European Union Agricultural Policy Institutions and Decision Making Processes.
This note examines European Union (EU) institutions and policy making processes in relation to its agriculture and food sector. With a market comprised of 495 million people across 27 countries and a comprehensive agricultural policy accounting for the largest share of the EU budget, how the EU policy environment functions is important to Canada.
EUROPEAN UNION AGRICULTURAL POLICY INSTITUTIONS
AND DECISION MAKING PROCESSES
Agricultural Policy Issues Vol. 2, No. 1
One in a series of policy notes on countries of interest to Canada.
2007 the EU comprises 495 million citizens across 27
The 1957 Treaty of Rome, signed by France,
The 1993 Maastricht Treaty enshrined the results of
Germany, Italy, Belgium, the Netherlands and
further work to adopt laws to eliminate technical,
Luxembourg, created a common market to promote
regulatory and legal barriers. Goods, people, services
economic integration in the region. Goods were
and capital can now move even more freely
allowed to flow freely among member states and
throughout the EU. In addition, in 2002, a common
common tariffs were established for all products
currency, the euro, was instituted and 16 member
entering the Union from third countries. The Treaty of
states had adopted it by 2009.
Rome also established the EU Common Agricultural
Policy (CAP). With the CAP, high domestic prices and
The CAP accounts for as much as 50% of the total EU
import barriers were put in place to ensure sufficient
budget in some years, although this share is declining.
revenues to EU farmers.
It remains the common EU policy that uses the largest
share of the EU budget. Policies for agriculture,
ORIGINAL MEMBERS fisheries, trade, and regional development policy are
?common? in the sense that they are decided at the
supranational EU level. However, most decision-
making related to public services, taxation and social
welfare takes place at the individual EU country level.
The EU has developed a foreign policy role that allows
member states to speak with one voice in a number of
forums such as the World Trade Organization (WTO),
the United Nations, G8 Summits, and the Organization
United Kingdom Finland
for Economic Cooperation and Development (OECD).
Given the influence the EU enjoys in international
markets and fora, it is important to understand its key
decision-making institutions and processes.
Czech Republic Malta
Hungary Slovakia KEY EU INSTITUTIONS
The EU legislative and decision-making process
involves three main institutions:
? European Commission, which is independent of
? Council of the European Union, which represents
Former Yugoslav Republic of Macedonia
individual member states,
? European Parliament, which is elected by and
represents EU citizens.
By 1995, nine more western European countries had
This ?institutional triangle? produces the laws and
joined the Union to form the EU15. In 2004 several
policies that apply throughout the EU. In general, the
eastern European and other countries joined the
EC proposes new legislation, and the Council and
Union, bringing membership to 25 countries. From
Parliament pass laws. The powers and responsibilities
of EU institutions are contained in Treaties, which are
agreed to by the presidents or prime ministers of all
Adoption of EC Legislative Proposals
EU member states and ratified by their parliaments.
The EC works according to the ?subsidiarity principle?:
issues are dealt with at the lowest possible level. The
The European Commission EC makes a legislative proposal at the EU level only if
it considers that an issue cannot be solved more
The European Commission (EC) upholds the interests
efficiently by national, regional or local efforts. If the
of the EU as a whole. The EC has the ?right of
EC concludes that EU legislation is required, its
initiative?, which means that it alone is responsible for
proposals are intended to satisfy the widest possible
drafting proposals for new European legislation. The
range of interests. These proposals must be in the
EC is also the Union?s executive arm; it is responsible
interest of the Union and not of specific countries or
for implementing policies, running programs, and
The Commission President decides which Commis-
Twenty-seven commissioners ? one from each
sioner is responsible for which policy area. Each
member state ? are appointed to manage the institu-
Commissioner is responsible for presenting proposals
tion and make its decisions. Commissioners have held
on a specific policy area. However, the whole EC
political positions in their countries; however they are
team makes a collective decision on the policy
committed to act in the interest of the Union as a
whole and not take instructions from national govern-
ments. A new Commission is appointed every five In the case of agriculture, EU level legislation is
years. The member states agree on whom to appoint required. The Agriculture Commissioner consults key
as the new Commission President. This person and DGs in the Commission, such as those responsible for
the member states then appoint the other Commis- Trade, Environment, Budget, and Health (including
sioners. Animal and Plant Health, Food Safety, and Animal
Welfare). This process can be contentious and pro-
The EC is divided into 27 Directorate-Generals (DGs),
posals are sometimes modified in order to reach
each headed by a Commissioner. There is concern
agreement among Commissioners. At least 14 of the
that a Commission consisting of so many Commis-
27 Commissioners must approve a legislative pro-
sioners may not work well. Consequently, the number
posal in order for it to be adopted by the EC. The
of Commissioners may be reduced with the next
document is then sent to the Council and the
Commission in November 2009.
