The EU's Common Agricultural Policy Has Created a Farming Crisis

European farmers have been in the news in recent months due to high-profile protests against climate policies, which they argue put a disproportionate burden on their already thin margins, as well as European Union trade deals, which they claim expose farmers to unfair competition from global producers. Combined, the twin pressures have radicalized many in the sector, while putting a spotlight on the EU's climate and trade policies.
But less attention has been paid to a quieter but nonetheless significant risk facing European agriculture: the distortions introduced into the sector by the bloc's Common Agricultural Policy, or CAP, and their impact on the security of Europe's food supply.
The first iteration of the CAP was introduced by the six founding members of what was then the European Economic Community, or EEC, back in 1962. Its principal objective was to increase food production, which had fallen drastically in the immediate postwar years due to labor shortages and damage to agricultural land.
The policy also aimed to raise farmers' wages and improve food security by offering farmers a "guaranteed price for their produce and introducing tariffs on external products." In the subsequent half century, the CAP has been pivotal in the transformation of European agriculture, helping to usher in an agri-business model that has increased production but at the cost of driving thousands of farmers from the land, degrading the environment and enriching big landowners at the expense of smaller
ones.
As a result, it now threatens the long-term security of the bloc's food supplies.
A key driver in the transformation of the bloc's agricultural model was the CAP reforms of the early 1990s, which saw a move away from the original price support system toward "direct income support for farmers … based on the area of land cultivated or number of livestock maintained." These changes inevitably favored bigger farmers, leading to "land grabbing" by large producers and a major decline in the European model of family farming, according to ARC, a voluntary rural organization dedicated
to preserving family farms across the bloc.
The inequitable consequences of the reforms were belatedly acknowledged by the EU itself in 2013, when it pledged a more equal distribution of support by "limiting the budget for big farms."
The demographic crisis in farming has been exacerbated by the CAP's drive to create ever-larger units.
But the rhetoric on greater equality has not translated into substantive change. A 2021 report for the European Parliament on the biggest beneficiaries of CAP funding found that between 2018 and 2021, a staggering 3.3 billion euros ended up in the coffers of 17 billionaires. Recipients included former Czech Prime Minister Andrej Babis and British vacuum cleaner tycoon James Dyson.
At a time when thousands of small farmers are struggling for survival or throwing in the towel, such largesse for the super-rich raises serious questions about the fitness for purpose of the CAP and the effects of multiple rounds of reform over the years.
Attempts to root out abusive practices in the bloc's food supply chain through CAP reform have also floundered in the face of both powerful special interests and the complexities of the EU single market rules. Food producers have long complained about the overwhelming power of the massive supermarket chains that maximize profits by relentlessly squeezing producers' profit margins.
In response to unfair trading practices in the supply chain, the European Commission set up the much-vaunted Agricultural Markets Task Force back in 2016. Its final report contained a whole host of recommendations to reform how CAP regulates the relationship between food producers and retailers, in order to give farmers a fairer deal.
Yet almost a decade on, a major survey conducted by the food charity Sustain found that farmers still typically make a profit of less than one cent on staples like a loaf of bread or a block of ch...