Impact of CAP on Spanish Agriculture in Europe

2. The Spanish Agriculture in Europe. The EU action in agriculture is reflected in the Common Agricultural Policy (CAP). Until 1980, the CAP was very protective and self-sufficient, ensuring that Europe could export while also increasing the living standards of farmers. The mechanism of action is as follows: farmers received guaranteed product prices higher than the international market. If there were surpluses, they were exported, and if imported products were present, taxes were imposed that increased their prices to the level of European products, allowing recovery. The EU provides subsidies to its farmers, similar to those in the U.S. or Japan. With this mechanism, farmers tended to increase their production until the model failed because they accumulated huge surpluses, as many supposed exports were lost. This model created an unbearable financial burden for much of the CEE, which pressured the U.S. to urge Europe to remove these protectionist policies and open markets. Thus, the CAP entered the debate and took measures to reduce surpluses. In 1992, a major reform occurred. Some of its features include:

• Guaranteed prices dropped to levels set by international markets, and to compensate farmers, subsidies were given.
• Sectors were reordered, decreasing the surface area and favoring retirements.
• A percentage of agricultural land in each area must remain fallow annually.
• Land abandonment and reforestation in sensitive areas, especially in medium mountains.

The politics of agricultural product prices is maintained by the EAGGF. Some disadvantaged regions receive support from the ERDF and ESF. The integration of the Spanish countryside into the CAP has been challenging, as farmers are encouraged to modernize their farms to compete in Europe. The CAP has had negative effects on agriculture in the Cantabrian area and also in the interior areas of cereal and some fruit productions. In contrast, the Andalusian Mediterranean coastline has found a large market for its products. The wine industry has had to convert to quality productions, and sheep farming has been favored. The objectives of the CAP are filled with contradictions, as on one hand, it aims to maintain a number of farmers, while on the other hand, it aligns with GATT agreements, where Europe is committed to liberalizing its agriculture and limiting the founding and surface area of certain products.