Parliament for their consideration.
DG Agriculture and Rural Development
The European Council
The Directorate-General for Agriculture and Rural
The Council is the EU?s main decision-making body.
Development (DG AGRI) is responsible for the imple-
Meetings are attended by one minister from each
mentation of agriculture and rural development poli-
member state; the minister to attend depends on the
cies. The latter is managed with other DGs who deal
agenda subject. For instance, if the Council discusses
with structural policies.
agricultural issues, the Agriculture Minister from each
DG AGRI has a staff of about 1,000 and is comprised member state attends. The Council is then referred to
of 12 Directorates as the Agriculture Council. dealing with all aspects of the CAP,
including market measures and direct aid to farmers.
There are 9 different Council configurations:
By operating an agricultural policy that is common to
all member states, the EU seeks to achieve a level
? General Affairs and External Relations,
playing field for farmers across the member states.
? Economic and Financial Affairs,
DG AGRI also contributes to other EU policies in fields
? Justice and Home Affairs,
such as food safety, the environment, and trade.
? Employment, Social Policy, Health and Consumer
? Agriculture and Fisheries,
? Transport, Telecommunications and Energy,
In addition to these institutions, a number of EU bodies
play specialised roles, including: the European Central
? Education, Youth and Culture.
Bank which is responsible for monetary policy; the
European Investment Bank which finances investment
Council ministers are accountable to their national
projects; the European Economic and Social Committee
parliament, so that their signature represents the sig-
which represents civil society, employers and employees;
nature of their member state?s government.
and the Committee of the Regions which represents
regional and local authorities.
The Special Committee on Agriculture consists of
Presidency of the Council
experts from each of the respective Ministries of
The Council presidency is viewed as highly influential
Agriculture as well as the EC?s DG AGRI. This
in Council decision-making. The presidency rotates
Committee alone manages all preparatory work for
among member states for a six month period. This
Council decisions related to agriculture. In addition to
allows each member state for a period of time to
the work of the Special Committee on Agriculture, the
control the Council agenda and chair all meetings,
Agriculture Council (all 27 agriculture ministers), holds
promote political decisions and broker compromises
monthly meetings to give negotiations political impe-
among member states.
The European Parliament
The Council holds summit meetings, known as the
The European Parliament (EP) is the only body of the
European Council Summit, as often as four times
EU that is directly elected by the citizens of the EU
annually. Summits are attended by presidents and/or
and therefore represents the interests of individual EU
prime ministers of the member states and the
voters. Elections are held every 5 years across all 27
President of the EC. These meetings establish the
general political guidelines for the EU and resolve
Rather than sitting in national delegations, members
issues that could not be agreed upon by ministers at
of the EP sit according to their political affinity in seven
usual Council meetings.
Europe-wide ?political groups?. These represent a
wide range of views on European integration, from
strongly pro-federalist to ?Eurosceptic.? Political
groups must contain at least 20 members elected from
Most of the Council?s responsibilities relate to the
at least 6 member states. There are 785 seats, which
?Community? domain: areas where member states
are apportioned by member state and political group
have decided to collectively delegate decision-making
to EU institutions. Responsibilities that fall under the
?Community? domain include passing legislation, ap-
proving the budget, and co-ordinating economic poli-
EUROPEAN PARLIAMENT 2007-2009
Other Council work involves policies where member
Number of Seats per Member State
states do not delegate powers to the EU and simply
entails working together in what is known as ?inter-
governmental cooperation.? Such policy areas include
foreign policy, security, immigration, defense, justice,
United Kingdom 78
education, health and social protection.
Preparatory Work for EU Legislation
As a rule, the Council only acts on the EC?s proposed
Czech Republic 24
legislation and the EC normally has responsibility for
ensuring that EU legislation, once passed, is applied
Each member state has a permanent team of
delegates to represent it and defend its national Bulgaria 18
interests in the Council. The head of each team is the
country?s ambassador to the EU. These ambassadors
or ?permanent representatives? have weekly meetings
within the Permanent Representatives Committee
COREPER is responsible for preparing the decisions
of the Council, with the exception of most agricultural
issues which are dealt with by the Special Committee
on Agriculture. COREPER is assisted by some 250
working parties and committees, consisting of officials
from the national administrations.
