Changing Scene: EU Impact on the Rural Economy

Abstract

Rural affairs have played a very prominent role in the economic and cultural life of Northern Ireland. With the exception of the Greater Belfast and Derry areas the region remains almost entirely rural. Within the European Union agricultural and rural policies have been a cornerstone (some might say a millstone) in the development of common policy frameworks. The Common Agricultural Policy (CAP), including Structural Funds measures to promote rural development, remains by far the largest common policy programme in the EU: expenditure under CAP accounted for about 55 per cent of the total EU budget in 1996.1 Thus the CAP is a very important source of support for the region’s agricultural sector and rural society. It remains very much an agricultural support mechanism, indeed its primary goal in practice is to redistribute income in favour of farmers; over 90 per cent of CAP spending is for this purpose. The CAP has been rightly criticised for, among other things, the narrowness of its support and adverse distributional effects within agriculture, the large costs it imposes on EU consumers and taxpayers and for the price depressing effects it has had on the traditional markets of agricultural exporting nations such as New Zealand and Argentina.