The Common Agricultural Policy promotes a US-like development of the European agriculture

Michael Glowinkel, Marian Mocan and Manfred Külkens

Abstract: The Common Agricultural Policy (CAP) is a substantial part of the European subsidy policy. However, this policy could not prevent the increasing displacement of small and medium-sized agricultural enterprises so far. The agriculture of the USA has experienced a systemic decline in small and medium-sized enterprises for decades and already negative consequences can be observed from this development. In Europe, the same tendency can be seen. To find a solution for small and medium-size enterprises we present our research that compares the subsidy mechanisms of the EU with that of the USA.The scope of this paper includes the examination of the development of small and medium-sized companies within the conditions of the current CAP and which steps in the development have been taken in the US agriculture. In order to identify which threats exist for the European agriculture, the influence of subsidy payments on the agricultural development is examined and assessed. The analysis reveals that the US agriculture has been dominated by industrialized farms due to the concentration development so far. Small and medium-sized companies hardly play a role in this system, which is geared towards continuously increasing efficiency. Thereby, negative side effects on the environment, climate, fauna, animal welfare and health etc. are accepted. According to the previous concentration process in European agriculture one cannot exclude the possibility that a further development towards a US-like situation in agriculture can be prevented. The results of the comparison indicate the need for changes of the EU policy to avoid a US-like evolution of the European agriculture.

Keywords: Common Agricultural Policy; decreasing of farms; farm structure; influences of subsidies in agriculture; subsidies; sustainable agriculture

Date published: 2021-02-25