Download NBB AN193 G3 ESP 5 – The Economy of the EU DP 5 5. Agricultural

NBB AN193 G3 ESP 5 – The Economy of the EU
DP
5
5. Agricultural patterns and policies
Agriculture: basic productive activity, low share in the labour force and in the GDP / GNI, yet
still important – food supply, quality.
Branches: land cultivation and livestock rearing; their connections (crops can be grown to
feed animals, manure or power of animals used in land cultivation). Forestry and fishing are
often considered as parts of agriculture
Two main types of agriculture: subsistence agriculture and commercial agriculture.
Commercial agriculture: small number of farmers, large farms, developed activities
(technological and scientific innovations are used – machines, chemicals), the output is sold to
processors (market-oriented activity)
Types of commercial agriculture:
mixed crop and livestock farming (growing crops mainly for animals)
dairy farming (specialises in producing milk and related products)
grain farming (growing crops for consumption by humans rather than by
livestock)
ranching (commercial grazing of livestock over an extensive area)
Mediterranean agriculture (significant and developed land cultivation,
principally fruits and vegetables; insignificant livestock rearing)
commercial gardening and fruit farming
plantation farming (tropical, subtropical areas; it specialises in producing few
kinds of products over a large area)
Agriculture and the physical environment:
Agricultural activity is closely connected with the physical environment – through the
climate, soils and landforms.
climate: it limits the geographical distribution of agriculture and determines
what can be grown in a given place (important elements: temperature,
precipitation, hazards)
soil: it is determined by the climate and the vegetation
landforms: relief – slopes have an influence on the climate, on soil erosion
and on the use of machines
Socio-economic conditions also have an important influence:
land (availability, size, quality)
labour (availability, qualifications, willingness)
market (population or industry)
subsidies (government support)
technology (information, availability)
Agriculture in the EU
Significance:
share in the GDP: 2%
share in the labour force: 4.3% (12.7 million people in the EU27)
utilised agricultural area: 45% of the total area of the EU (14.5 million
agricultural holdings)
The Common Agricultural Policy
Beginnings: strong state intervention in agriculture – what is produced, prices, marketing and
farm structures; Ù free movement of goods > need for a common policy of regulation – CAP,
introduced in 1962
NBB AN193 G3 ESP 5 – The Economy of the EU
DP
5
Objectives – Article 33 of the EC Treaty:
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
Achievements:
self-sufficiency after years of food shortages in the 1950s
surpluses even
1980s: worldwide changes in agriculture > need for reform
Reforms:
1988: stricter budgetary discipline, penalising the exceeding of certain
production levels, measures to reduce supply (arable land set-aside system,
extensification of production, conversion of surplus products), direct income
aid system
1992: replacing a system of protection through prices with a system of direct
income support for each agricultural sector
Agenda 2000: stressing the need to continue the process of aligning CAP
prices with world prices and compensating for this with direct income
support; aiming for a more environmentally-friendly and quality-conscious
agriculture
MTR (mid-term review of the CAP), 2002: competitive agricultural sector,
environmental concerns, food safety
2003: reform of the CAP – changes in the CMOs (common market
organisations); single farm payment – decoupled from the products and their
quantity
Objectives of the new reform of the CAP:
to enhance the competitiveness of a sustainable and more market-oriented
European agriculture
to stabilise the income of farmers while at the same time ensuring the
stability of budgetary costs
to produce high-quality foods which meet the public's expectations and
demands;
to strengthen the negotiating position of the EU in WTO discussions
The CAP after reform:
1. First pillar of the CAP
a. The single common market organisation – governing the production and trade
of certain products
b. Direct aid to farms. Earlier: production-oriented philosophy; 2003: single farm
payment (based on the amount of aid received during the reference period,
decoupled from the selection of products and amounts offered)
2. Second pillar: rural development policy
NBB AN193 G3 ESP 5 – The Economy of the EU
-
DP
5
intending to make agriculture and forestry more competitive
to strengthen the links between primary activity and the environment
to improve the quality of life in rural areas
to promote a diversification of the economy in rural communities
Financing the CAP:
earlier: European Agricultural Guidance and Guarantee Fund (EAGGF)
1 January 2007:
i. European Agricultural Guarantee Fund (EAGF)
ii. European Agricultural Fund for Rural Development (EAFRD)
General features of agriculture in the EU
small percentage of agricultural population
increasing land concentration
size of farms is smaller than in the US
intensive activities (achieving higher yields by more work rather than by an
extension of the land resources)
increased significance of machines and chemicals
cooperation of individual farmers (buying machinery, selling or processing
the output together rather than individually)
former socialist countries: large agricultural enterprises (former cooperatives)
and small farms, less developed level of agriculture
Agricultural patterns in the EU
Agriculture is close connection with the climate > types depend on climatic conditions
General types:
marine climate areas: principally livestock rearing (climatic conditions favour
pastures over arable lands) – dairy farming, mixed crop and livestock farming
continental areas: equal share of land cultivation and livestock rearing
Mediterranean areas: developed land cultivation in certain areas, mainly
fruits and vegetables; underdeveloped livestock rearing
mountain climates: livestock rearing
Regional varieties:
-
-
-
Benelux countries:
i. the most developed agriculture in Europe
ii. principally livestock rearing – cattle and poultry
iii. land cultivation – mainly serving livestock rearing
iv. the Netherlands: special element – flowers
United Kingdom
i. not self-sufficient – need to import food
ii. highly specialised, modern agriculture; very high land concentration
iii. livestock rearing dominates – cattle and sheep
iv. land cultivation – in the southeast mainly; wheat, barley, fruits and
vegetables
Denmark
i. highly developed agriculture; cooperatives
ii. livestock rearing dominates – cattle, pig, poultry
NBB AN193 G3 ESP 5 – The Economy of the EU
-
-
-
-
-
-
DP
5
iii. land cultivation – serving livestock rearing
iv. significant exports
France
i. the leading agricultural producer of the EU
ii. changes in the last few decades – increasing significance of land
cultivation
iii. grains – wheat, barley, maize; sugar beet, potato, sunflower
iv. vine growing and wine production
v. fruits and vegetables – principally for the domestic market
vi. livestock rearing – cattle, pig, sheep
Germany
i. the most populated country of the EU, generally poor soils – yet highly
developed agriculture, producing 90% of the necessary food
ii. livestock rearing dominant (60%) – cattle, pig, poultry
iii. land cultivation: wheat, barley, hop (>beer), potato, sugar beet
Italy
i. great variety in terms of land ownership
ii. vine growing and wine production – one of the leading producers
iii. olives, citrus fruits, vegetables – among the leaders in Europe
iv. rice, tobacco, soybeans – the main producer in Europe
v. livestock rearing: small significance
Spain
i. great economic significance (in spite of its small share in the GDP)
ii. great variety – diverse physical conditions of the country; sharp
contrasts between the irrigated areas and the rest
iii. grains, vine, citrus fruits, vegetables, olives
iv. livestock rearing: little significance; special element: bull
Greece
i. greater share in the GDP than usual and very high percentage of
agricultural workers in the labour force compared to other developed
countries
ii. low level of development
iii. tobacco, citrus fruits, olives, vine growing, cotton – significant
production
the former Eastern block countries
i. higher percentage of agricultural population, greater contribution to the
GDP
ii. land ownership – great variety; in many places: former cooperative
farms; lots of small farms
iii. generally less developed agriculture in terms of technology – yet
considerably cheaper products of good quality > often providing
significant competition for the earlier members
iv. not yet accessing the full benefits of the CAP (direct payments will be
phased in gradually until 2013)