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The EU Common Agricultural Policy

The common agricultural policy is one of the key European Union policies as agricultural expenditure accounts for 45% of the EU budget. It is also one of the most contentious areas of EU involvement.

So what sectors are affected by the common agricultural policy?

The Common Agricultural Policy covers a very wide range of sectors. This includes

  • Live animals
  • Meat and edible meat offal
  • Dairy produce, birds eggs, natural honey
  • Guts, bladders and stomachs of animals (other than fish) whole and pieces thereof
  • Animal products not elsewhere specified or included; dead animals unfit for human consumption
  • Live trees and other plants; bulbs roots and the like, cut flowers and ornamental foliage.
  • Edible vegetables and certain roots or tubers
  • Edible fruit and nuts; peel of melon or citrus fruit.
  • Coffee, tea and spices, excluding mate
  • Cereals
  • Products of the milling industry, malt and starches, gluten, inulin
  • Oil seeds and oleaginous fruit, miscellaneous grains, seeds and fruit, industrial and medical plants; straw and fodder.
  • Pectin
  • Lard and other rendered pig fat; rendered poultry fat.
  • Unrendered fats of bovine cattle, sheep or goats; tallow (including premier jus) produced from those fats.
  • Lard stearin, oleostearin and tallow stearin, lard oil, oleo oil and tallow oil, not emulsified or mixed or prepared in any way.
  • Fixed vegetable oils, fluid or solid, crude refined or purified.
  • Animal or vegetable fats and oils, hydrogenated, whether or not refined, but not further prepared.
  • Margarine, imitation lard and other prepared edible fats.
  • Residues resulting from the treatment of fatty substances or animal or vegetable waxes.
  • Preparations of meat
  • Beet sugar and cane sugar, solid
  • Other sugars; sugar syrups;artificial honey (whether or not mixed with natural honey) caramel.
  • Molasses, whether or not decolourised.
  • Flavoured or coloured sugars,syrups and molasses, but not including fruit juices containing added sugar in any proportion.
  • Cocoa beans, whole or broken, raw or roasted.
  • Cocoa sheels, husks skins and waste.
  • Preparations of vegetables, fruit or parts of plants.
  • Grape must, in fermentation or with fermentation arrested otherwise than by the addition of alcohol.
  • Wine of fresh grapes, grape must with fermentation arrested by the addition of alcohol.
  • Other fermented beverages (for example cider, perry and mead)
  • Ethyl alcohol or neutral spirits, whether or not denatured, of any strength obtained from agricultural products listed in Annex 1 to the Treaty, excluding liqueurs and other spirituous beverages and compound alcoholic preparations (known as concentrated extracts) for the manufacture of beverages.
  • Vinegar and substitutes for vinegar.
  • Residues and waste from the food industries; prepared animal fodder.
  • Unmanufactured tobacco, tobacco refuse.
  • Natural cork, unworked, crushed, granulated or ground; waste cork.
  • Flax, raw or processed but not spun; flax tow and waste (including pulled or garnetted rags)
  • True hemp (Cannabis sativa) raw or processed but not spun; tow and waste of true hemp (including pulled or garnetted rags or ropes

What are the objectives of the Common Agricultural Policy (CAP)

All of the EU Member governments agreed when the last Treaty was being drafted that the objectives of the common agricultural policy should be:

  • to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;
  • thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
  • to stabilise markets;
  • to assure the availability of supplies;
  • to ensure that supplies reach consumers at reasonable prices.

In working out the common agricultural policy and the special methods for its application, account will be taken of:

  • the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions;
  • the need to effect the appropriate adjustments by degrees;
  • the fact that in the Member States agriculture constitutes a sector closely linked with the economy as a whole.

In order to attain the objectives listed above, the Member governments agreed that a common organisation of agricultural markets would need to be established. These would take one of the following forms, depending on the product concerned:

(a) common rules on competition;
(b) compulsory coordination of the various national market organisations;
(c) a European market organisation.

The common organisation of agricultural markets might cover all measures to attain the above objectives, in particular

  • The regulation of prices,
  • Aids for the production and marketing of the various products,
  • Storage and carryover arrangements and
  • Common machinery for stabilising imports or exports.

Its role is limited to pursuing the objectives outlined above. Any discrimination between producers or consumers within the EU by the common organisation of agricultural markets, should be excluded.

Any common price policy will, according to the Treaty, be based on common criteria and uniform methods of calculation.

To enable the objectives set out above to be acheived, provision may be made within the framework of the CAP for measures such as:

  • an effective coordination of efforts in the spheres of:


o vocational training,
o of research and
o of the dissemination of agricultural knowledge; this may include joint financing of projects or institutions;

  • joint measures to promote consumption of certain products.


Under the terms agreed by the Member governments when the last Treaty was signed, the Council may replace the national market organisations by a common organisation if:

(a) the common organisation offers Member States which are opposed to this measure and which have an organisation of their own for the production in question equivalent safeguards for the employment and standard of living of the producers concerned, account being taken of the adjustments that will be possible and the specialisation that will be needed with the passage of time;

(b) such an organisation ensures conditions for trade within the Community similar to those existing in a national market.

Under the CAP, where in a Member State a product is subject to a national market organisation or to internal rules having equivalent effect which affects the competitive position of similar production in another Member State, a countervailing charge will be applied by Member States to imports of this product coming from the Member State where such organisation or rules exist, unless that State applies a countervailing charge on export.

It will be up to the Commission to fix the amount of these charges at the level required to redress the balance. The Commission may also authorise other measures to deal with this specific situation.

Agriculture is governed by the consultation procedure, and is also one area over which the EU has exclusive competence. The effect of exclusive competence means that Member States no longer have the power to introduce their own legislation in these areas.

They can only act within the limits of strictly defined management/implementing powers delegated back to the national governments by the EU. If the EU comes out with legislation in these areas the national governments may come out with their own national legislation to implement them, but they may not come out with their own legislation outside of the EU framework, particularly anything that conflicts with EU law.