Warwick lecturer says ‘Scrap the CAP’

Last Wednesday, Politics and International Studies (PAIS) lecturer Wyn Grant was invited by the Warwick Libertarian to share his views on the EU’s most controversial scheme – the Common Agricultural Policy (CAP).

Professor Grant joined the PAIS department in 1971 and was chair of department from 1990 to 1997. With his extensive knowledge on the CAP, he is an agricultural adviser to the EU and was once listed as one of Britain’s 500 most influential people in the Sunday Express on the ground of being “the only person in Britain who understands the CAP.” However, he later noted that there are in fact 6 people who understand the policy in Britain.

The speech began with a cost benefit account of the policy, which showed that the cost outweighs the benefits by far. The combined monetary expenditure of increased food prices and administrative cost yields a total burden of €100bn per year on the EU, which would be €950 per EU family per year excluding VAT charges. The environment is also under increasing strain as farmers get the incentive to overproduce.

On the other hand, the benefit of the scheme is mostly diverted to the big land owners who gain much from economies of scale, the bureaucracy who engulf much money in transaction costs, organised criminals (especially from Italy) who claim subsidies of imaginary land in the middle of the Atlantic, and above all, multinational companies who produce the agricultural inputs such as seeds and fertilizers.

While the CAP first exists to ensure national food security and to please the politically radical peasantry who composited 25% of the population back in the 1950s, the same set of objectives back in 1958 are still being used today. “If you look at the objectives of the CAP,” noted Professor Grant, “they were the one EU policy where there has never been any rewording of the treaty objectives since the Treaty of Rome in 1958.”

One of the most fundamental problems of the CAP suggested by Professor Grant is the continuously accumulating unwanted food stocks. Other than the well known terms of “grain mountains” and “wine lakes”, Professor Grant introduced the “aging butter” – a term to describe the deteriorated excess butter which was sold to the Soviet Union.

Professor Grant then offered a brief overview of the recent motivation for change that had provided significant incentive to the system. Issues such as the pressure on trade negotiations, coming mainly from the US and Australia, the prolonged burden on the EU budget and the new eastern question (Turkey will add an extra 20% to the budget) combined some powerful forces in pushing for some decent changes.

So how to dump the CAP? Ever since the initial attempt of the dairy quotas in 1984, the main emphasis on the reforms are mainly on various forms of quotas on specific industries and environmental incentives to all EU farmers. Professor Grant advocated more transparency in the budgeting process, especially in terms of the subsidies accounts, which he believes are currently ineffective in targeting the needed marginal small scale farmers.

But the future does not look bright. The CAP budget has been preserved for another 10 years in 2003, making short term change unviable. The Single Farm Payment system is still in the unquestioned “Green Box” of the WTO. The second pillar, environmental subsidies of the CAP has been recently drastically reduced under Tony Blair.

“Analysis of what was wrong in the CAP is easy,” concluded Professor Grant, “but providing a viable political strategy is hard.” He summed up the night by urging a coalition of states within the EU to push for a more fundamental reform, so that countries may produce according to their competitiveness and benefit under more effective targeting schemes.

Students responded positively to the speech and seemed to be supportive of the creation of the Warwick Libertarian. “There is definitely a need to promote civil liberty in this country,” Andrew Bradley, ex-President of the Warwick Lib-Dem noted, “because of the authoritarian streak in the government under the new Labour.”

Warwick Libertarian is a student group in the progress of becoming an official university society. They plan to appeal to existing libertarians on campus and promote libertarian values across all spectrum of the society. Warwick Libertarian also hopes to invite speakers such as Wyn Grant to discuss libertarian issues and engage in debates with other political societies.