EU Agriculural Policy Institutions & Decision Making Process

A Hot Tip about Agriculture and Animal Husbandry in Spain

Posted on: 19 Apr 2010

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 OVERVIEW countries. 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 1957 supranational EU level. However, most decision- Belgium Italy making related to public services, taxation and social France Luxembourg welfare takes place at the individual EU country level. Germany Netherlands The EU has developed a foreign policy role that allows 1973-1995 member states to speak with one voice in a number of Denmark Spain forums such as the World Trade Organization (WTO), Ireland Austria the United Nations, G8 Summits, and the Organization United Kingdom Finland for Economic Cooperation and Development (OECD). Greece Sweden Portugal Given the influence the EU enjoys in international markets and fora, it is important to understand its key 2004 decision-making institutions and processes. Cyprus Lithuania Czech Republic Malta Estonia Poland Hungary Slovakia KEY EU INSTITUTIONS Latvia Slovenia The EU legislative and decision-making process 2007 involves three main institutions: Bulgaria Romania ? European Commission, which is independent of national governments, FUTURE PROSPECTS ? Council of the European Union, which represents Former Yugoslav Republic of Macedonia individual member states, Croatia Turkey ? 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 EU Process 2 agreed to by the presidents or prime ministers of all Adoption of EC Legislative Proposals 1 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 industries. spending funds. 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 proposals. 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 Affairs, ? Competitiveness, ? Agriculture and Fisheries, ? Transport, Telecommunications and Energy, 1 In addition to these institutions, a number of EU bodies ? Environment, 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. EU Process 3 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. tus. Council Summits 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 member states. 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 Council Responsibilities 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 (Table 1). to EU institutions. Responsibilities that fall under the ?Community? domain include passing legislation, ap- TABLE 1 proving the budget, and co-ordinating economic poli- cies. 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 Germany 99 entails working together in what is known as ?inter- France 78 governmental cooperation.? Such policy areas include Italy 78 foreign policy, security, immigration, defense, justice, United Kingdom 78 education, health and social protection. Poland 54 Spain 54 Romania 35 Preparatory Work for EU Legislation Netherlands 27 Belgium 24 As a rule, the Council only acts on the EC?s proposed Czech Republic 24 legislation and the EC normally has responsibility for Greece 24 ensuring that EU legislation, once passed, is applied Hungary 24 Portugal 24 correctly. Sweden 19 Each member state has a permanent team of Austria 18 delegates to represent it and defend its national Bulgaria 18 Denmark 14 interests in the Council. The head of each team is the Finland 14 country?s ambassador to the EU. These ambassadors Slovakia 14 or ?permanent representatives? have weekly meetings Ireland 13 within the Permanent Representatives Committee Lithuania 13 (COREPER). Latvia 9 Slovenia 7 COREPER is responsible for preparing the decisions Cyprus 6 of the Council, with the exception of most agricultural Estonia 6 issues which are dealt with by the Special Committee Luxembourg 6 Malta 5 on Agriculture. COREPER is assisted by some 250 working parties and committees, consisting of officials TOTAL 785 from the national administrations. EU Process 4 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 equal footing. 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. Democratic Supervision 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 whole. 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 answer. 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 inquiry. 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 EU Process 5 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- TABLE 2 lic is still in the process of ratification. If adopted, the Treaty is expected to modernize EU institutions and EUROPEAN COUNCIL 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 Germany 29 process whereby the CAP would no longer be subject France 29 solely to the decisions of Council. Instead, both Italy 29 Council and the EP would share this responsibility United Kingdom 29 under a ?co-decision? procedure. The EP would give a Poland 27 1st Reading before the Council gives its 1st Reading Spain 27 (or ?Common Position?), and then both institutions Romania 14 Netherlands 13 would pass a 2nd Reading, at which time the Council Belgium 12 would take on board the parliamentary amendments. Czech Republic 12 If there were no agreement between the Council and Greece 12 Parliament on the 2nd Reading, the negotiations Hungary 12 would pass into ?conciliation? ? which is the equivalent Portugal 12 of a 3rd Reading. With a 3rd Reading, the period for Austria 10 Bulgaria 10 adoption of legislation would likely take longer than Sweden 10 the usual 12 to 24 months. While more democratic, Denmark 7 this new legislative system for EU agriculture would Finland 7 most likely lengthen the process of consensus Ireland 7 building. Lithuania 7 Slovakia 7 In addition, under the Treaty, Council?s qualified ma- Cyprus 4 jority voting would be based on the principle of the Estonia 4 double majority, whereby decisions would need the Latvia 4 support of 55% of member states (15 out of the 27 Luxembourg 4 member states) representing a minimum of 65% of the Slovenia 4 Malta 3 EU?s population. To avoid a small number of large member states preventing the adoption of a decision, TOTAL 345 a blocking minority would need to include at least four member states. Implementing EU Policies The EC is responsible for managing the policies EU AGENCIES 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 obligations. or scientific task. There are currently 24 Community agencies, several of which are relevant to the agriculture and food sector, including: ? European Food Safety Authority, EU Process 6 port their agriculture sectors, subject to EU con- ? Community Plant Variety Office, straints. ? 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 trol, 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). Training, 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 Union. 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 prices. 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, the WTO. and the final budget must be adopted in December of that year. 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 75%. 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- EU Process 7 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. with them. REFERENCES SUMMARY 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 site, 2009. 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- 2007-2013. 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- Union. tice. European Commission (2004) Enlargement and The CAP is one of the key EU policies, accounting for Agriculture. 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- Union. 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: COM(2003)23final, Brussels. 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 Parliament 2007-09. 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 laws. rural policies, Web site, 2008. In many cases, EU laws are adopted jointly by the Council and the Parliament. However in the case of For further information regarding this paper, contact: August 2009 Odette Vaughan (odette.vaughan@agr.gc.ca, (613) 773-2454) Luc Tanguay (luc.tanguay@agr.gc.ca, (613) 773-2441) Project: 09-050b Brad Gilmour (brad.gilmour@agr.gc.ca, (613) 773-2452) Publication: 11003E ISSN: 1915-9110 For further information regarding this series, contact: Cameron Short (cameron.short@agr.gc.ca, (613) 773-2432) EU Process
Posted: 19 April 2010

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