Alan Swinbank

The Politics of CAP Reform: Trade Negotiations, Institutional Settings and Blame Avoidance

In this article we argue that the conclusion of the GATT Uruguay Round Agreement on Agriculture and the subsequent role of the WTO has changed the international context of CAP policy-making. However, comparing the three latest CAP reforms, we demonstrate that pressures on the CAP arising from international trade negotiations cannot alone account for the way in which the EU responds in terms of CAP reform. The institutional setting within which the reform package was determined also played a crucial role. Contrary to conventional wisdom, the CoAM seems to be a more conducive setting than the European Council for undertaking substantial reform of the CAP. We suggest that the choice of institutional setting is influenced by the desire of farm ministers and of heads of state or government to avoid blame for unpopular decisions. When CAP reform is an integral part of a broader package, farm ministers pass the final decision to the European Council and when CAP reform is defined as a separate issue the European Council avoids involvement.

Decoupled payments to facilitate CAP reform

Abstract There is a long tradition of advocacy of decoupled compensation payments to facilitate reform of agricultural policies. To illustrate this, we cite some of the European literature of the 1960s and 1970s. In the 1980s and 1990s, decoupled payments were frequently proposed, but despite years of discussion there is still surprisingly little agreement on the role that decoupled compensation payments can play in facilitating common agricultural policy (CAP) reform. The Uruguay Round Agreement introduced the so-called blue and green boxes; and the MacSharry and Agenda 2000 reforms have made extensive use of the blue box to shelter an increasing proportion of CAP support from international scrutiny. Blue-box payments are not, however, fully decoupled; and cross-compliance will not turn them green. The Peace Clause provides limited protection for the blue box, but if this were to lapse in 2003/04 the blue-box provisions would be of little worth. We assert that the EU must engage in radical reform of the CAP, and make truly decoupled and transitory compensation payments the central element of that reform. This could best be facilitated by allocating transferable bonds to the present generation of farm operators, with annual payments made to the bond owner. We set out the essential conditions that must be met for a bond scheme to be put in place, and explore in a very preliminary fashion the budgetary implications.

The economics of food safety

Abstract The supply of food safety absorbs scarce resources which have alternative uses. A balance must be struck between the ‘costs’ and ‘benefits’ of increased food safety. Absolute safety is an unobtainable outcome, and the ‘correct’ amount depends upon consumption preferences and income levels. Whether unregulated markets are capable of supplying food safety is debated by economists: many argue that ‘market failure’ is endemic and intervention justified. If governments intervene they should attempt a rudimentary appraisal of ‘costs’ and ‘benefits’; but this involves valuing human life. Intervention can result in nontariff barriers which distort trade.

The impact of the GATT agreement on EU fruit and vegetable policy

Abstract This paper examines the EUs plans for implementing the Uruguay Round GATT Agreement on Agriculture with respect to fresh fruits and vegetables. It considers the import access, export subsidy and domestic support commitments. In particular, the EU has decided to retain a minimum import price regime for fresh fruits and vegetables. The new entry price system, displacing the old reference price system, is to apply on a consignment basis. The entry price and reference price systems are compared, and some conclusions drawn about the likely impact of entry prices on potential Third Country suppliers of the EU market.

Farm Policy and Trade Conflict: The Uruguay Round and CAP Reform

The book is a detailed chronology of the treatment of agriculture within the GATT and the evolution of agricultural policy in the European Union. It describes in detail the seven years of Uruguay Round negotiations and the somewhat related efforts to reform the CAP. The strength of the book is the institutional detail about how agricultural policy is made within the European Union. European agricultural interests have captured agricultural policy just as they have in the United States and all the OECD countries. However, adding the European Union-level bureaucracy to the producer-national government relationship complicates the lobbying process. Readers interested in the role of the European Commission and the European Council in the policy process can find it here. The main conclusion of the book is that only modest liberalization of agricultural trade has been accomplished by the Uruguay Round and its implementation. However, the authors claim that the principle of subjecting agriculture to the same GATT and World Trade Organization rules as other sectors is an important accomplishment. Export subsidies have been restricted and import quotas have been converted to tariff equivalent. Although some of the tariff equivalents are more than 100%, they may be more vulnerable to future liberalization than they were as quantitative restrictions. Although the subject of agricultural trade policy lends itself to economic analysis, the weakness of the book is that it is short on economic analysis. There is a large empirical literature on the effects of barriers to international agricultural trade and the trade-diverting effects of the CAP, but this literature is rarely mentioned. Past EU enlargement has provided empirical data on the effects of expanding from six to nine to twelve to fifteen members, but the book is silent on these effects. The authors do claim, without detailed analysis, that future EU enlargement to include the transition economics of Central and Eastern Europe would make the CAP no longer viable at current support and tax levels. The book cites D. Gale Johnsons 1973 book World Agriculture in Disarray (1991) and uses that title as the title of Chapter two. It would have been appropriate to also cite Johnsons 1950 book on the incompatibility of domestic price controls and free trade. This conflict explains why the agricultural sector has been most resistant to trade liberalization. Readers of a book on agricultural trade might expect a comparison between the variable levies and export subsidies on grain of the European Union and the British Corn Laws with their tariffs and export countries. The comparison is not made in the book. In the Uruguay Round negotiations on agriculture, a distinction was made between government payments related to current production (such as price supports) and payments unrelated to current production (so-called decoupled payments). The former payments were restricted by

