The reforms of the Common Agricultural Policy - an overview

Corn field near Judenburg
Photo: BMLRT / Alexander Haiden

The Common Agricultural Policy is one of the oldest and most significant policy areas of the European Union (EU). After the signing of the Treaty of Rome in 1957, the communitised agricultural policy came into force in 1962 and has since then stood for long-term food security in the EU.

From its inception, the EU institutions have continuously developed the Common Agricultural Policy and adapted it to new challenges through a series of reforms, ranging from adaptations to fundamental reorientations.

The 1992 reform – McSharry reform

The CAP reform in 1992 led to a major change in the communitised agricultural policy. The system of income support via guaranteed prices was replaced by a system of supplemental income support. Direct payments, accompanying set-aside, environmental programmes and diversification were introduced.

The Agenda 2000

Due to a possible imminent enlargement of the EU to include countries from Eastern and Central Europe, there were fears of production surpluses known from the past and an explosion of expenditure in agricultural policy. At the European Conference on Rural Development held in November 1996, the Cork Declaration laid down the strengthening of rural development policy in a ten-point programme. In December 1997, the European Council set the strategic objective of the Agenda 2000 to create a multifunctional, sustainable and competitive agricultural sector covering the whole European area. In March 1999, the European Council agreed on the direction of Agenda 2000. This reform introduced the concept of sustainability and the two-pillar structure of the CAP that is still valid today.

The reform of June 2003

The introduction of the Single Farm Payment the 2003 CAP reform, which was originally intended as a mid-term review to analyse the results of Agenda 2000 and to discuss further reform steps, brought a completely new direct payment scheme decoupled from production. Another innovation concerned cross-compliance. For the first time, direct payments were linked to compliance with obligations from other areas. This concerned environmental protection, food safety, animal welfare as well as human, animal and plant health.

Health Check 2008

In principle, the “Health Check” was adopted in 2008 as a further development of the 2003 CAP reform. In terms of content, climate change, water management and bioenergy in particular became increasingly important topics of agricultural policy. The Health Check was the basis for the CAP Reform 2014 - 2020.

The reform of the Common Agricultural Policy 2014 – 2020

With the introduction of the instrument of greening, the reform of the CAP by 2020 led to a new orientation of the direct payment scheme. For the first time 30 percent of the direct payments in the first pillar of the CAP were granted exclusively for certain environmental services. The “small farmers scheme” offered a simplified subsidisation scheme for farmers. In the second pillar of the CAP, rural development, the focus was on resource, environmental and climate protection, which in Austria were primarily implemented via the Agri-environmental Programme, ÖPUL. The ÖPUL programme, which was already created in 1995, is still an attractive core element of Austria’s agricultural policy today, which promotes environmentally sound, extensive and natural resource-saving land management and animal-friendly forms of husbandry in a comprehensive approach. The roll-out of broadband services and the development of tourist offers show that measures from non-agricultural areas have increasingly found access to the rural development policy area.

In Austria...

The Common Agricultural Policy and its respective reforms became directly binding for Austria after its accession to the EU in 1995. Beginning with the influence of the McSharry reform, Austria’s agricultural sector adjusted to the changes and reforms of the CAP and thus developed further overall due to new agricultural policy objectives. Austria has so far mastered the challenges in the agricultural sector very well. The structural change in agriculture has visibly slowed down. Being a small Member State, Austria benefits in particular from the communitised policy because, alone, it would probably not be able to cope with international pressure to the present extent. With this in mind, Austria has always actively participated in the shaping and reform of the CAP and plans to continue doing so within the framework of the current CAP reform after 2020 (cf. EU Agricultural Policy 21-27.