The three largest groups in the 2007-09 EP are the express EP views and concerns about topical issues
constellation of the European People?s Party and the items on the European Council's agenda.
(Christian Democrats) and European Democrats, the
Socialist Group, and the Alliance of Liberals and
Democrats for Europe. Together they account for 602
PASSING EU LEGISLATION
of the 785 seats.
In most cases, EU laws are adopted jointly by the
The EP has three main roles: passing European laws,
Council and the EP ? a process called ?co-decision?.
approving the EU budget and democratic supervision.
This procedure puts the EP and the Council on an
Passing European Laws
However in the case of ?sensitive? areas, such as
agriculture, taxation, and immigration, the Council
Most EU laws are adopted jointly by the Council and
alone legislates, though it must consult the EP. This
the EP within co-decision procedures. However, legis-
decision-making process is termed the ?consultation?
lation related to agriculture and certain other sensitive
procedure. While the Council cannot finalize reforms
policy areas are passed by the Council alone.
until the EP has voted through its opinion on draft
The EP also plays a role in providing impetus for new legislative proposal, Council Ministers are not obli-
legislation by studying the EC?s annual work program, gated to take on the EP amendments in the final
considering what new laws would be appropriate and legislation.
requesting that the EC put forward proposals.
Negotiations pertaining to agriculture typically begin
with a compromise text by the Council Presidency that
includes key concerns of member states. The Presi-
Approving the EU Budget
dent, together with the Agriculture Commissioner,
The Council and the EP make joint decisions on the
works closely with national farm ministers over a
EU?s annual budget. Parliament debates the budget in
period of a few days to fine-tune the compromise and
two successive readings, and the budget comes into
attempt to reach a consensus. However, domestic
force only once it is signed by the President of
political realities can affect final votes. Ministers
Parliament. Parliament also monitors budget spending
sometimes need to be seen to be voting against
and decides whether to approve how the EC has
certain aspects of the legislative proposals. Member
managed the previous year?s budget.
states can be quite divided on how to proceed with
reforms and the pace at which market-oriented poli-
cies should be adopted.
Council decisions are finalized with a voting process
The EP exercises democratic supervision over the
by member states? ministers. Depending on the sub-
other European institutions in a number of ways.
ject being dealt with, there are various kinds of votes.
Although EU member states nominate Commission-
For most issues, including agriculture, a qualified
ers, they cannot be appointed without parliamentary
majority (a weighted voting system based on the
approval. The EP interviews each nominee, including
populations of member states) is used.
the prospective Commission President, and then
votes on whether to approve the Commission as a
Those countries with larger populations are given
more votes. However, the figures are weighted in
favour of the less populous countries (Table 2).
Throughout the term of the EC, it is accountable to
Parliament, which can call for the EC?s mass resigna-
A qualified majority is reached when a minimum of
tion. However, more generally, the EP exercises
255 votes is in favour, which is 73.9% of the total 345.
control by examining EC reports and posing questions
A yardstick for qualified majority voting that has been
to the EC; Commissioners are legally bound to
used is that a text will be blocked if 3 large member
states or 2 large and 3 to 4 medium member states
are against. In certain areas, such as foreign policy,
The EP follows the work of the Council and asks the
defense and immigration, Council decisions must be
Council questions. The Council President attends EP
unanimous. For procedural decisions, a simple major-
plenary sessions and takes part in debates. The EP
ity is used.
can exercise further democratic control by examining
petitions from citizens and setting up committees of
The period from the time the EC releases its
legislative proposals until Council adoption can take
less than 12 months with less controversial legislation.
The EP also provides input to every EU summit (the
However, it is common for the process to last 12
European Council meetings). At the opening of each
months and even as much as 18 to 24 months.
summit, the President of Parliament is invited to
Agriculture negotiations, in particular, are usually quite BOX 1: THE LISBON TREATY
protracted. Under the anticipated Lisbon Treaty, the
The Lisbon Treaty was signed by the governments of
process of ?co-decision? would be adopted for agricul-
all 27 EU member states in December 2007 in Lisbon.
ture (Box 1).
