The problems of the CAP are well known. But viable solutions to bring an end to the negative effects of European agriculture are hard to find.
– The solution is a radical over-haul of the current system where re-nationalisation of agricultural subsidy programs combined with the elimination of export subsidies and the fast reduction of import duties over a period of 5 years is crucial, says Dr Wickman.
- Dismantle all price-rigging schedules immediately (intervention and target prices).
- Abolish export subsidies immediately.
- Reduce import duties immediately and remove them completely in the short term.
- Reduce and abolish farm subsidies over a 5-year-period (20 % reduction annually).
- Re-nationalize the subsidy programs for agriculture.
– A re-nationalisation of the policy for agricultural subsidies will reduce the effects of the agricultural lobby which represents only a small portion of the European economy and population, says Dr Wickman. (Agriculture contributes only 3 to 4 % to the EU’s combined GDP but takes half the EU’s budget.)
– The effects of the common agricultural policy are different from what the original architects had in mind. Still the fundamental misallocations cannot be ignored, we need radical reform now, concludes Dr Wickman.
The negative effects of a delay in CAP-reform will result in:
- European consumers still paying twice as much for food stuffs than with free trade.
- Farmers’ incomes not being protected when subsidies are capitalised by large farms.
- Export subsidies disrupting world markets and poisoning EU external relations.
- CAP-induced trade conflicts undermining trust in global free trade.
- Difficulties for EU-enlargement to the east.