France’s Fruit Machine

The EU and the Common Agricultural Policy

From the start, the European Union has been a French-dominated affair. For all the talk of “organic unity” and “common interest”, it often seems to be an instrument for the interests of France alone. 

Few subjects are as soul-corrodingly dull as the European Union. It was supposed to be an engine for European unification but, precisely because no normal person can contemplate its bureaucratic mazework and legal convolutions without coughing up their own skull, it has been engineered into a fruit machine that pays off for really just one country, the French.

The basis of the EU was the European Coal and Steel Community (ECSC) of 1951. This was formed of six countries; France, Germany, Italy, Belgium, Holland and Luxembourg. In paper this was supposed to be a club for the free trade of basic industrial materials between its members. From the start, the French had other ideas. Robert Schumann, the French foreign minister of the time, said as the treaty was signed “Through the consolidation of basic production... this proposal represents the first concrete step towards a European federation, imperative for the preservation of peace.”

That phrase “preservation of peace” was code for “keep Germany on leash”. Twice in the previous fifty years, the Germans had attacked France. After the Second World War, it was in France’s interests to tie its larger neighbour down with as many treaties of cooperation, coordination and cultural friendship as possible. The ECS. now gave France a high level of influence over the industrial and economic policy of the burgeoning Federal Republic – especially since of its six members, three and half of them were French-speaking. What post-war Germany got out of the deal, according to one commentator, was readmission to the human race.

Of course, as far as successive French governments were concerned, the Germans had to pay a pretty hefty admission fee. The deal was that France would open its market to German exports in return for German taxpayers subsidising French farmers who were the basis of its largely agricultural economy in the years after the war. That deal solidified into the Common Agricultural Policy in 1957 when with great fanfare the ECS. became the European Economic Community, the forerunner of the European Union.

Ever since, the CAP, as it became known, has been passionately defended against all comers by successive French governments. Two-thirds of its budget was devoted simply to French agriculture. Very simply, it allows the French to pay off their farmers, traditionally one of the country’s most vociferous and frequently violent interest groups, with cash from the taxpayers of other countries. In 1965, when the Germans suggested some timid reforms that might have led to a cut in the CAP budget, President de Gaulle ordered his delegates out of all EEC bodies, freezing all decision-making in the Community until the other members caved six months later.

Over the years, the European Community has been enlarged – often in the face of vigorous French opposition (the country vetoed the UK’s application for membership twice). It now numbers twenty-five. It is no longer quite so easy for the French to fix the fruit machine so that the jackpot comes up every time. 

Nevertheless, since 1994 France has paid in €10.53 billion into the EU budget while taking out €68.6 billion, almost all of it in agricultural subsidy. A 2003 economic report commissioned by the EU Commission described the CAP as “an historic relic” and recommended that it be scrapped. The recommendations were ignored.

Today, the C.A.P. accounts for 40% of the total annual E.U. budget even though agriculture accounts for just 5% of EU jobs and 1.6% of economic output. The biggest beneficiary remains France which, though only one member of twenty-five, takes a quarter of the budget, amounting to €10.4 billion in 2003.

The French argue that Europe must support their farmers because their standard of living is essential to the culture of the entire continent. The beret-wearing, wise old man (Gérard Depardieu), tending his vines while his winsome daughter (Juliette Binoche) draws water from the well and the apparently hundreds of thousands of peasant farmers living the Manon Des Sources lifestyle across France must be preserved if the world is to enjoy those cottage-made cheeses that smell like mud or those tasty thrush pies or that local brandy that can eat through a ceramic beaker.

Except that this image of French agriculture is completely false. Only 4.5% of the French workforce are employed in agriculture, and 80% of the CAP subsidies paid in goes to just 20% of French farmers, mostly corporations, who run the industrial-sized beef, cereal, dairy and beet operations for huge French hypermarché chains. 

France’s control of the CAP within the structures of the European Union is very tight. In 2005, the British proposed reforming the agricultural budget. President Chirac responded by demanding that the rebate paid by the E. to the British be cut, which it was in return for a pledge that the French would review the national weighting of the CAP “sometime in 2012”.

This issue is about far more than a nice little bribe to a sector of the French electorate that President Chirac wants to keep sweet. The CAP might be run for the benefit of France but it inflates food prices across all of Europe by roughly €83 billion ($103 billion) a year (in the UK, one of the richer E.U. members, that’s an additional $2,250 a year to the food bills of a family of four). More destructively, the huge CAP leads to vast agricultural surpluses in farm goods, like sugar beet, that have been over-produced but no-one in Europe can buy because that would lower prices. Instead, they are dumped below cost in the markets of the Third World, effectively kicking the floor out from under the feet of the real peasant farmers of Asia, Africa and South America. 

