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21.4.  The common market organisation of the CAP

  1. The principles of the CAP
  2. Direct support schemes for European farmers
  3. Quality of European agricultural products
  4. External wing of the CAP

The operation and development of the common market for agricultural products is accompanied by the establishment of common market organisations (CMOs) which may, according to Article 40 of the Treaty on the functioning of the EU, take various forms depending on the product. At present, almost all the Community's agricultural production is regulated by common organisations. Article 38 of the TFEU (ex-Article 32 TEC) defines agricultural products as products of the soil, stockfarming and of fisheries, along with products of first-stage processing which are directly related to these products. Foodstuffs are considered as products of second-stage processing and are therefore not included in agricultural products. To make matters as clear as possible, products covered by the provisions under the heading "agriculture" are listed in Annex I of the TFEU. This is why, in European Community/Union terminology, agricultural arrangements are often stated as being applicable to "Annex I products".

Since the introduction of the CAP, the Council had adopted 21 CMOs for each product or group of products, each governed by a separate Council basic regulation, often accompanied by a collateral set of further Council regulations. The market organisation of each agricultural product used different mechanisms defined by its basic regulation and adopted by the Council using the full-blown procedure [see section 21.3.2], but all of them were underpinned by, on the one hand, internal market measures, more often than not relating to price setting and support, and, on the other, by a trade regime with third countries, which was in conformity with the Agreement on agriculture concluded in the context of the GATT Uruguay Round [see section 23.4].

Pursuing the aim of simplifying the regulatory environment of the CAP, a single Regulation establishes nowadays a common organisation of the markets for agricultural products (Single CMO Regulation), which means all the products listed in Annex I to the Treaties (TEU and TFEU) with the exception of the fishery and aquaculture products as defined in Union legislative acts on the common organisation of the markets in fishery and aquaculture products [Regulation 1308/2013, last amended by Regulation 2017/1183]. This Regulation contains all the basic elements of the common organisation of the markets in agricultural products. It aims to streamline, expand and simplify the provisions on public intervention, private storage, exceptional measures and aid to specific sectors, as well as to facilitate cooperation through producer and interbranch organisations. The Single CMO Regulation establishes common rules concerning marketing periods, public intervention, private storage, reference prices, intervention prices and disposal of products bought under intervention.

The provisions adopted pursuant to the Regulation on the financing, management and monitoring of the common agricultural policy [see sections 21.3.3 and 21.3.4] apply to the measures set out in the Single CMO Regulation, including checks and the application of administrative measures and administrative penalties in case of non-compliance, and rules related to the lodging and releasing of securities and the recovery of undue payments.

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