Written on: 2019-12-14

Common Agricultural Policy

The Common Agricultural Policy (CAP) is a keystone of the European Union (EU). It was created in 1962, back when the EU was still only the European Economic Community (EEC).

The CAP is a system intended to support agriculture within the EU by boosting prices and subsidizing production. Prices are boosted by restricting the import of goods into the EU, while production is subsidized by paying subsidies directly to European farmers.

The CAP costs the EU €50 billion each year [1]. It is the single largest item in the EU budget [2]. The vast majority of this goes on direct payments to farmers [3].

Well, I say “farmers”, but it would be more accurate to say “land owners”. Recipients are paid according to how many hectares of land they own. Thus EU funds, which ultimately come from taxes raised by national governments, are given to those who own the most land.

In the UK, Sir James Dyson owns around 10,000 hectares, which is why his company received more EU farm subsidies than any other for-profit enterprise in the UK in 2017. He and his family are currently worth £7.8 billion, yet he received £1.6 million in subsidies under the CAP. One in five of the 100 largest CAP payments went to a billionaire or millionaire on the Sunday Times Rich List [4], including the Duke of Westminster, Queen Elizabeth II, and Prince Khalid Abdullah of Saudi Arabia.

There is a minimum farm size before it becomes eligible for subsidies, which is currently set at 5 hectares [5].

By paying subsidies per hectare, the CAP increases the effect of economies of scale and encourages small farms to consolidate into large agri-businesses. At the same time, only large businesses and wealthy investors can now afford to buy farmland: the average price of farmland in the UK has more than doubled since the introduction of CAP subsidies per hectare [6]. Small farmers are being forced out of business, to be replaced by investors or agri-businesses [7].

To be clear, these subsidies are not for farming: they are for owning land. For the purposes of CAP subsidies, a “farmer” may be a person or business that “keeps some land in a state suitable for grazing or cultivation by keeping it clear of any scrub that can’t be grazed” [5]. It is not necessary that the land actually be used for grazing or cultivation, only that it could be so used.

The need to keep the land cleared such that it could be used for grazing encourages land owners to destroy wild areas. Subsidies cannot be claimed for any area containing dense scrub, unmanaged heather or bracken, wide hedges, ponds, large salt marshes or reed beds, or woodland [5]. This has had a devastating effect on wildlife, including a 50% drop in wild bird populations [8].

The Common Agricultural Policy is a system of regressive taxation that takes from the general populace and gives to the rich, that drives small and independent farmers out of business, and that promotes the destruction of wildlife habitats. It is a policy that manages to unite people across the political spectrum — Left and Right, Brexit and Remain — in condemnation.

George Monbiot wrote in the Guardian newspaper, “All the good things the EU has done for nature are more than counteracted by this bureaucratic idiocy. Millions of hectares of wildlife habitat in the EU are threatened by this rule; clearance has taken place already across vast areas.” [9] And, “The one good thing about Brexit? Leaving the EU’s disgraceful farming system… It is among the most powerful drivers of environmental destruction in the northern hemisphere… These payments have led to the destruction of hundreds of thousands of hectares of magnificent wild places across Europe… It is also arguably the most regressive transfer of public money in the modern world.” [10]

Meanwhile, Roger Scruton wrote in the Spectator, “Because subsidies have been calculated by acreage, they both push up the price of land and benefit those who own the largest chunks of it — which means absentee agribusinesses. The CAP is indeed one major cause in the decline of the real rural economy — the economy of the small farmers who live and work in the fields.” [11]

Environmental groups are similarly critical. The World Wildlife Fund wrote, “[T]he environmental damage we have suffered while inside the current Common Agricultural Policy has been significant. Soil health has deteriorated. Numbers of farmland bird species such as the Grey Partridge, Tree Sparrow, Skylark, Linnet and Yellowhammer have dropped. Precious UK habitats have been eroded. Overall, there have been huge losses in wildlife over the past 50 years.” [12]

Perhaps Paul Kingsnorth put it best when he wrote, “Hedges were filled in, downlands destroyed, water meadows and marshes drained and ancient monuments ploughed into history to create more land for crops that no one needed. Farmers were paid to do this through the European Union’s Common Agricultural Policy, which raped the English countryside and charged its people £10 billion of their own money every year for the privilege.” (Real England, Granta Books, 2009)