The Performance of British Agriculture and the Impact of the Common Agricultural Policy: An Historical Review

Abstract

United Kingdom (UK) accession into the European Economic Community (EEC), which became a political likelihood in 1970 and an actuality in 1973, led to a major change in agricultural policy away from a deficiency payments system supporting farmers' incomes towards the Common Agricultural Policy (CAP) method of assistance through farm prices above the market level. Such a basic alteration in government activity not only imposed well-known and thoroughly researched costs on the British economy in the form of higher food prices and an additional burden of protection, it also undermined dominant post-1945 historical trends.Firstly, it reversed a thirty year old process towards greater British self-sufficiency Between 1938 and 1946 UK agricultural production rose in value from 42% to 52% of the country's food imports, while under the deficiency payments scheme, permanently established in peacetime by the 1947 Agriculture Act, the proportion of UK food consumption supplied by domestic producers grew steadily until it reached a level of just under 72% in 1972. EEC membership, involving compulsory adoption of the CAP, initially reversed this movement; British agricultural self-sufficiency fell to 66% in 1977, the year when the Common External Tariff (CET) was first applied in full. The higher import bill that inevitably resulted imposed a severe strain on the UK balance of payments, estimated by the pro-market. Heath government in 1970 at a net annual deterioration in the range of 18% to 26%.