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An updated look at the impact of the EU's Common Agricultural Policy on developing countries

Alan Matthews


IIIS Discussion Paper No. 454

The European Union's (EU) Common Agricultural Policy (CAP) has long been criticised for its damaging effects on developing countries, and developing country agriculture in particular. This paper reviews whether these criticisms are still valid in the light of the recent reforms of the CAP. It reviews some of the ways in which the EU's agricultural policy can affect developing countries and examines the likely impact, in particular, of the changes made to the CAP regulations in the 2013 CAP reform. It concludes that the CAP now has relatively minor impacts on world markets in aggregate, although for particular commodities and particular countries, its importance can be greater. The revisions to the CAP regulations agreed in the 2013 CAP reform will have mixed and contradictory impacts on the EU's supply capacity and thus on developing countries. On balance, it represents a missed opportunity to build a more robust system of global food security. Developing countries will be disappointed that the opportunity was not taken to set a final date for the ending of export subsidies. A more ambitious CAP reform, in which the targeting of direct payments was pursued more ambitiously and coupled payments were phased out, would have had a greater impact in removing the remaining distortions caused by the CAP to world markets.

 

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Last updated 28 August 2014 by IIIS (Email).