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Gerard Moore 24 / February / 20

Globalization changed the configuration agricultural in the EU

Current status and prospects of agriculture in the EU
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Since the early 1960s, when a common agricultural policy was formed in the EU, major changes have taken place in the agricultural sector. Its economic position and social structure have changed, the technological component has strengthened, and requirements for environmental protection and food quality have increased. As the EU expanded, its rural landscape became more diverse. At the same time, the social differentiation of farms increased. Globalization has significantly changed the configuration of global agricultural markets.

The objectives and structure of the SСE

All this led to a change in the goals of the SCE, their hierarchy and content. Increasing agricultural production is no longer an EU priority. Instead, the increase in its profitability, the development of promising new sectors of production, the optimal use of natural resources, and the protection and improvement of the environment come to the fore. If in the first decades of the functioning of the CAP, it was intended to guarantee stable incomes of farmers, now the emphasis is on improving the quality of life of the rural population and on the integrated development of the village.

The implementation of these new goals was aimed at systemic reforms of the OSB, carried out since the beginning of the 1990s. They led to the formation of two interconnected, but separate “pillars” of the OSB.

"The first (production - trade) support" deals with the organization of agricultural markets and farm incomes. It uses predominantly supranational measures to regulate markets and production, mainly through the General Organization of Markets system. In 2007, there were 21 organized markets in the EU, including: grain, pork, beef, poultry and eggs, dairy products, fruits and vegetables, wine, sugar, etc. There are special regimes for some goods (for example, cotton) manufacturers support. Outside this system, only a small part of the agricultural sector's products is left, for example: silkworms, honey, coffee, horse meat. However, partly the OSB affects them. For example, funds are allocated from the EU budget to fight bee diseases and to promote honey on the Union’s domestic market. The European Union also finances legislative protection measures for coffee brands with confirmed geographical origin.

Compared with the first stages of the CAP, the importance of instruments of direct (non-market) impact on agriculture has noticeably increased. The decline in EU intervention prices under the pressure of the WTO, the growth of domestic demand, cheaper imports due to lower world prices and the appreciation of the euro all sharply reduced the effectiveness and significance of EU intervention in most organized markets. The costs of these activities in 2000-2006. Accounted for 10% of the total budget of the “first pillar”. The value of export subsidies has also decreased (now they account for less than 9% of the costs in the “first pillar”).

At the same time, expenditures on direct subsidies associated with the production of specific products and with a reduction in cultivated areas increased markedly (almost to 80%). By 2013, direct payments will account for 91% of the costs of the "first pillar", and will be carried out mainly in the form of single agricultural payments. Moreover, at 100% of these payments will be made on the basis of mutual compliance (that is, compliance with environmental and quality standards). This will reduce environmental pollution, reduce the area of cultivated land, as well as occupy part of the arable land (up to 15% by 2020) with crops for biofuel production.

The “second (socio-structural) pillar” is intended to support the balanced development of rural areas, contribute to improving the standard of living in rural areas, as well as reduce socio-economic imbalances between EU countries and regions. At present, in terms of its scale, it surpasses the previous structural measures of the GSP and the “concomitant” measures of McSherry reform.

The "second help" is conformed to three principle (tomahawks), for example regions giving focused on convergence of provincial advancement measures. The primary pivot is expanding the seriousness of the rural area. It incorporates a wide scope of measures focused on the advancement of human resources. Among them: professional preparing, youth help, early annuities for more seasoned ranchers, data and counseling administrations. The main hub additionally incorporates an assortment of measures pointed toward modernizing creation and creating rustic zones. The people group encourages ranchers to dominate the creation of new sorts of items, revamp the economy, present new advancements for the creation and preparing of agrarian items. Developing consideration is being paid to the advancement of provincial foundation. In the EU, increasingly more significance is appended to improving the quality and security of food items, for which extraordinary guidelines and declarations are presented.

The subsequent pivot is the improvement of the climate and rustic scenes, by paying pay to ranchers in awkward mountain areas, uncommon agroecological installments (200-900 euros for each hectare), installments for improving animal government assistance (50 euros for every head), sponsoring afforestation of horticultural land, and so on

The third hub is the personal satisfaction and enhancement of monetary movement in country regions. It incorporates, bury alia, the accompanying measures: improving the entrance of laborers to essential administrations; improvement and reestablishment of the lodging load of towns; social legacy security; non-horticultural work advancement; advancement of provincial the travel industry; advancing independent company advancement. The LEADER program appends this hub to help the improvement of nearby rustic advancement systems, make activity bunches for their execution and usage of developments, and so on

As a component of the "second column", nations have set least spending norms for every hub: 25% for the subsequent hub, 10% for the first and third, 5% for the LEADER program. Nearly the EU normal for proportions of the second pivot in 2007-2013. 46% of all expenses of the "second column" of the OSB will be dispensed.

