Why agriculture is so important for the EU

Why agriculture is so important for the EU
Why agriculture is so important for the EU

Why the CAP was born

For all these companies and all these employees, a fundamental role is played by the Common Agricultural Policy (CAP), i.e the set of rules which regulate the agricultural sector in EU countries. The CAP is financed by two sources: the European Agricultural Guarantee Fund (abbreviated in Italian with the acronym “EAGF”), which delivers subsidies to farmers and finances market support measures; and the European Agricultural Fund for Rural Development (EAFRD), which contributes to the sustainable development of rural areas. Both of these funds receive money from the EU’s multiannual budget, which is funded from various revenues, including contributions from Member States and duties.

The idea of ​​having a unified agricultural policy at European level dates back to the birth of the European integration process. Already in the Treaty of Rome of 1957, which established the European Economic Community (EEC), appeared the first reference to the «establishment of a common policy in the agricultural sector». «In those years the primary sector was decisive for the European economy: in Italy 40 percent of the population was employed in agricultural activities», explained Graglia. As we have seen, over the years this percentage has dropped significantly, reaching the current 3 percent.

For the governments of the founding states of the EEC (Italy, France, Germany, the Netherlands, Belgium, Luxembourg) incentives for farmers were considered strategic to obtain electoral consensus. «Unlike workers, people employed in agriculture did not have a predetermined attitude of political loyalty: their vote traditionally went to those who ensured more subsidies and support policies. For this reason, it was above all the governments of France and Italy that pushed in the direction of the CAP, with the aim of gaining the support of farmers and hindering the rise of the communist and socialist parties, which are particularly strong in these countries”, continued Graglia.

Controlling price trends was one of the other objectives underlying the nascent common agricultural policy. «Most of the consumption concerned products deriving from cultivation or breeding. Maintaining reasonable prices, i.e. convenient for those who produce and acceptable for those who consume, became a tool for controlling the level of inflation”, underlined the professor from the University of Milan. To achieve this objective, a policy of subsidies and aid was considered necessary that would make continuing agricultural activity attractive and convenient. In those years, characterized by strong economic growth, industrialization was pushing more and more farmers to abandon the countryside to seek work in city factories. «We wanted to avoid a shortage of food at all costs. Indeed, the objective was to achieve agri-food self-sufficiency in Western Europe, avoiding resorting to imports from abroad”, explained Graglia.

 
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