7. On the railworkers' struggle see IV No 112, 1987.
PIERRE BRON
The Common
Agricultural Policy
The Common Agricultural Policy (CAP) is today in crisis. It was established at the beginning of the 1960s as one of the big European ambitions and rested on three mainstays: • The definition of a single price: in fact the different products are not affected to the same extent, which partly reflects the differences in the functioning of the agricultural market and the nature of the products, and also the underlyng difference of the relationship of forces between different components of the arming community, to the benefit of the big farmers, usually cereal producers. • A system of Community preference: for the products concerned by Comnunity agreements this means taxing national imports from the world market it a sum equal to the difference between the Community price and the world price, usually a positive difference. The revenue raised is for the Community. • A system of restitution: for export to the world market, the EEC funds estitutions, reimbursing exporters for the price difference. The CAP is today in crisis on several fronts. This is first of all a budgetary risis, but the budgetary aspect should not be the tree which hides the forest. Inderlying factors of imbalance in the CAP have been making themselves elt for several years. These relate to the conditions for supply and demand, to
100 International Marxist Review the forms of remuneration for the producers, to the place of the EEC in the international division of labour, to the forms of production in operation.
The agricultural spending of the EEC has in fact increased greatly, the EEC having become self-sufficient or over-supplied in certain agricultural products, which has led to an increase in the costs of supporting the market.
This is shown by the evolution in spending by the European fund which manages the intervention into the agricultural market (the European Agricultural Guidance and Guarantee Fund, EAGGF). (See Table 1.)
This increase is put into question by the logic of austerity policy. It is violently contested bu the countries which wish to limit their contribution to the EEC and let free-market mechanisms have their effect (notably Britain'). It is denounced by the Commission in Brussels as an obstacle to the implementation of new Community policies because this spending represents approximately two-thirds of the Community budget.
Behind this increase in spending should be seen:
• The price system and forms of reimbursement for the producers. Most of the spending goes to supporting the market. Spending increases with the volume of production to the benefit first of the biggest and most efficient producers. Moreover, despite price support, there has been a big reduction in the active population involved in agriculture. In France, the number of agricultural enterprises has fallen from 1.6 million in 1970 to 1 million today, and the range of different incomes, which is very broad in agriculture, has been maintained and even increased in certain cases. In fact there has been more support to certain products than to others, certain regions have been particularly victims of competition, certain categories of producers have been marginalized. The logic has been that of a system where the race to productivity and increase in public spending support each other which reproducing the disparities and moving the threshold of competitivity below that where elimination or marginalization are seen. • The place in the international division of labour: despite the rise in excess production in certain fields, agro-alimentary trade in the EEC remains in deficit. This comes from: • obligatory imports (of products which cannot be produced in the EEC); • imports from developing countries tied to the EEC by cooperation agreements, which are the counterpart to the agricultural and industrial exports of the EEC, the overall balance being an excess in favour of the EEC; • the choice to import cattle food replacing Community cereals exempt or almost from customs duties, from developing countries or the United States in particular. The USA has recently stepped up its offensive for free access to
the Community market. What is at stake here is the very foundations of the
CAP and more precisely the possibility of an agricultural policy which is not a plaything of the pressures of the world market. At the cost of a brutal restructuring of American agriculture, Reaganite policy is to force a dismantling of protectionist mechanisms in order to let free-market mechanisms have free play and win back sections of the market. This is today a hot spot for trade confrontations between the EEC and the USA and one of the important aspects for confrontations within the GATT. It is moreover not obvious that the USA has the necessary relationship of forces to impose their choice (particularly as it is not unanimous among the American ruling class). A possible basis of compromise could be a partial reduction of protectionism and and
• The models of production are based on the following elements: models which are costly in resources and which have only been able to be reproduced
Faced with the crisis of the CAP, the response of the Community is based
• to reduce prices and the cost of price support on the market, in particular the establishment of budget stabilizers, aiming to reduce prices and to link automatically the realization of a surplus to a reduction in the cost of
• to encourage a halt to agricultural activity and extensification;
• to envisage supplementary income support for certain producers or in certain zones, managed partly by the country, partly by the Community.
These proposals flow from a primarily budgetary logic. The dominant element is the desire to lower prices and the cost of market support without a real differentiation of intervention according to the quantities produced and the con-
1973
1974
1975 share-out of export markets.
on three major elements:
interventions;
3,806
3,513
3,980 with major but unequal public support.
. Table 1
Guaranteed portion of EAGGF
(in millions of Ecus)
1988
1987: provision figures; 1988: projection
The Common Agricultural Policy 101
22,122
1986
1987
22,961
25,045
102 International Marxist Review crete economic situation. The example of the application of the milk quotas illustrates this point. In France, for example, the production quotas were attributed to farms on the basis of references acquired before the introduction of quotas and the dairies were charged with managing them. This approach leads to an increased reduction in agricultural employment (with foreseeable effects on rural employment and the social fabric) either by directly encouraging people to leave or indirectly by a drop in prices and the increased selection of the farms.
They will also lead to increased imbalances in the occupation of space, the risk being that they increase a dual movement of concentration of production in zones where production costs are lower, and marginalization indeed desertification in more difficult zones which have higher production costs or are further from transport networks and centres of consumption. In time, this will lead to increased ecological degradation of certain zones and an increased dispossession for the population of the context in which they live.
Nonetheless, the EEC has to be in control of agricultural spending: the logic of increasing costs of price support which benefits first the more favoured producers has nothing very socially progressive about it. The unloading of cut-price "food mountains" on the world market contributes to bringing down world prices, to undermining the development of agriculture in the third world, to destroying the peasantry in these zones. This control could be exercised through a free-market budgetary logic. But it could also be exercised through control and a share-out of production which could be an instrument for a policy of defending jobs and incomes, an instrument for a balanced development of territory.
This means that budgetary constraints would not simply be worked out globally, but selectively and in function of particular objectives, orientated in particular towards a ceiling of market support so that working farmers are remunerated but not those who are already in the best situation. Mechanisms for guaranteed prices for given volumes of production can work towards the same objectives. The defence of farmers' incomes should not depend on sparse supplementary aid and the hazards of assistance policies. Moreover, the transfer of financial resources towards the "structural" funds of the EEC (EAGGF, Social Fund, Regional Fund) only has any sense if it is accompanied by social control over the purpose of these funds and the content of policies applied.
This supposes that they would not be domains reserved to Community and governmental institutions, but that in particular the organizations of farmers and agricultural workers could make their voices heard, to have an impact on
Britain is particularly opposed to the CAP because, historically, the British bourgeoisie made the choice in the 19th century to supply its food needs from foreign markets, thus sacrificing a large part of its own agriculture. The system of Community preference and the price difference between the EEC and the rest of the world the programmes decided and oversee their implementation.
implies big contributions by Britain to the Community budget.
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