This CAP no longer fits the reality of farmers' lives
Published 09/09/2015 | 02:30
Within the European Union just under €60bn is spent annually supporting farmers, yet we are in the midst of an income crisis in many agricultural sectors.
Low farm incomes and the current wave of protests across Europe highlights the failure of the CAP to achieve one of its central aims - supporting farm incomes.
Over the last 20 years the CAP has been continually reformed. These reforms have addressed many of the economic problems associated with the 'old' CAP, such as butter mountains and wine lakes, but have failed to tackle one of the biggest issues in agriculture - income instability caused by price or yield variability.
It's not just an EU issue.
Farm incomes in the US are predicted to fall by 36pc this year, admittedly from a historically high level, and incomes of farmers right across the globe have been suffering. This raises at least two big questions. Should governments intervene to address what some argue to be simply a result of a global oversupply problem and what shape should intervention take?
Across Europe the range of protests that are occurring at Government and EU institutions clearly indicate that farmers are demanding action by governments.
However, this is not the case everywhere. For example, recently in New Zealand the head of the main farmers' union is reported as saying that there is no crisis, that the banks understand the situation and will support farm businesses and that the only role for government is to reduce the regulatory burden on farms.
Along similar non-intervention lines, one view is that in the dairy sector at least, Ireland should not be demanding that the EU raise intervention prices as this will only benefit higher cost producers in other parts of Europe.