The common agricultural policy intrigues those who take an interest in European integration, both because of its advance on other common policies and because of its complexity. The resources in its grasp represent nearly 40% of the Union budget [see section 3.4]; the instruments that it applies are extremely varied and the terms that it uses to describe them would appear to be chosen precisely to prevent outsiders from understanding what they are. A close look, however, reveals that the complexity of the agricultural policy is due first and foremost to the variety of natural and economic situations which exist, the first relating to production and marketing conditions for different products, the second to the fact that the fifteen Member States have different structures and different climatic conditions.
Despite its complexity, the CAP has more than achieved its objectives. Customs duties, quantitative restrictions and measures having equivalent effect have been relegated to the dustbin of history and trade between the Member States has been fully liberalised. The single agricultural market signifies that a good originating in one Member State can be stored in another and marketed in a third. It can also be exported to third countries from any Member State. The merchandise of third countries gains entry to the common market by crossing just one of the Member States' borders. This liberalisation has led to considerable growth in the range of agricultural products and foodstuffs available to consumers.
In addition, the common market organisation has buffered the European agricultural market against major fluctuations on the world market. In normal times, it has provided market stability through a policy of staggering supply (storage, monthly increases), of surplus disposal (refunds, denaturing) or of diversifying supply (imports from third countries, export levies). In times of crisis, it has resorted to drastic measures ranging from import or export bans to the withdrawal from the market of part of production or even the reduction of production factors.
Market stabilisation is not an end in itself. It is a path to the other objectives of the common agricultural policy, notably that of food supply security. Thanks to the CAP, the European Union has been spared any serious food shortages, which would have jeopardised both the common agricultural policy and European integration itself. Comparison of the abundance of foodstuffs in Western Europe with the shortages in Eastern Europe, before and after the fall of communist regimes, is a sufficient gauge of the CAP's success. An additional and not less important one, is the independence of Western Europe in foodstuffs, which should be compared to its dependence on imported energy, namely oil [see section 19.1.1]. The price of the EC/EU's independence in foodstuffs has not been too high to pay. It goes without saying that the level of common prices corresponds to Europe's industrial and social development level. These prices are naturally enough not below those of the world market, but they are not much above them either.
In fact, agricultural markets are increasingly operating in economic globalisation. Successive reforms of the CAP have enhanced its market orientation, reduced the number of supply management measures and made EU farmers more responsive to price developments. It is important to continue to improve the market orientation of agriculture and thus enable EU farmers to better respond to market signals, while ensuring fair competition and fostering sustainable agriculture across the EU and ensuring an adequate food supply. There is a need to pursue work on innovation, research and development of agricultural production, notably to enhance its energy efficiency, productivity growth and ability to adapt to climate change. It is particularly important to ensure the sustainability of bio-fuel policies, by setting sustainability criteria for the production of first-generation bio-fuels and by encouraging the development of the second-generation bio-fuels made from by-products.
The so-called "European model of agriculture" aims at a sustainable development of rural areas through a diversified and multifunctional agriculture. The new CAP is based on two elements: lowering institutional prices for key products and offsetting the impact of these cuts on producer incomes by means of direct payments. While improving competitiveness of European agricultural products at world level, the successive CAP reforms have consolidated the foundations for a diversified and multifunctional agriculture contributing to sustainable development. The production of renewable raw materials and high quality food products, the protection of the environment and the maintenance of the vitality of rural regions and the countryside are considered services to the society, which have to be rewarded to ensure that they continue to be available in future.
Farmers in Europe are a special socio-economic category that other Europeans value, as the roots of their millenary traditions and cultures. The number of farmers in Europe is already so low that a further decrease would be catastrophic for cultivations, rural areas, landscapes and even the European traditions which farmers preserve. The agri-environmental arrangements incorporated into the common market organisations and the aid schemes for rural development open up a new future for farmers alongside their traditional role, as guardians of the environment and of Europe's rural heritage. In a Europe where urbanisation is proceeding apace, this new role may be as vital for city-dwellers in need of calm and a breath of fresh air as the food produced by farmers. City-dwellers should acknowledge that rural areas, with their products, their traditions, their landscapes and their calm, are preserving their own standards of living. It is therefore only just that these city-dwellers, as taxpayers, also contribute to the upkeep of the green areas which surround their cities. This approach signifies that farmers are rewarded not only for what they produce but also for their general contribution to society.