Dutch agriculture is defined by small but incredibly efficient holdings

Although a transition from agriculture to industry and rural to urban might seem natural, it is in reality perilous and difficult. Both Karl Polanyi and Alexander Gerschenkron provide cautionary tales of the mismanagement of class decline. They demonstrate that the most fundamental potential consequences of poor class management are collapse of democratic regimes and the rise of authoritarian alternatives, accompanied by social unrest. Thus in the wake of a war that destroyed the continent and saw the rise of fascism in the heart of Europe, the post-war task of successfully managing the decline of the farmers was immensely important. The Common Agricultural Policy was the plan for navigating the peaceful transition from agriculture to industry without destroying democracy along the way. Along with these significant successes, however, came major costs and what proved to be systemic problems.Although the CAP brought many benefits to European farmers and society, its reliance on high prices generated several problems, starting with a growing imbalance between supply and demand. The introduction of the CAP coincided with a substantial leap forward in technical and scientific progress, such as improved chemical fertilizers and new farming equipment. These advances resulted in a dramatic increase in output. While the baby boom was in full swing when the CAP was being debated and designed, by the 1970s, population growth was slowing. The improved agricultural output quickly resolved the post-war food crisis and ensured that the vast majority of the population was well fed. Consequently, total food consumption remained steady while food output skyrocketed. Meanwhile, the CAP continued to incentivize production, yielding chronic surpluses for a growing number of products, including sugar, wheat, and milk. CAP rules required these surpluses to be purchased and stored at the European Community’s expense. Their disposal quickly became a serious problem. The products could not be sold on the Community market without depressing prices,bluebery pot size which would undermine the CAP’s goal of increasing farmer incomes.

One alternative, destroying surpluses, was politically unviable. The memory of starvation in Europe was still strong, and thus there was a powerful morally negative association attached to the destruction of food. Given these restrictions, the surpluses were disposed of in three main ways. One was to sell the products back to farmers at low prices. This option was primarily utilized with those goods that could serve as animal feed. To prevent farmers from reselling the bargain-priced feed for the higher guaranteed prices on the market, the surplus grains sold to farmers were “denatured” . A second option was to use export subsidies to sell the commodities purchased at intervention prices at the much lower world prices . The third option was to use the surpluses for food aid. Overall, surplus disposal was very expensive and quickly became one of the largest expenditures of the “Guarantee” portion of the EAGGF7 High CAP prices did not necessarily lift all farmers’ boats. On the contrary, the CAP created vast inequality among farmers, both across and within member states. With CAP support based on market intervention, the amount of support received was directly proportional to the amount of goods produced. Under this system, the larger, commodity producing farmers raced ahead, while the smaller and/or non-commodity producers made little gain. Larger farmers, who produced more, benefited the most. Moreover, the gap widened as they bought up available land and invested in the latest machinery to boost output. Meanwhile, subsistence farmers, many of whom still milked their cows by hand, continued to survive on the land, but lacked the means to modernize and expand. Essentially, the CAP served to modernize and improve the larger farms, but for the small family farms, it did little more than allow them to survive and did not improve small farmer incomes in a meaningful or sustainable way. This income problem, both within and across member states, has persisted to the present day and is an issue that current CAP reform is still struggling to address. High CAP prices also caused recurring budgetary crises as the EU was required to purchase and store or dump whatever was produced at prices that were inflated.

Indeed, these obligations consumed the budget, while other important CAP projects, such as modernization and rural development, were woefully underdeveloped and underfunded. The problems stemming from inflated prices were obvious very quickly, but became hard to change since farmers violently opposed price cuts. The budgetary crisis could be resolved in one of two ways: cutting prices or overhauling the fundamental operation of the CAP. The former solution ran contrary to the CAP’s use of inflated prices to improve incomes. In addition, as studies of social welfare state retrenchment reveal, it is exceptionally difficult to cut benefits once they have been extended. The second solution, to achieve paradigmatic reform by altering the core operation of the CAP, was highly controversial. Agricultural differences among the member states made it almost impossible to agree on any kind of significant CAP reform. CAP reform, whether in 1968 or in 2019, is defined by a lack of consensus. Member states are split on every issue from how farmers should be paid, to the methods for protecting the environment, to if such rules should even exist in the first place. While every member state plays an active part in CAP negotiations, there are four countries that tend to drive negotiations and dominate the narrative. In addition, these four countries, France, Germany, the Netherlands, and the United Kingdom, play a role akin to a coalition leader. The dividing line on most, but not all, issues tends to be drawn between the coalition led by the former two countries and that led by the latter two. Where these countries are positioned on any CAP issue is almost always driven by their agricultural production profile. French agriculture is diverse on all accounts. It includes the highly productive and the uncompetitive, the commodity producers and the specialty goods cultivators, and the large landholders and the small family farmers. Not all groups and preferences are equal, however, and the large landholding cereals producers tend to have more political influence than other farmers. Since the CAP was essentially France’s compensation for supporting German industry, France is typically the most ardent defender of the portions of the CAP committed to supporting and improving farmer incomes. Particularly in the early years of the CAP, these policies were how France forced other countries, most notably Germany, to pay for the modernization of French agriculture. France typically leads a coalition that seeks to preserve CAP support for farmers, to keep prices high, and to ensure compensation for any burdens or new standards imposed on farmers. Germany’s production profile and CAP preferences are best understood by dividing them temporally, pre and post-unification.

