The 2003 CAP reform altered the basis of direct aid to producers, paid to farmers or producers' associations, progressively phasing it out and decoupling it from production [see section 21.4.3]. This decoupling, which began on 1 January 2005 for most Common Market Organisations (CMOs), separates grants received from production. The vast majority of subsidies is henceforth paid independently from the volume of production. To avoid abandonment of production, Member States may choose to maintain a limited link between subsidy and production under well defined conditions and within clear limits. These new "single farm payments" are linked to the respect of environmental, food safety and animal welfare standards. Severing the link between subsidies and production is intended to make EU farmers more competitive and market orientated, while providing the necessary income stability. More money will be available to farmers for environmental, quality or animal welfare programmes by reducing direct payments for bigger farms.
The key elements of the reformed CAP are:
- the ''single farm payment'' for EU farmers is independent from production and is linked to the respect of environmental, food safety, animal and plant health and animal welfare standards, as well as the requirement to keep all farmland in good agricultural and environmental condition ("cross-compliance"),
- limited coupled elements are intended to avoid abandonment of production,
- a strengthened rural development policy with new measures is intended to promote the environment, quality and animal welfare and to help farmers to meet EU production standards,
- a reduction in direct payments ("modulation") for bigger farms helps to finance the new rural development policy,
- a mechanism for financial discipline aims to ensure that the farm budget fixed until 2013 is not overshot.
Connected with the question of agricultural grants is the question of the quality of agricultural products and foodstuffs. The quality and characteristics of these products are often linked to their geographical origin. Two EU Regulations were designed to raise consumer awareness of the producers' efforts to improve the quality of their products. Regulation 510/2006 established a European system for the protection of geographical indications (PGI) and designations of origin (PDO) for agricultural products and foodstuffs [Regulation 510/2006, replaced by Regulation 1151/2012], supplemented by lists of some 480 names of agricultural and food products drawn up by the Commission [Regulation 1107/96]. It spelled out with what requirements a product or foodstuff should comply in order to qualify for a protected designation of origin (PDO) or for a protected geographical indication (PGI). Regulation 509/2006 laid down the rules under which an agricultural product or foodstuff may be recognised and registered as traditional speciality guaranteed [Regulation 509/2006, replaced by Regulation 1151/2012]. It introduced an instrument for registering the names of products, thus enabling producers who so wish to obtain certificates of the 'specific character' of a traditional product (or foodstuff), the specific character being defined as the feature which distinguishes the product or foodstuff clearly from other similar products or foodstuffs belonging to the same category.
In 2012, Regulations 509/2006 and 510/2006 were repealed and replaced by a Regulation on quality schemes for agricultural products and foodstuffs [Regulation 1151/2012]. This Regulation establishes quality schemes which provide the basis for the identification and, where appropriate, protection of names and terms that, in particular, indicate or describe agricultural products with: (a) value-adding characteristics; or (b) value-adding attributes as a result of the farming or processing methods used in their production, or of the place of their production or marketing. This Regulation aims to help producers of agricultural products and foodstuffs to communicate the product characteristics and farming attributes of those products and foodstuffs to buyers and consumers, thereby ensuring: (a) fair competition for farmers and producers of agricultural products and foodstuffs having value-adding characteristics and attributes; (b) the availability to consumers of reliable information pertaining to such products; (c) respect for intellectual property rights; and (d) the integrity of the internal market.
A specific Regulation lays down rules on the definition, description, presentation and labelling of spirit drinks as well as on the protection of geographical indications of spirit drinks [Regulation 110/2008]. Another Regulation concerns organic production of agricultural products and indications referring thereto (labelling) on agricultural products and foodstuffs [Regulation 834/2007]. It provides the basis for the sustainable development of organic production while ensuring the effective functioning of the internal market, guaranteeing fair competition, ensuring consumer confidence and protecting consumer interests. A European Union symbol (logo), based on the 12 stars symbol of the EU, identifies agricultural products and foodstuffs whose names are registered under the rules on the protection of geographical indications and designations of origin [Regulation 510/2006, replaced by Regulation 1151/2012].
A new subject of concern for the common agricultural policy is biotechnology and genetically modified organisms (GMOs). The European Union is aware that the new technologies have great potential for reducing the cost of feedingstuffs and even for improving the quality of foodstuffs, but it is also mindful of certain risks that have to be carefully examined. It therefore follows the precautionary principle, concerning notably the traceability and labelling of GMOs and products produced from GMOs [Regulation 1830/2003, see section 11.2], and defends it on the international stage. This policy is denounced by external competitors as protectionist and leads to fierce battles inside the World Trade Organisation. The EU claims that the precautionary policy is not intended to protect the incomes of its farmers but the health of its citizens. Indeed, in recent years the EU has constantly refined its standards in the areas of food safety, quality, and environmental and animal protection. This has led to higher costs for European farmers and harmed their competitiveness. Rather than protecting European farmers' interests, the precautionary principle seems, therefore, to be very demanding on them as well as on their external competitors. After all, consumers have the right to decide whether they should eat uncertain foodstuffs at lower prices or high quality products at higher prices.
The European Union finances specific veterinary measures, inspection measures in the veterinary field and programmes for the eradication and monitoring of animal diseases [Decision 2009/470]. Intervention measures may be specific to a certain market organisation, in order to face particular problems. Thus, in order to face the consequences of the mad cow disease (Bovine spongiform encephalopathy -BSE), in addition to veterinary measures [see section 5.1.3], measures were taken in order to limit the negative consequences of banning beef exports from the United Kingdom to third countries [Regulation 716/96]. To increase consumer protection by improving information on the origin of meat, the Council established a system for the identification and registration of bovine animals, involving, in particular, the provision of a passport for each animal, the creation of a computerised database in each Member State and the labelling of beef and veal and of products derived from them [Regulation 1760/2000]. The EAGGF helped farmers affected by the crisis [Regulation 1357/96].
The EU finances also generic, collective information and promotion measures (public relations, publicity and dissemination of scientific information) on agricultural products carried out on the internal market or in third countries [Regulation 3/2008]. Although these measures are not brand-oriented or encourage the consumption of any product on grounds of its specific origins, they draw attention to intrinsic features and advantages of European products, notably the quality and safety of food, specific production methods, nutritional and health aspects, labelling, animal welfare and respect for the environment.
In the context of various food aid programmes, large quantities of food from intervention stocks are supplied both to designated organisations for distribution to the most deprived persons in the Union [Regulation 807/2010] and to the undernourished populations of numerous countries in the world [Regulation 1905/2006, last amended by Regulation 1341/2011, see section 24.7].