The question of subsidies for European agriculture has been a hot issue for some time now. It’s well known that the budget structure of the Common Agricultural Policy (CAP) was a “historical relict”: the CAP was born just as the European Community (EC) had emerged from over a decade of severe food shortages during and after World War II, facing the urgent need to secure enough food for the European population. Leaving old memories behind, in the last years the CAP has mainly been criticized on the grounds of its cost – around 40 percent of the total European budget – and its environmental impact.
Every generation has its challenges, and for European youth, shortage of food definitely isn’t one of them – but the lack of jobs is. It is therefore legitimate to ask: Should the EU give the money directly to youth policies and stop financing farmers, fields, and products of agriculture? The Greeks I talked to persuaded me that this is a false dichotomy, even though in 2013 the country had one of the highest unemployment rates in Europe.
Possibilities for young people
Grigoris Stamoulis, 30, a Greek resident whose family business has profited from agricultural subsidies for many years, is convinced that “opposing the CAP to youngsters isn’t good. One policy should not exclude the other.” He continues: “What would have happened without farm subsidies? If the sector weren’t subsidized, production costs and, eventually, product prices would increase.”
Demetris Iatrides, Special Secretary to the Greek Ministry of Agriculture, states that Greek youth is actually enhanced through the CAP, as Pillar II (rural development, whereas Pillar I is about production support) gives young people the possibility to receive up to 20,000 Euros for starting their own agricultural activities. Later, a young farmer gets the chance to become an investor. For Iatrides, the situation is not black or white, as the CAP has already helped massively in rural development. For the future, he sees exciting opportunities: “There is the trend to help investments and give opportunities to entrepreneurs. Statistically, the beneficiaries are young people. There will be a revolution in the agricultural sector.”
However, the management – or rather the mismanagement – of the CAP has, in the past, raised serious objections. Farmers were paid to produce goods for which there was no market, resulting in the famous butter mountains, tons of unwanted sugar, and lakes of milk and wine which the Commission had to buy back. In addition, the national administrative complexity invited fraud. Entrepreneur Kyriakos Stamoulis, Grigori’s older brother, says: “If all these years’ subsidies had been distributed in the right way, today we would have better products and better production, and maybe we wouldn’t need any subsidies at all. It wouldn’t just be profitable for the producer, but for the whole state economy.” But “fortunately, in the new provisions for 2014 to 2020, there are many green ‘factors’ concerning the environment and, the provisions include studies of allowance use.”
The CAP is not just one policy
For years, Vaggelis Divaris has been a European Commission CAP officer based in Brussels, and looking back, he acknowledges that “unfortunately, up to now, we have created the ‘agriculture of the armchair’. Actually, we paid the people not to come to the city.” That may sound like mayhem – but on the other hand, it is now compatible with the scope of Pillar II, which definitely seeks rural development… with young people. “There is always room for improvement as there is for criticism,” Divaris continues. His main point is that we shouldn’t forget that CAP works. It’s the how that needs exploration.
Actually, the CAP has always been a central element in the continent’s growth, and not unfairly. The CAP is not just one policy, but a policy that includes others. Traditionally, the CAP was conceived for producing cheap products: not just any food products, but those which can be found on everybody’s table, full stop. What probably isn’t evident is that money for the CAP is also money for environmental protection, sustainable rural development. Most importantly, it’s money to boost incentives, tools, and paths to secure – a priori – the way people will make use of the environment, and not just a policy providing funds for a posteriori reparation. It is the main tool of redistribution of resources from European cities to European rural areas. The citizens of the European countryside are the ones who take care of our forests and of the sea, rivers, and lakes that provide us with food, water, and clean air.
Revisiting the basic principle and objectives in the Treaty of Rome, the CAP was intended to increase productivity by promoting technical progress and ensuring the optimum use of the factors of production, in particular labor (protection of social cohesion within EU); to ensure a fair standard of living for the agricultural community; to stabilize markets; and to secure availability of supplies and provide consumers with food at reasonable prices. Those objectives were written in 1958 and have never been amended. Which ones would you check off as “done”? Add to those: the protection of the environment; sustainable management of natural resources; combating climate change; opening the way for further investments; incentives to young people not to abandon the European countryside, to secure a balanced territorial development.
Innovative agricultural start-ups
Let us think about one of the buzzwords of our time: start-ups! It is time to think seriously about the potential of agricultural start-ups. According to the European Commission, “the second pillar, which enhances competitiveness at farm level, includes restructuring and modernization measures as well as start-up aid for young farmers.”
Furthermore, “there is a focus on bridging the gap between science and practice via the Farm Advisory System, as well as training and innovation programs. These instruments are aimed at helping the farm sector adapt to new trends and technologies, thus becoming more resource efficient, cost effective and capable of adapting to emerging challenges.”
Can the CAP indeed release reservoirs of creativity? Our world is a technological one, and it is faced with an aging farming population (only 14 per cent of EU farmers are younger than 40). From 2015 on, all young farmers entering the sector will have the opportunity to get an additional first pillar payment, which can be complemented by start-up aid under the second pillar. Seen in this light, the new CAP can push young people away from their parents’ homes, indeed, much further, to another city or village where they have the chance to start an innovative agricultural start-up. We are urgently waiting for someone to disrupt the sector!