Abstract
The purpose of this paper is to review the history of the Common Agricultural Policy (CAP) reform, and then to examine the mid-term review (MTR) of Agenda 2000, which was published in July 2002 by European Commission as a part of the 1999 reforms.The objectives of the CAP were set up in the Treaty of Rome, Article 39 and the policy has been operated under Stresa principles: a single product market, so-called Community preference, and financial solidarity among the Member States.These objectives of the CAP have not been revised since they were set out in the Treaty of Rome, while the European Treaty has revised the Treaty of Rome, the Maastrich treaty, the Amsterdam Treaty and the Nice Treaty. This reflects the fact that these objectives have been accepted while the operation of the CAP has posed many problems and has been begging for reform since early 70s.In the long history of reforms, the agreement on the MacSharry reforms of the CAP in 1992, implemented from 1993, marked the beginning of a new phase. Its basic aim was to decouple the income problem of EU agriculture from price policy which would be more oriented towards the efficient functioning of the agricultural market.An agreement was reached on Agenda 2000 at the Berlin European Council in March 1999. Agenda 2000 explicitly established economic, social, and environmental goals within a new reformulated set of objectives for the CAP. But indeed, seldom has a Commission proposal come through such a long and difficult negotiating process and remained so intact as these proposals on CAP reform. At that time the Commission severely miscalculated both the timing of its new attempt at CAP reform and the forces it could use. Then the Commission scheduled to review it again in detail in 2002.In July 2002 the new round of debate on CAP reform, the mid-term review (MTR) of the Agenda 2000, was launched by the EU farm Commissioner Franz Fischler. The first task of MTR is a stocktaking and improvement of the Agenda 2000 reform process.The basic and main proposal of MTR is decoupling of direct aids and establishment of a farm income payment. This payment will be based on historical payment adjusted to take into account the full implementation of Agenda 2000. In my paper, the basic idea of decoupling direct aids payment from production is criticized in that its outcome may be not decoupled, since the base their distribution upon historic yields and production entitlements.On the other hand, MTR instructed Member States to introduce an element of cross-compliance into farm policies, so that a farmer's direct aid payment would be paid in full if certain environmental criteria had been fulfilled. This means that the EU will want also to secure and maintain the Peace Clause on the next WTO round.In my perspective of the CAP reform thus far, EU has to apply the principle of subsidiarity to reforming process of the CAP more practically as it's political economics.
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