Curbing agricultural exceptionalism: The EU's response to external challenge

From the launch of GATT in 1948, through to the Uruguay Round of GATT negotiations, the niceties of international trade rules had little impact on the design and implementation of EU farm policies. GATT was built on consensus, but powerful economic actors (such as the EU) were to a large extent able to implement farm policies that best suited their perceived needs. This agricultural exceptionalism (a term used by political scientists) had been promoted by the US in the 1940s and 1950s, but was cultivated by the EU (and others) in the 1960s and 1970s. However, dating from the Punta del Este declaration of 1986 launching the Uruguay Round, agricultural exceptionalism has been under pressure and the Uruguay Round Agreement on Agriculture of 1994 (the URAA) did, to some extent, curb agricultural exceptionalism and continues so doing through the WTO dispute settlement body.

*Exploring the Determinants of Cap Reform: A Delphi Survey of Key Decision-Makers

A panel of key decision-makers, closely involved in the 1992, 1999 and 2003 CAP reforms, participated in a Delphi survey designed to ascertain what had prompted the European Commission to launch these reform initiatives and what factors were relevant in determining the reform packages subsequently decided by the Council.

Explaining the ‘Health Check’ of the Common Agricultural Policy: budgetary politics, globalisation and paradigm change revisited

Three potential explanations of past reforms of the Common Agricultural Policy (CAP) can be identified in the literature: a budget constraint, pressure from General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) negotiations or commitments and a paradigm shift emphasising agricultures provision of public goods. This discussion on the driving forces of CAP reform links to broader theoretical questions on the role of budgetary politics, globalisation of public policy and paradigm shift in explaining policy change. In this article, the Health Check reforms of 2007/2008 are assessed. They were probably more ambitious than first supposed, although it was a watered-down package agreed by ministers in November 2008. We conclude that the Health Check was not primarily driven by budget concerns or by the supposed switch from the state-assisted to the multifunctional policy paradigm. The European Commissions wish to adopt an offensive negotiating stance in the closing phases of the Doha Round was a more likely explanatory factor. The shape and purpose of the CAP post-2013 is contested with divergent views among the Member States.

Ideational Change in the WTO and its Impacts on EU Agricultural Policy Institutions and the CAP

Abstract This paper argues that the Uruguay Round Agreement on Agriculture (URAA) introduced the market liberal paradigm as the ideational underpinning of the new farm trade regime. Though the immediate consequences in terms of limitations on agricultural support and protection were very modest, the Agreement did impact on the way in which domestic farm policy evolves. It forced EU agricultural policy makers to consider the agricultural negotiations when reforming the Common Agricultural Policy (CAP). The new paradigm in global farm trade resulted in a process of institutional layering in which concerns raised in the World Trade Organization (WTO) were gradually incorporated in EU agricultural institutions. This has resulted in gradual reform of the CAP in which policy instruments have been changed in order to make the CAP more WTO compatible. The underlying paradigm, the state‐assisted paradigm, has been sustained though it has been rephrased by introducing the concept of multifunctionality.

An introduction to the ‘new’ politics of agriculture and food☆

Abstract The agricultural policy agenda has been broadened with farm policy issues now interlinking with other policy domains (food safety, energy supplies, environmental protection, development aid, etc.). New actors promoting values which sometimes conflict, or which are not always easily reconcilable, with those previously guiding agricultural policy have entered the broader agricultural and food policy domain. The studies of various new policy issues inter-linking with the agricultural policy domain included in this special issue show that value conflicts are addressed in different ways and thus result in inter-institutional coordination and conflict unfolding differently. Studies of inter-institutional policy making in the agricultural policy sector have the potential to contribute to theoretical developments in public policy analysis in much the same way as agricultural policy studies did in the past.