Page 74 - Biorefinery 2030 Future Prospects for the Bioeconomy (2015)

42 2 An Original Business Model: The Integrated Biorefinery

– Access to markets, by imposing the transformation of all protection measures
into customs duty (tariff equivalents) and then their gradual reduction (by 36 %
over 6 years, 1995–2000, compared with the reference period, 1986–1988).
– Differentiated reduction of subsidy volumes by type of aid, depending on their
capacity to distort agricultural markets.
– Reduction of export subsidies over 6 years by 21 % in volume and 36 % in value,
compared with the reference period of 1986–1990. This linear reduction was
implemented by the European Union in 20 product groups. For processed
products, only the reduction in value was applied. Before this agreement,
although agriculture was already subject to GATT regulations, export subsidies
were regulated by other agreements (Tangermann 2001).

The 1992 reform of the CAP, apart from its internal objectives, also aimed to
facilitate the Agreement on Agriculture as part of the Uruguay round. In fact, the
EU broadly respected the commitments it made in Marrakech.
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Since 1995, the common agricultural policy has been subject to WTO rules. A
Dispute Settlement Body (DSB), with a very strict procedure for litigation, was set
up to ensure that states who were party to the agreement respected the new
multilateral regulations.

2.1.2 The Common Agricultural Policy
Agricultural cooperatives had to adapt to the different phases of CAP reform.
Several key stages can be distinguished:

– In 1962: creation of the CAP, with the initial aims of increasing agricultural
productivity, guaranteeing a fair standard of living for farmers, stabilising
markets, guaranteeing food supply and ensuring reasonable prices for
consumers. Farmers invested massively in new production techniques and new
equipment in order to increase their production volumes.
– Production surpluses soon appeared; in 1984, quotas were set up and a policy of
subsidy reduction was implemented.
– In 1988: budget discipline with a maximum annual allocation for expenses and
obligatory set-aside of land.
– From 1992: new guaranteed low prices to align with global prices.
– In 1999: Berlin agreement, giving European agriculture responsibility for
protecting the environment and local territories.
– In 2003: Delinking of subsidies. Subsidies are paid in the form of a single
payment per farm based on the average level of subsidies received during

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“Within the framework of the General Agreement on Tariffs and Trade (GATT), signed in
Geneva in 1947, and the agreement setting up the World Trade Organisation (WTO), signed in
Marrakech in 1994, the EU and its member states act in accordance with articles 207 (common
trade policy ), 217 and 218 (international agreements).”