Opinion: The need for the CAP

This is the last article in a three part series of articles based on interviews with Lib Dem MEPs George Lyon and Phil Bennion about reform of the Common Agricultural Policy (CAP). The other two articles can be found here and here.

One of the subjects which came up in the interviews was whether or not to have a CAP at all. Both of them made some interesting points about the subject.

Phil Bennion made the argument that it was necessary for the sake of global food security.

“We have to approach food security, not just from Europe’s point of view but on a global basis. We do have such a large proportion of the land that can produce food... A lot of the land in the world is useless, you can’t simply move it around to where it’s cheapest to produce.

“And there’s so many market failures in agriculture that advocates of no CAP at all would end up with a lot of unforeseen, well unforeseen from their point of view, circumstances. But for those of us who deal with agricultural economics, rather than classic, industrial economics, they would be quite easy for us to foresee.”

“The fact is that it costs four to five times as much to produce a unit of carbon in a food form in somewhere like halfway up Finland than it does in central Brazil. But you can’t tow Finland down and park it off the Brazilian coast and give them the extra capacity. And turning the rainforest into farmland has certain negative effects, so... you have a situation where the low cost producer is unable to take over the production of the high cost producer - that’s the major flaw in using classical economics.”

George Lyon had a slightly different view. His view seemed to be that mechanisms were needed to smooth out the volatility of the recently liberalised agricultural markets.

“The market barriers have been reduced to allow imports to flow freely. Production constraints, i.e. quotas on milk and all the rest of it, have been slowly dismantled as well. So there’s been a huge liberalisation and the old CAP of the past is now long dead and buried, thank god, and will hopefully not come back. And the drive has been to a much more market focused policy, and one where the public purse rewards for the delivery of public goods, and that’s the direction we want to keep pushing in.

“And farmers now respond to the market place - we’ve seen that now over the last five years, whereby the world market price now drives the price of basic commodities, and what we now see is quite significant volatility.”

But with a billion people in the world already going hungry I asked George whether volatility might not necessarily be a good thing.

“That is a very significant issue. What we do need, in times of substantial volatility, and especially big, big falls in the market price, are mechanisms that can at least try and smooth that out a little - and there are various tools that can be used to try and manage that situation better.

"But as we’ve learned in the past, trying to manage world markets of food production just ends up with huge mountains of food, if you’re not careful - and therefore at least the policies of the past failed in trying to manage that better.

"What you need to do is to ensure that we actually have a competitive agriculture that can deliver and meet the demands of consumers going forward. And that actually means building up a sustainable agriculture industry, and an agricultural production system, one that’s not based and wholly reliant on cheap energy and cheap fossil fuels."

* George Potter is a Vice-Chair of the Social Liberal Forum and a campaigner for Guildford Liberal Democrats, writing in a personal capacity.

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One Comment

  • Interetiing series of articles, George and useful to understand the thinking of our MEP’s on the future of the CAP.

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