The WEFE Nexus and the Common Agricultural Policy

Keith Matthews

The MAGIC Nexus project team has identified policy narratives that illustrate complexities and tradeoffs regarding the European Union's Common Agricultural Policy (CAP) in the context of the water, energy, food and environment (WEFE) nexus.

The importance of the Nexus for the Common Agricultural Policy

The Common Agricultural Policy is increasingly having to reconcile sectoral interests with those of the wider population in the context of the water, energy, food and environment (WEFE) nexus.  The explicit inclusion of energy within this policy-making context allows for a better-informed analysis of progress towards EU sustainability goals. But this doesn’t mean that achieving these goals is easier. Nexus analysis highlights the dependence on substituting non-renewable stocks in the lithosphere and the degradation of quantity or quality of renewable resources in the biosphere.  Indeed, nexus studies tend to raise fundamental questions about the nature of society that can be supported long term within knowable biophysical limits.  Such studies also ask policy makers to look again at whether innovation-led, GDP growth is really the panacea for public policy (a narrative since the mid-18th century).  Given the EU’s commitments to the UN Sustainable Development Goals, nexus studies that look across geographical scales can also highlight the nature of externalities and dependencies, assessing the consequences for the EU and other trading parties.

Importance of Common Agricultural Policy for the Nexus

In financial terms the CAP still dominates EU policy and provokes fierce debates between stakeholders both as part of the agreement of the multi-annual financial framework and coming to an agreement on how funds are used.  Co-decision-making with the European Parliament and trilogue processes with Commission, Parliament and Council of Ministers have only added to the intensity of scrutiny and arguably to the complexity of the CAP.  The inclusion since 2003 of rural development within CAP (Pillar 2) means that the CAP is a key source of funding to underpin delivery of EU directives and strategies on water, biodiversity, climate change and wider rural economic development.  The CAP thus has the potential to be a force for change, but the shares of resources devoted to such activities, while increasing, remain small.  The finances provided by the CAP combined with the tariffs imposed on non-EU states by the Single Market combine to stabilise the EU agri-food systems.

Institutional and narrative evolution of the Common Agricultural Policy

The CAP as an institution with a long history (conceptually from 1957 in the treaty of Rome) has generated many narratives - some seeking to preserve the status quo and others seeking reform or abolition.  Indeed, almost from the inception of CAP, reforms have been proposed (e.g. Mansholt in 1962).  It is possible to argue, however, that at a fundamental level the CAP continues to transfer money from general taxation into businesses many of which enjoy incomes or capital wealth significantly beyond that enjoyed by citizens.  What has evolved are the number and diversity of narratives used to justify the continued operation of the CAP. Justifications include the promotion of innovation, efficiency, green-growth, a bio-economy, food security, food quality, food costs, poverty alleviation, social cohesion, environmental quality, ecosystem services, animal welfare, and climate change mitigation.  With so many justifications there is a danger that the effectiveness of the CAP cannot be rationally evaluated.

Disentangling the CAP Narrative Nexus

Within the H2020 MAGIC project the intention is, with Commission staff and other stakeholders, to critically re-examine some of the key underpinning assumptions or definitions in the nexus of CAP narratives.  The analysis seeks to assess CAP narratives in terms of their feasibility (within biophysical limits), viability (within the limits of socio-economic institutions) and desirability (their normative or distributive consequences) and to assess the degree of openness required (that is the resources beyond the control of Member States).  The latter is particularly significant since if the CAP combined with other EU institutions generate negative rather than positive externalities then it undermines the EU’s commitments the UN SDGs potentially perpetuating poverty, environmental degradation, political instability, extremism, conflict and mass migration.