Economic Reasons for Continuing EU Agriculture Support - Essay Example

ARE THERE ANY ECONOMIC REASONS FOR CONTINUING EU AGRICULTURE SUPPORT AS OPPOSED TO LEAVING AGRICULTURE TO THE MERCY OF MARKET FORCES? By Instructor Institution Location Date Introduction The European agricultural policy has a long history that is useful in understanding its current setting. A critical period of the policy was in the 1870s and 80s when European countries reacted uniquely to competition resulting from transportation techniques. Currently, the EU has a common agricultural policy that is designed to support farming, provide food security and promote balanced development (Baldwin & Wyplosz, 2012, p. 421). Ideally, over 77% of its territory is rural and home to over half of the population. Farming is intensive, organic, and conventional and is expected to grow extensively with the addition of new member countries from the Eastern and Central Europe. The EU supports a particular model of agriculture that meets the food concerns of its citizens, safeguards the environment, and allows farmers to live decently. The essay discusses possible economic reasons of continued EU agricultural support as opposed to leaving agriculture to the mercy of market forces. The EU plays a critical role in ensuring adequate food supply within Europe. Without food security, Europe would be dangerously dependent on the fluctuating rate of imports(Baldwin & Wyplosz, 2012, p. 422). The agricultural sector needs the stability provided by the CAP in order to ensure maximum production of food reserves. If left to the market forces, farmers would not find it easy investing in the improvements towards productivity, environmental protection and food safety(El-Agraa, 2011, p. 290). The Common Agricultural Policy ensures the Europeans have a stable supply of food at reasonable prices. With the ever increasing impact of global warming on the quantity of harvests, it is important to protect the local food supplies. Without the support of the Common Agricultural Policy, all the 27 EU nations would have developed their competing support systems, creating a chaotic single market(Nello, 2011, p. 368). The EU works towards protecting the rural communities that are constantly under threat. The average farmers’ income is only half the average wage of the EU. It is no surprise that the rate of agricultural employment fell by about 25 percent over the last decade(Dearden, 2005, p. 86). About 60% of the EU population live in the countryside and cover 90% of the Union’s territory. The countryside is one of the greatest interests of the EU since farmers need help in protecting the environment, as well as their way of life. Currently, the CAP offers adequate training to farmers, and assistance to new farmers starting up(Pelkmans, 2006, p. 327). Their subventions are increasingly being oriented towards rural development. Europe has the best food supplies in the world, and the EU aims at promoting quality and diversity. For instance, the Common Agricultural Policy protects 750 traditional foods and over 2,000 wines and spirits. The protected foods range from Azores pineapples and Newmarket sausages to Beaujolais and Rioja(Artis & Nixson, 2007, p. 138). Without the CAP, food delights would be under threat and Europe would possibly be languishing under bland processed foods from factory farms in the US. Recent reforms in the EU ensure the CAP promotes food safety and enhances the development of more organic produce. Some critics think the production of surplus food reserves leads to excessive food reserves that are either destroyed or dumped. Instead, they rally for a free market with the thinking that this would promote efficient allocation of food resources. The CAP is increasingly pulling its efforts towards protecting the rural environment. Farmers get more benefits by signing to the agro-environment commitments. Such commitments involve the use of fewer chemicals, maintaining trees, ponds, and hedges, leaving uncultivated boundaries and protecting wildlife. Food surpluses provided by the EU help the developing countries by providing a cheap and reliable source of food((2013), 2013, p. 2). It is absurd to think that there are some personal economic gains in enhancing EU agricultural support. In fact, the EU remains to be the biggest importer of food in the world, utilizing over €65 billion each year. Furthermore, Europe imports more food from developing countries than Canada, United States, Japan, New Zealand and Australia imports put together. The common agricultural policy also ensures that the EU is the second largest exporter of food in the world. Economic conditions have changed drastically within the agricultural sector, since the World War II period. The EU encourages agricultural support due to the need for reconstruction and general economic growth. Thus, technical progress is promoted; agricultural production encouraged and credit developed. Labor demands in the sector and other related industries have accelerated the movement of people out of agriculture, and this is supported by different structural policies. The new policies stimulate more farm surplus and have resulted in the expansion of the domestic markets(Tangermann, 2013, p. 162). Also, the EU deems it necessary to protect farmers from market instability and the general tendency of over-supply. Its majorrole is not to restore free international trade for all agricultural products but to boost the domestic market economically and empower farmers to take more roles in building the agricultural sector. Conclusion The primary objective of the EU is to achieve the union of Europeans, improve their standard of living and promote accelerated development of all the poor regions. The EU agricultural policy aims at increasing agricultural productivity and promoting the optimal use of labor and resources. It stabilizes markets and ensures the farming population leads an equitable standard of life due to the increase in income from agricultural produce. Also, the policy guarantees the security of supply from the farmers and ensures reasonable prices are set to the consumers. The Common Agricultural Policy has had more influence in other sectors apart from agriculture. It’s hard to measure some of the benefits achieved by the EU in integrating agriculture and promoting food security. Nonetheless, it is important to understand that the agricultural policy keeps becoming complicated due to the development of new goals and values within the industry. Bibliography (2013), E. U., 2013. Overview of CAP Reform 2014-2020. [Online] Available at: http://ec.europa.eu/agriculture/policy-perspectives/policy-briefs/05_en.pdf [Accessed 24 February 2015]. Artis, M. & Nixson, F., 2007. The Economics of the European Union. 4th ed. Chicago: Oxford University Press. Baldwin, R. & Wyplosz, M., 2012. The Economics of European Integration. 4th ed. NY: McGraw-Hill. Dearden, F. M. S., 2005. European Economic Intergration. 4th ed. New York: Financial Times/Prentice Hall. El-Agraa, A., 2011. The European Union: Economics and Policies. 9th ed. Cambridge: Cambridge University Press. Nello, S., 2011. The European Union: Economics, Politics and History. 3rd ed. NY: McGraw-Hill. Pelkmans, J., 2006. European Integration: Methods and Economic Analysis. 3rd ed. Netherlands: Pearson. Tangermann, S., 2013. The EU CAP Reform: Implications for Doha Negotiations, International Centre for Trade and Sustainable Development. [Online] Available at: http://www.ictsd.org/downloads/2014/07/part2-8.pdf [Accessed 24 February 2015]. Read More