical prevention measures and monitoring were insufficient for predicting overfishing. As a result, it was considered necessary to regulate the permissible fishing limits. These measures were aimed at ensuring compliance with rules governing the entire industry. New technologies were introduced for sending data to state authorities and for monitoring large vessels by satellite.

Goals

The European Union's general goal is to promote a rational, responsible and viable exploitation of live aquatic resources and aquaculture, by means of economic and social conditions appropriate for the fisheries sector.

The CFP is in line with the general goals set out in the United Nations Food and Agriculture Organisation code of conduct for responsible fishing. The same general goals, as set out for the CAP, are also applicable to the CFP:

- increasing productivity by promoting technological development, the rational organisation of production and the best possible implementation of the factors of production, particularly with regard to the workforce.
- securing a good living standard for the fishing community, particularly by raising individual incomes
- stabilising the market
- securing suitable supplies
- securing reasonable consumer prices for fishing products
- safeguarding the principle of exclusion of any form of discrimination.

Fisheries policy should also take into consideration the need to protect the consumer (article 153) and bring about economic and social cohesion (article 159). Regarding the EU's fishing agreements with developing countries, the CFP should also aim to meet the goals of cooperation in development policy (articles 177 and 178).

Article 2 of Council Regulation 3760/92 states that the main goals of the CFP are on the one hand to protect and safeguard available and accessible aquatic resources, and on the other, to rationally and responsibly manage stocks on a sustainable basis, taking into consideration the needs of both producers and consumers and the effects on the marine ecosystem.

Incorporating the demands of environmental protection into the CFP, in accordance with article 174 of the Treaty, is part of the EU's environmental strategy for promoting sustainable development.

Policy instruments

On the basis of independent scientific reports regarding available biological, socio-economic and technical analyses of fishing activities, the EU Council institutes Community measures that determine the conditions for access to waters and resources. With regard to the CFP (particularly the thematic areas of structural measures, organisation of the market and conservation of resources) the Community has produced a considerable volume of legislation through the adoption of Regulations.

According to (EC) Council Regulation 3760/92 and in view of the CFP reform in 2002, on March 20, 2001 the Commission adopted a Green Paper for the purpose of initiating a broad debate on the future of the CFP among all parties concerned.

The document emphasised the need to reduce fishing, the problem of overfishing of many of the most valuable fish stocks, whilst expressing concern about the future of the profession and the survival of the fishing community.

It proposes a number of goals concerning arrangements which range from fishing fleet policy to environment-related issues, aimed at achieving a balance between free field of action in fishing and the quantity of fish that can be harvested without endangering fish stocks and the ecosystem.

The list of proposals for reviewing the CFP in order to protect fish stocks and ensure a sustainable fishing industry in the future is aimed at attaining the following goals: to improve conservation policy, promote the environmental dimension, secure consumer protection, adopt an effective fleet policy, develop the Mediterranean dimension of fisheries policy and encourage a more rational harvesting of fish stocks in areas outside Community waters.

Also important is the Commission's announcement on May 28, 2002 to determine a Community action plan on the incorporation of environmental protection requirements into the CFP.

The Community intervenes to a considerable degree in the fisheries sector by means of the financial instrument for fisheries guidance (FIFG), supporting investment in fishing vessels, coastal processing plants, etc.

Clarifying political priorities and the intervention framework (FIFG) for 2000-2006 was deemed necessary in order to achieve a permanent balance between fishing stocks and harvesting, to support the competitiveness of harvesting structures and to develop economically viable businesses, to make the best possible use of fishing and aquaculture products and to revive regions dependent on these sectors.

Other measures in the EU's action plan concern the 6th framework programme on research and further understanding of marine ecosystems, in order to gradually implement an ecosystem-based approach to fisheries management.

The CFP attaches importance to the biological, economic and social dimensions of fisheries and covers the following main sectors:

- With regard to the policy for managing and conserving stocks, based on scientific studies of the most important fish stocks, the EU Fisheries Council announces the quantity of fish which EU fishermen may harvest each year. These maximum quantities, called total allowed catches (TAC) are announced to member states as permissible fishing limits.

In order to restrict catches of young fish, the Council adopted a number of technical regulations. Regulations were also adopted regarding the smallest permissible net openings during a fishing operation. Certain areas can be fenced off to protect fish stocks. Certain forms of fishing (type of fishing is determined by the fish stocks and the fleet which operates within a specific geographical zone) may be banned. Certain methods of selective fishing have been introduced to allow young fish to escape and to restrict catches of other species. Conditions have been set for smaller species of fish and records are required to be kept for all catches.

  • The EU's structural policy supports the fishing sector, adapting it to contemporary needs. Within that framework, programmes are funded which are related to fishing and aquaculture, market research and development. Subsidies are granted for modernising fishing fleets and abolishing surplus fishing capacity. The restructuring of each member state's fishing fleet is planned within the framework of long-term development programmes, which set out the goals and methods of implementation.
  • The original purpose of the common market system for fish and fish products was to set up a common market within the Community and to adjust production to demand for the benefit of producers and consumers. These original goals were later extended with the establishment of the internal market and the gradual development of world trade.

The common market system includes common trade specifications aimed at promoting the sale of fish products, setting up Producer Organisations and a system of support and regulations for trade in non-EU countries.

- Within the framework of international relations, the EU has concluded fishing agreements with a large number of countries in the northern and southern hemispheres and participates in regional fisheries organisations managing fisheries in international waters.

- The CFP sets specific demands regarding the control and monitoring of fisheries in order to safeguard compliance with policy regulations regarding management and conservation of resources. Control involves implementing not only structural policy but also fleet management and market policies. This control function is undertaken by national authorities and it is the responsibility of the EU to ensure that the various control criteria are uniformly implemented.

A very large section of the CFP review was examined during the Danish presidency. The new provisions are to come into effect on January 1, 2003. Issues for debate include the implementation without discrimination of the principle of equal access to waters and stocks, as well as the expansion of the Community's powers with regard to management control of fish stocks and the uniform implementation of sanctions.

In the near future, this major reform drive that began in 2000 must be concluded by organising a new institutional framework for the fisheries sector.


Read also

European Agriculture entering the 21st century 

Prospects for agricultural markets 2002-2009 

Cap reform : a long-term perspective for sustainable agriculture

Commission's Proposal for significant reductions in fishing catches in 2003

Commission's Proposal for a fisheries Action Plan

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