Explaining the ‘Health Check’ of the Common Agricultural Policy: budgetary politics, globalisation and paradigm change revisited

Abstract

Three potential explanations of past reforms of the Common Agricultural Policy (CAP) can be identified in the literature: a budget constraint, pressure from General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) negotiations or commitments and a paradigm shift emphasising agriculture's provision of public goods. This discussion on the driving forces of CAP reform links to broader theoretical questions on the role of budgetary politics, globalisation of public policy and paradigm shift in explaining policy change. In this article, the Health Check reforms of 2007/2008 are assessed. They were probably more ambitious than first supposed, although it was a watered-down package agreed by ministers in November 2008. We conclude that the Health Check was not primarily driven by budget concerns or by the supposed switch from the state-assisted to the multifunctional policy paradigm. The European Commission's wish to adopt an offensive negotiating stance in the closing phases of the Doha Round was a more likely explanatory factor. The shape and purpose of the CAP post-2013 is contested with divergent views among the Member States.

Keywords:

• Health Check
• CAP reform
• WTO
• Doha
• budgetary politics
• globalisation
• paradigm change
• multifunctionality

Acknowledgements

Earlier versions of this paper have been presented at the 109th EAAE Seminar, Viterbo, Italy, 20–21 November 2008 and the IPSA Twenty-first World Congress of Political Science, 12–16 July 2009, Santiago, Chile. We would in particular like to thank Wyn Grant and the Editor of Policy Studies for helpful comments.

Notes

1. Swinnen (2008, p. 162), however, characterises the circumstances surrounding the Fischler reform as a ‘perfect storm’ in which a unique combination of factors overcame opposition to reform.

2. Official Journal of the European Union, L270, 21 October 2003.

3. Corrado Pirzio-Biroli (2008, p. 106), Chief of Staff in Fischler's cabinet, implies that the Fischler reforms were, in part, designed to outflank the Commission President's preference for a 30% cut in the CAP budget in the 2007–2013 Financial Perspective.

4. With much weaker world market prices, however, the ‘old’ CAP support mechanisms subsequently kicked back into life. Three-hundred thousand tonnes of grain (nearly all maize) were offered to intervention between 29 December 2008 and 4 January 2009, bringing the EU close to its self-imposed ceiling on maize intervention; and export subsidies on milk products were reintroduced in January 2009 (Agra Europe, 9 January 2009, EP/4; and 23 January 2009, EP/2).

5. However, potential problems remain because the SPS is an annual payment, to farmers, who have land at their disposal in ‘agricultural’ production, and cross-compliance applies.

6. The world commodity price boom did of course impact farm costs as well as revenues (fuel, fertilisers, animal feed, etc.), and not all farms were in a position to sell at the price spikes, and so the impact on farm incomes was uneven with some farms failing to benefit from the price boom. Similarly, these other costs (tinplate, fuel, etc.) are reflected in retail food prices; but the extent of food price inflation has generated new concerns, and led the Commission to establish a task force ‘to examine the functioning of the food supply chain’ (Commission of the European Communities 2008b, p. 10).