While it has been ratified by 25 member states,
Ireland voted against it in 2008 and the Czech Repub-
lic is still in the process of ratification. If adopted, the
Treaty is expected to modernize EU institutions and
place the enlarged Union in a better position to more
Qualified Majority Voting
efficiently tackle the challenges of a globalized world.
Number of Votes per Member State ? 2009
The Lisbon Treaty would imply a decision-making
process whereby the CAP would no longer be subject
solely to the decisions of Council. Instead, both
Council and the EP would share this responsibility
United Kingdom 29
under a ?co-decision? procedure. The EP would give a
1st Reading before the Council gives its 1st Reading
(or ?Common Position?), and then both institutions
Netherlands 13 would pass a 2nd Reading, at which time the Council
would take on board the parliamentary amendments.
Czech Republic 12
If there were no agreement between the Council and
Parliament on the 2nd Reading, the negotiations
would pass into ?conciliation? ? which is the equivalent
of a 3rd Reading. With a 3rd Reading, the period for
Bulgaria 10 adoption of legislation would likely take longer than
the usual 12 to 24 months. While more democratic,
this new legislative system for EU agriculture would
most likely lengthen the process of consensus
In addition, under the Treaty, Council?s qualified ma-
jority voting would be based on the principle of the
double majority, whereby decisions would need the
support of 55% of member states (15 out of the 27
member states) representing a minimum of 65% of the
Malta 3 EU?s population. To avoid a small number of large
member states preventing the adoption of a decision,
a blocking minority would need to include at least four
Implementing EU Policies
The EC is responsible for managing the policies
adopted by the Council and the EP. The EC also must
Numerous specialized and decentralized EU agencies
ensure that EU countries do not subsidize their indus-
are in place to serve EU citizens. They respond to the
tries in a way that would distort competition between
desire for geographical devolution and deal with tasks
member states. This is very important in the case of
of a specific legal, technical or scientific nature. These
the CAP, as discussed below under EU rules for state
EU agencies fall into four categories.
aid to agriculture.
(1) Community agencies: These agencies are distinct
The EC, along with the Court of Justice, is responsible
from Community institutions (the Commission, Coun-
for ensuring that EU law is applied correctly in each
cil, Parliament, etc.), though they are governed by
member state. It is the responsibility of the EC to take
European public law. Agencies have their own legal
steps if an EU members state is not meeting its legal
framework in order to accomplish a specific technical
or scientific task.
There are currently 24 Community agencies, several
of which are relevant to the agriculture and food
? European Food Safety Authority,
port their agriculture sectors, subject to EU con-
? Community Plant Variety Office,
? Environment Agency,
? Community Fisheries Control Agency.
In 2002 member states agreed to put financial limits
on the CAP despite the additional agriculture expendi-
Other Community agencies include:
tures anticipated from the impending 2004 enlarge-
? European Centre for Disease Prevention and Con-
ment by 12 new member states. Costs related to
direct payments and agriculture market measures (the
? European Agency for the Management of Opera-
so-called Pillar 1 of the CAP) were limited to approxi-
tional Cooperation at the External Borders,
mately 2006 levels over the 2007-2013 budget.
? Office for Harmonisation in the Internal Market,
However, no spending limits were put on rural devel-
? European Centre for the Development of Vocational
opment framework policies (Pillar 2 of the CAP).
Significant reforms of the CAP occurred in 2003 and
? European Training Foundation,
subsequently, designed to further accommodate the
? European Foundation for the Improvement of Living
2004 EU enlargement, particularly in light of the finan-
and Working Conditions,
cial discipline applying to the 2007-2013 budget.
? Translation Centre for the Bodies of the European
EU Rules for State Aid to Agriculture
(2) Common Foreign and Security Policy agencies
carry out tasks within the framework of the EU?s
The EU rules for State aid to the agriculture sector
Common Foreign and Security Policy.
have three components.
(3) Police and judicial cooperation in criminal matters
(1) State aid must follow the general principles of
agencies assist Member States co-operate in fighting
competition policy. Maintaining a system of free and
against organised international crime.
undistorted competition is one of the basic principles
of the EU.
(4) Executive agencies are set up for a fixed period of
time to manage one or more Community programs.
(2) State aid rules must be consistent with the EU?s
common agriculture and rural development policies.
State aid that runs counter to common market provi-
sions is prohibited because member states? unilateral
EU BUDGET PROCESS
aid must not interfere with EU support for product
The EC provides spending proposals each spring for
the following year. The EC proposals are then
(3) The rules must be compatible with the EU?s
negotiated and fine-tuned by the Council and the EP.
international obligations, including those falling under
Agreement must be reached by all member states,
and the final budget must be adopted in December of
Each year, budgets are updated to take account of Member State Contributions
growth and inflation, but they cannot be in deficit.