The genuine cost structure, just as the strategies of the "second column" of the SWAps all in all, is determined in the public Rural Development Programs. Public projects are created based on the EU Common Trends in Rural Development and are executed on the standards of co-financing. For instance, costs for 2007-2013. Germany's public program will add up to 13 billion euros, of which 60% will be dispensed from the EU financial plan, and 40% from the financial plans of public and neighborhood specialists. In Ireland, over half of the expenses of the public program will be covered from EU assets, in Poland and Lithuania - practically 80%.


The budget of the OSB is formed as part of the total budget of the European Union, in the income of which the once-heavy revenue from customs duties and taxes on agri-food products does not exceed 10% now. In 2007 - 2013 total expenditures on SWAps will amount to 371 billion euros. It is planned that their share in the annual expenditures of the total budget of the Union will decrease during this time from 45 to 40%. Now the vast majority of the cost of the OSB falls on the first pillar. The share of the second support is 11%, although, according to some estimates, by 2013 it may increase to 20%. Until 2007, the first support was fully funded from the funds of the FEOGA Guarantee Section, and the second - 60% from the Guarantee Section and 40% from the Orientation Section. This created a dispersal of funds, complicating the financing procedures and their coordination.

Therefore, in 2005 FEOGA was divided into two specialized funds: the European Agricultural Guarantee Fund, which finances the first pillar of the SWAps, and the European Agricultural Fund for Rural Development, which finances the second pillar. It is expected that in 2013, overall funding for SWAps will be substantially reduced. However, there will be a further redistribution of funds from the first support to the second.

Prospects for OSB
They depend on how far the EU countries manage to harmonize their very different views on the role of this policy in the future socioeconomic development of the EU.

Differences on this issue almost disturbed the reception of the amplified EU spending program for 2007-2013. Some old part states, driven by the United Kingdom, deciphered the UCP as a "expensive relic" of the EU's development period, which doesn't find a way into the arrangement of its new needs with regards to globalization. They diligently proposed to cut the portion of the horticultural area in EU spending uses, rearranging assets for logical and specialized examination, schooling and the advancement of elective fuel sources. Different nations - drove by France - contended that the arrangements of the Rome Treaty on the points of interest of agribusiness and its exceptional part in the economy of the Community stayed important. As they would like to think, presently it is simply important to move the accentuation of the SCE - from supporting creation and controlling markets to multifunctional rustic turn of events. To decrease help to ranchers and debilitate their security from outside rivalry, they thought about unsatisfactory. This position was chiefly taken by the new EU individuals.

Because of the trade off, it was chosen to finish Fisher's change by 2013. In 2012, it is wanted to sum up its break results and investigate the chance of a critical modification of the SCE later on. This won't be simple, since the dismissal of fare sponsorships and the debilitating or withdrawal of homegrown help estimates will require a crucial change in the whole "engineering" of the SWAps. Thus, dairy portions have since quite a while ago abandoned a type of restricting creation into an autonomous monetary instrument. They can be rented, sold (for instance, upon retirement), get an advance from them at the bank. The nullification of these portions, planned for 2015, will hit ranchers, yet in addition the banks (and perhaps benefits assets) of various EU nations. It is as yet hard to survey the drawn out ramifications for the EU food independence of the boundless change to a solitary rural installment that doesn't animate the creation of explicit items. In 2007, controlling the development of agrarian creation against the scenery of the consumption of mediation saves without precedent for some years prompted a recognizable diminishing in such security and a sharp expansion in costs on the grain, meat and dairy markets of the EU (by 30% for pork, 40% for milk and 60% for corn).

France, the nation generally inspired by this strategy, chosen to lead the inescapable further change of the SCE. In September 2007, French President Nicolas Sarkozy declared the need to set up "another political system for European horticulture." He named the four fundamental destinations of the OSB in the 21st century: 1) guaranteeing EU independence in food and sanitation; 2) EU investment in keeping up balance in the worldwide food market; 3) adjusted improvement of country regions of the EU nations; 4) neutralizing environmental change and improving the climate. The primary concern in tackling these issues ought to remain the rule of need of items produced in the EU over merchandise of different makers.



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