France and Britain divided by CAP for 30 years

PARIS, June 16 (AFP) – Throughout the more than 30 years since Britain entered what was then the European Economic Community, the Common Agricultural Policy (CAP) has been a bone of contention between Paris and London.

The CAP goes back to 1962, five years after the Treaty of Rome that founded the then six-member (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) EEC and was the product of a deal between France and Germany.

Paris pulled down tariff barriers, allowing Germany’s renascent industry access to the French market, while the other five EEC members, and above all Germany, provided the funds to modernise the French agricultural sector, the biggest in Europe.

The aims were to feed Europe, which still remembered the privations of World War II days; to ensure that the EEC was self-sufficient in food production; and to guarantee a decent income for farmers.

The sectors thought at that time to be essential were dairy products, beef and cereals, all of which attracted major financial support.

One of the CAP’s essential elements was community preference. While trade barriers within the Six were dismantled, a common tariff was established in respect of imports, set at levels above world prices.

But to encourage sales of EEC farm products on world markets, European farmers were aided by export subsidies.

The opening of talks over British membership in the 1970s ran up against the problem of the CAP, which did not reflect British interests and accounted for 90 percent of community spending.

For Britain, which had a fairly small of number of people working on the land (about five percent at the time), the priority lay with obtaining a good deal for the consumer, not the producer.

It had every interest in buying food as cheaply as possible from whatever source. Under existing deals with Commonwealth countries such as New Zealand, for example, it could import butter and lamb at very favourable prices.

But France, in the person of then president Georges Pompidou, compelled then British prime minister Edward Heath to accept community preference as the price of entry for Britain, Ireland and Denmark, which was a major supplier of agricultural produce to Britain.

It did not take long for successive British governments to start arguing the case for CAP reform. They had two major problems: stocks of beef and butter piled up in cold stores across Europe, while Britain had to pay high prices for its food while making an ever greater contribution to the EEC budget.

Enter prime minister Margaret Thatcher, who pronounced at the November 1979 European summit in Dublin the famous phrase: “I want my money back.”

Five years later at the Fontainebleau summit of June 1984 she had her way, at least in part, when Britain won the famous rebate or, as the present British government prefers to call it, abatement on its contribution to the community budget.

It totals EUR 4.6 billion (USD 5.6 billion) a year.

The logic is that Britain gets little out of the CAP, unlike France, whose farmers pocket some EUR 10 billion (USD 12 billion) or about a quarter of the European farm budget.

Britain has waged a long battle to bring about a radical reform of the CAP, not without some success. Guaranteed prices for farmers, a French invention, have given way to the British-backed system of direct aid to producers.

All the same, the CAP continues to account for 43 percent of the European Union’s budget and dwarfs spending on structural funds aimed at helping economically underdeveloped regions.

Subject: French News