Common Agricultural Policy in IrelandEssay title: Common Agricultural Policy in IrelandAgricultural Policy: What has been the impact of reforms of the CAP on Irish Agriculture since the McSharry reforms and what are the options for Irish Agriculture and rural development in the future?
IntroductionIreland joined the EEC in 1973; Ireland’s economy including agriculture got a major boost after joining the EEC. When Ireland joined the EEC, the agriculture sector was given supports. This scheme was called the Common Agricultural Policy. The Common Agricultural Policy (CAP) was introduced in 1962 with the primary aim of improving the living standards of farmers within the EEC member states. As a result of these supports farmers including the Irish started to over produce. This led to the CAP reforms. This assignment will examine in detail the impact of the CAP and the McSharry, Agenda 2000 and The Luxembourg Agreement reforms. The impacts looked at will be mainly in the dairy and beef industry.
A Brief History of Ireland’s Farmers
The EEC’s success in Ireland in the early 2000s with its liberalisation programmes and the introduction of the CAP and CAP2, led to the opening up of the dairy industry to small farmer businesses. This led to a new era of Irish farmers and led to a boom in dairy exports. As a result of this boom the farmers began to export to non dairy countries including Scotland, the UK, Spain and the United States. A number of small farmers opened shop in a number of developing countries including the UK, Ireland, Scotland and Spain. There was a marked upturn of this growth, however, in 2015.
The EEC’s role in the EDS was well-designed. It took in every EU member state its share of the cost of production, while there was a focus on small agriculture that was shared over with other member states. The EEC held the primary role for the development of new and better ways of growing these crops, and thus increased the share of agricultural products being produced. As a result of the CAP reforms, exports increased, which was reflected by the growth in agriculture exports and the number of small farmers trading in large dairy products, at this time at least three-quarters of all goods exporting the EEC area had grown outside the EU during 2016.
In 2016 the EEC had grown by 2.2%, and agricultural products grew by 16% in comparison with the previous year. During this period all EU members imported as much dairy and beef products as they exported throughout the EU. This growth was accompanied by over 80 000 small farmers opening shops in India, the Netherlands, Canada and Italy.
The EEC’s role in the EDS was well-designed and was managed by both the Government of Ireland and the EEC. Within the EEC, the Government worked in partnership with the European Union on agriculture policy and the EEC was empowered to oversee the management of the EDS. In some cases more than 80 farmers from these countries started buying into the EEC programme. Some farmers from the European Union joined the EEC this year and in 2016 were among the biggest investors in the EDS market, which has grown by 2.1% a year globally.
Ireland’s EEC was an integral part of the UK Government’s global economic strategy focused on improving the living standards of its citizens using low-tech and low-carbon agriculture. In 2017 the UK took in nearly 60% of the growth in exports to and imports from the EEC. Ireland exported more than 17 000 metric tonnes of food products to the EEC for public use. In Europe, agricultural production and consumption are the main driver behind EDS. As a result of the CAP reforms, the EEC gained a third sector in agriculture industry, and in 2015 an additional one in dairy industry, due
Looking then towards the future of Irish agriculture and rural development in Ireland, I will talk mainly about the futures of the dairy and beef industry in Ireland. Coming from a farming background, I will give an in depth look into the future of the dairy and beef sectors in Ireland, the issues facing them and how they can over come these issues and survive, not only in today’s market but into the future. Throughout the assignment I will be looking at information gathered, written and discussed from various sources, and then provide my own opinion on the issue and also the opinions of some practicing farmers in the sector on how the reforms of CAP has affected them and how they think farming in Ireland will evolve in the future.
The Early DaysThe European Economic Community (EEC) was founded in 1957 after the signing of the Treaty of Rome. Its first members were Germany, France, Belgium, Luxembourg, The Netherlands and Italy. These countries were also members of the European Coal and Steel Community (ECSC), which had been established in 1951. The Common Agricultural Policy (CAP) was introduced in 1962 with the primary aim of improving the living standards of farmers within the EEC member states. It was originally a compromise among the six member states, with the following objectives set out under Article 39 of the Treaty of Rome:
To ensure a fair standard of living for farmers and farming communities.To increase agricultural productivity.To stabilise markets.To assure availability of supplies. To ensure fair and reasonable food prices for consumers.To incorporate these objectives, three main principals were set out which would shape the Common Agricultural Policy.Market Unity whereby there would be common prices across the EC and free trade in agricultural produce throughout EC member states.Community Preference, this put in place internal tariff barriers to protect member states from world markets.Financial Solidarity, which would finance common expenditures in the agricultural sector.To establish a common market for agricultural produce, individual markets had to be organized for all agricultural products. These markets are known as Common Market Organisations. These common markets would allow free trade within EEC member states and erect trade barriers to outside markets. Instead of allowing the market to establish the prices for various products, the CAP put in place a guaranteed price. This meant that no matter how low the market price of the good dropped the EEC would protect the market by using a price support system. The price support system was a minimum price set by the civil servants. This was a very costly approach and encouraged farmers to produce as much as possible. Intervention agencies would step in a buy up the surplus.
For this to be successful, the CAP had to stop cheap imports coming in from world markets. To achieve this, a system of border tariffs was set up for each produce. This meant produce could only enter the EC market if the price was at or above the level agreed by Community civil servants. Also another policy was put in place to allow farmers export their produce and compete at world prices. They received an export subsidy which compensated them on the difference between the lower world price and the EC price. These standards were put in place to help support the second principal Community Preference.
The European Agricultural Guidance and Guarantee Fund (EAGGF) were established to cover the financing of the CAP. It consists of two parts, guidance and guarantee.