The Green Paper sought to bring supply and demand into balance, to introduce new ways of reducing production in problem sectors and, generally, to analyse alternative solutions for the future of the CAP.
In 1988, the European Council agreed on a package of reform measures, including the “agricultural expenditure guideline”, which limited the percentage of CAP expenditure in the overall budget.
In 1991, the Commission, with Ray MacSharry as the Agriculture Commissioner, put forward two discussion papers on the development and the future of the CAP. These papers were the basis for a political agreement on the reform of the CAP, adopted by the Council on 21 May 1992. The reform of 1992 marked a major change in the CAP and had as its principal elements: the cutback of agricultural prices to render them more competitive in the internal and world market, the compensation of farmers for loss of income, as well as other measures relating to market mechanisms and the protection of the environment.
The reform of 1992 was generally regarded as successful, with positive effects on European agriculture. However, developments in the ensuing years - international trends, the enlargement towards Central and Eastern Europe, the preparation of the single currency causing budgetary constraints, the increasing competitiveness of products from third countries and a new round of World Trade Organisation negotiations - forced further adaptation of the CAP, in other words, a new reform. Agenda 2000 was a step in this direction.
AGENDA 2000
In July 1997, the Commission proposed the reform of the CAP within the framework of Agenda 2000, which was a blueprint for the future of European Union policy, in view of the expected enlargement. Negotiations on Agenda 2000, and thus the agreement on the CAP reform, were concluded at the Berlin European Council in March 1999.
Agenda 2000 has been the most radical and comprehensive reform of the Common Agricultural Policy since its inception. It built on the process begun in 1992 and it provided a sound basis for the future development of agriculture in the Union, covering all functions of the CAP: economic, environmental, rural.
In particular, the reform comprises measures for:
· the reinforcement of the competitiveness of agricultural commodities in domestic and world markets;
· the promotion of a fair and decent standard of living for the farming community;
· the creation of substitute jobs and other sources of income for farmers;
· the formation of a new policy for rural development, which becomes the second pillar of the CAP;
· the integration of more environmental and structural considerations into the CAP;
· the improvement of food quality and safety;
· the simplification of agricultural legislation and the decentralization of its application, in order to make rules and regulations clearer, more transparent and easier to access.