NEW CAP: from quotas to enhancement of production

Common Agricultural Policy (CAP) is one of the oldest EU policy. Orginally, in the sixties of the past century, intended to create enough food for stable prices, this policy collapsed under its own success. Mountains of cereals, lakes of milk, piles of buttter were the result. And subsidies, that is EU budget for CAP went up to more then 50% of the total budget. In the nineties the system of guaranteed prices was transformed into quota production. For this first time the Agricultural Council decided to enhance production of cereals because of the shortage and rising prices for cereals.

European Union agriculture ministers today approved the Commission's proposal to set at 0% the obligatory set-aside rate for autumn 2007 and spring 2008 sowings.
The change comes in response to the increasingly tight situation on the cereals market. It should increase next year's cereals harvest by at least 10 million tonnes. In the EU-27, a lower than expected harvest in 2006 (265.5 million tonnes) led to tightening supplies at the end of marketing year 2006/2007 and to historically high prices. Intervention stocks have shrunk from 14 million tonnes at the beginning of 2006/2007 to around 1 million tonnes now. The future of the set-aside system will form part of the debate to be kicked off by the Communication on the CAP 'Health Check' on 20 November. This will also address the issue of how to retain the environmental benefits which set-aside has brought. Setting the rate at zero does not oblige farmers to cultivate all their land. They can continue with voluntary set-aside and apply environmental schemes.
According to the press release: Cereals: Council approves zero set-aside rate for autumn 2007 and spring 2008 sowings