Member states contribute both to the management
Annual budgets are part of a seven-year financial
and the funding of agricultural programs. Individual
framework, which currently covers the period from
member state funding that is in addition to budgeted
2007 to 2013. These frameworks allow the EU to plan
CAP expenditures is termed State aid. In 2005, State
programs for several years in advance.
aid was estimated to account for about 25% of total
The budget funds EU institutions and policies. It is
expenditures on agriculture in the 25 member states,
equivalent to about 1% of EU gross national income or
while CAP expenditures represented the remaining
235 euro per person. The revenue to fund the budget
is sourced from import duties, a consumer value
CAP programs related to rural development (Pillar 2)
added tax, and an additional contribution based on
are jointly funded and managed by the EU and
each member state?s gross national income.
member states. Depending on the activity, member
states co-finance these programs at a rate varying
between 15% and 80%. In terms of management, the
Funding EU Agriculture
EC is responsible for adopting EU strategic guidelines
The EU has relatively limited fiscal responsibility with
for rural development policy, while member states are
the exception of expenditures on agriculture. Although
responsible for preparing a National Strategy Plan to
spending under the CAP accounts for the largest
implement the programs.
share of the EU budget, member states further sup-
CAP programs under the budget for Agriculture (Pillar agriculture, the Council alone legislates. Negotiations
1), on the other hand, are generally funded by the EU, pertaining to agriculture typically begin with a compro-
and either managed centrally by the EC or jointly by mise text by the Council, then the Council and
the EC and the member state. Member state top-ups Commissioner for Agriculture work with national farm
may occur under Pillar 1, such as new member state ministers to prepare a final text. Council decisions are
top-ups to direct payments given a specified rate and voted on by member states? ministers. For agriculture,
phase-in period. A number of activities under Pillar 1 a qualified majority (a weighted voting system based
related to the functioning of markets and direct on the populations of member states) is used,
payments are jointly managed. In general, the EC is whereby a minimum of 74% of votes must be in
responsible for regulating and funding these joint favour. In other areas, such as foreign policy, Council
programs, while member states are responsible for decisions must be unanimous. For procedural deci-
their delivery and the administration costs associated sions, a simple majority is used.
Council of the European Union, EU Web site, 2009.
A unique partnership has allowed the EU to gain a
European Commission, EU Institutions and Other
level of global influence that each member state could
Bodies, EU Web site, 2009.
not achieve on its own. Goods, people and services
European Commission, The Treaty of Lisbon, EU Web
can move freely throughout the EU and more than half
of its 27 member states have adopted a common
currency. Increased integration benefits the EU with
European Commission, Budget of the European
reduced technical, regulatory and legal barriers.
Union, Reforming the Budget, EU Web site, 2009.
Decisions are made at the supranational EU level for
European Commission (2006) Community Guidelines
some policies, including agriculture, fisheries, trade,
for State Aid in the Agriculture and Forestry Sector
and regional development, while decision-making re-
lated to public services, taxation and social welfare
European Commission (2005) Council Regulation
occurs mainly at the individual country level. Member
(EC) No 1290/2005 on the financing of the common
states have ?inter-governmental cooperation? for for-
agricultural policy, Official Journal of the European
eign policy, security, immigration, defense, and jus-
European Commission (2004) Enlargement and
The CAP is one of the key EU policies, accounting for
the largest portion of the EU budget and the only
European Commission (2003) Council Regulation
policy that receives most of its funding from the EU
(EC) No 1782/2003, Official Journal of the European
budget. Operating agriculture policies at the suprana-
tional level allows the EU to achieve a more level
playing field for farmers across the member states.
European Commission (2003) A Long-term Policy
Perspective for Sustainable Agriculture,
EU decision-making occurs in three main institutions:
the Commission, which is independent of national
governments, the Council, which represents individual
European Communities (2008) Faces of the European
member states, and the Parliament, which is elected
by EU citizens. Overall, the Commission proposes
Waite, Roger, Health Check Explainer, CAP Health
new legislation and the Council and Parliament pass
Check: Toward better European farming, food and
rural policies, Web site, 2008.
In many cases, EU laws are adopted jointly by the
Council and the Parliament. However in the case of
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