Redistributive Policies Agriculture and Cohesion

Redistributive Policies Why redistribute? Characteristics of redistributive policies Burden on EU budget (CAP 45%) Encourages rent-seeking behavior Organized interests Difficulty of reform

EU Budget:

Common Agricultural Policy EC’s constitutive bargain Small and diverse agricultural sector Shapes history of EU integration Empty chair crisis British budgetary contribution Food security to European agricultural model

CAP reform Shift from price support to income support Impetus for reform: International trade Environmentalist and safety concerns 2004 enlargement Challenges of reform Agriculture Council Committee of Professional Agricultural Organizations of the EC Franco-German axis

CAP reform Price support Income support Over-production Storage costs Big vs. small farmers Environmental problems Consequences for international trade Food safety concerns Income support More costly over the medium term Set-asides Rural development

CAP reform Pressure from trading partners Uruguay round: US and agricultural free traders versus the EU Impetus for reform Doha Development Round Environmental and food safety concerns BSE crisis 2004 enlargement Phasing in payments

Turkey – EU Comparison (2003) Indicator Turkey EU 25 Total Area (Square meter) 769,604 3,973,200 Agricultural Area (1000 hectare) 26,578 163,479 Irrigated Agricultural Area (1000 hectare) 5,215 25,22 Number of Enterprises (1000) 3021 N/A Average Enterprise Size (hectare) 6,1 Population (1000) 69,884 453,683 Total Employment (1000) 20,811 192,647 Total Agricultural Employment (1000) 6,799 10,082 Ratio of Agriculture on Total Employment (per cent) 32,7 5,2 Ratio of Agriculture on GNP 11,5 1,6 Ratio of Agriculture on Total Export (per cent) 10,3 6,5