At the time the CAP was created, smaller, family-style farms predominated in West Germany. A notable exception, however, were the grain farmers in Bavaria. So, at the CAP’s creation and in its first decades, Germany preferred higher prices. At this time, high prices were a means for modernizing the sector and also for preventing its sudden and total collapse, with industrial jobs looking increasingly attractive in Germany. Indeed,raspberry container size the post-war recovery and modernization of its agricultural sector were particularly important. Around the time of reunification, however, Germany’s preferences began to shift and it has come to slightly prefer more financial discipline as the burden of its financial contribution to the EU has increased. Specifically, by the late 1980s, agriculture in the west had long since modernized. Now, Germany was confronted with the massive financial burden of absorbing the East, essentially a Soviet colony that lagged behind West Germany on every measure. Given the financial burden associated with reunification, Germany sought to contain expenditure as much as possible elsewhere. Essentially, Germany no longer wanted to pay to subsidize French farmers when it needed to modernize all aspects of society and the economy in half of its own country. Despite calling for financial discipline, however, Germany tends to oppose efforts to limit the amount an individual farmer can receive, given the internal structural diversity of its agriculture. Moreover, farms in the East tended to be large, and would be likely to be hit with the effects of any effort to cap incomes. One important similarity has persisted, pre and post-unification, which is that Germany is traditionally a strong supporting member of France’s coalition. Though it breaks with France from time to time, those moments are the exception and not the norm. The United Kingdom is home to some of the largest farms in the EU, with a mean holding size nearly six times the EU average. Until eastern enlargement in 2004 the UK had, on average, the largest farms with a mean holding size of 94 hectares compared to an EU average of 16.4 hectares . Though there is some diversity, the dominant production is in cereals and livestock-related goods. In addition, UK farmers tend to be efficient and competitive, even without price supports. The relative competitiveness of British farmers, coupled with the UK’s substantial financial contributions to the EU, is the major factor driving British attitudes toward the CAP. Although UK farmers are among the largest individual beneficiaries, the situation is spun as one where British government is paying to subsidize its own farmers’ competitors. For the UK, the preferred CAP outcome is to cut spending as much as possible, ideally eliminating income supports entirely. Indeed, the UK routinely favors cuts to prices and income supports. However, because its farms are so large, the UK also opposes any efforts to limit individual benefit levels.

If prices and income supports cannot be entirely removed, then the UK will see its farmers disproportionately bear the burden of income limits. In negotiations, then, the UK typically leads the price-cut coalition.Most production is concentrated in livestock and horticulture, as opposed to commodity products. In addition, the Netherlands places a particular emphasis on research and innovation in agriculture and agricultural technology. Indeed, the world’s leading agricultural research institute is located in Wageningen, the Netherlands. This commitment has allowed the Dutch to become one of Europe’s top agricultural-exporting countries despite having very little land available for agriculture. Dutch agriculture is also defined by a robust commitment to rigorous environmental standards, important in a densely populated country with limited arable land. The ideal CAP outcome for the Netherlands would include the elimination of any price supports and direct income payments so that the most competitive and efficient countries, like the Netherlands, would not be forced to subsidize those who are weaker. In addition, the Netherlands would prefer to see stronger environmental standards. It is typically part of a coalition led by the UK that seeks to cut spending on prices and income supports. These sharp and persistent divisions help explain why systemic reform is only possible under conditions of disruptive politics. Disruptive politics help reformers overcome these divisions among the member states. Challenges such as enlargement or trade negotiations can force member states to reevaluate their policy preferences and priorities. These additional pressures can also raise the stakes for reaching an agreement, incentivizing member states to find a compromise or to agree to a larger policy change than they otherwise normally would. For example, these external actors can threaten to impose change that is broadly disagreeable to agricultural interests. As disruptive politics makes member state divisions and preferences less rigid, paradigmatic reform becomes possible. When CAP reform is negotiated during politics as usual, as the following examples in this chapter will demonstrate, the fundamental divisions on core policies cannot be overcome. There is little incentive for member states to reevaluate their preferences. As a result, the policies that emerge from CAP reform initiatives tend to produce little meaningful change to the operation of core CAP programs. The policies and changes that do result in these situations are those that upset no one. They are often defined by lax rules, extensive exemptions, and/or their voluntary nature.