Even enthusiastic pro-European, anti-free market observers like tubby film-maker Michael Moore understand the poisonous implications which he describes as "literally killing people in the Third World. In fact it is killing more people than all of Dubya's bombs". According to the Human Development Report 2003, the average dairy cow in the EU received (€739) $913 in subsidies in 2000, compared with an average of €6.5 ($8) per person in Sub-Saharan Africa.


The Real Masters. “Europe is the way for France to become what she has ceased to be since Waterloo: the leading power in the world.” General de Gaulle to Alain Peyrefitte, 1962

If The CAP Fits. The Common Agricultural Policy (CAP) is a system of European Union agricultural subsidies which represents about 44% of the EU's budget (€43 billion in 2005 ). These subsidies guarantee a minimum price to producers and direct payment of a subsidy. Its objectives are set out in Clause 2, Article 39 of the Treaty of Rome: ‘to ensure a fair standard of living for the agricultural community’. Over the years, the social and financial value of this Clause, especially to the French, has seen it outweigh the importance of other Clauses in Article 39, include Clause 5: “to provide consumers with food at reasonable prices”. CAP price intervention causes artificially high food prices throughout the EU. Europeans pay about 25% higher prices for food than they would without the CAP (the Timbro Research Institute has counted figures reaching over 80%). European sugar alone costs more than three times the global market price. This subsidy is costs each EU citizen on average €24 per week.

‘Non’. “The entry first of Great Britain and then of the other states will completely change the series of adjustments, agreements, compensations and regulations already established… the cohesion of its members would not hold for long and in the end there would appear a colossal Atlantic Community under American dependence and leadership, which would soon swallow up the European Community. That is not at all what France wanted to do and what France is doing, which is strictly a European construction.” President de Gaulle, vetoing Britain's entry into the EEC in 1963. 

Home from Home. A telling example of France’s influence over the EU can be seen in the European Parliament whenever it meets in Strasbourg, a middle-sized city in the east of France. The parliament itself has very little say about how things are run but it gives a little democratic sheen to the organisation. When the Parliament was set up, it was due to sit in Brussels, Belgium where the European Commission meets. However, the French objected, demanding that the hugely expensive parliamentary apparatus be moved to Strasbourg to give that city’s economy a boost. In 1979, a compromise was agreed. The Parliament would go to Strasbourg but for only 48 days a year. The rest of the time it would meet in Brussels while two-thirds of its staff and its library would be sited in Luxemburg. A new Parliament building was constructed at a cost of $500 million in Strasbourg. This back and forth of members, secretaries, translators and general hangers-on costs 20% of the parliament’s €1.3 billion budget each year.

Hitting The Jackpot. This is how the EU system of contributions and subsidies works for France. By comparison, the figure of the U.K., a country of comparable economic size and G.D.P. Is included.

Net contribution to EU (2003) 

France: £0.056 bn

UK: £.5.5 bn

Total net contribution to EU since 1994

France: £10.563 bn

UK: £23.956 bn

Total CAP Receipts since 1994

France: £68.6 bn

UK: £28.4 bn

CAP Receipts per capita (2003)

France: £117

UK: £45

It should be noted that the largest overall contributor to the EU budget and the CAP is Germany (though Holland pays more per head). If it were not for the budget rebate negotiated by UK Prime Minister Margaret Thatcher in 1984, the U.K. would be paying 14 times the contribution of France. In 2005, President Chirac launched a diplomatic campaign in the EU to reduce this rebate.

‘”Non” To Europe’. French politicians got a taste of their own obstructionist medicine in 2005 when, to the amazement of the rest of Europe, the French public voted ‘Non’ to a mooted European Constitution. This Constitution had been written up by a former French president, Valery Giscard d’Estaing (who, after losing an election when it was revealed that he received regular gifts of diamonds from General Jean-Bedel Bokassa of the Central African Republic, had typically been appointed Chairman of the Convention on the Future of Europe). It was a step closer to making the European Union into a ‘super-state’, giving its institutions new powers in the domestic and economic lives of its citizens. French politicians led by Jacques Chirac were so confident that the Constitution would consolidate French power in Europe, that they made the treaty’s ratification subject to a national referendum. But on 29 May 2005 the French public voted ‘Non’ despite a prolonged, partly government-funded campaign that was supported by all the major political parties in France and media. Paradoxically, the voters rejected the treaty by 55%-45% because it didn’t give enough influence to France and potentially threatened to dilute their much-valued subsidies.


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