Volume 44, Number 173,
April-June 2013
Common Agricultural and Cohesion Policy
in the Europe 2020 Strategy
Antonio González Temprano
cap SPENDING AS AN INSTRUMENT OF HARMONIZATION ( ...continuation )

Direct cap payments during the second half of the 2007-2013 Financial Framework provide two additional pieces of information. The first is the fact that European agriculture is still strongly subsidized. This cannot be refuted, as nearly one-third of their income is derived from subsidies. This neo-protectionist practice is not unique to the eu. Agriculture aid is a relatively widespread phenomenon, even in developing countries. Among prosperous economies, subsidies in Japan, Switzerland and Norway are some of the highest. Subsidies in the United States and Canada are significant as well, although lower than in Europe.

The second point is that these payments imply a transfer of resources from industry and services to agriculture. This contributes to a considerable reduction in income inequality within nations between agricultural sector income and the rest of economic activities, as well as rural versus urban environments. The fact that the majority of cultivated lands in less favored countries produces a payment figure notably below that of wealthy countries makes clear that the cap gives priority to sector and territorial income harmonization within national economies instead of among European farmers, which is not the optimal method to combat the current state of income distribution in the eu27.

There are various final conclusions that can be drawn from this work on cohesion policy and the cap. First, both are income harmonization methods, fighting against the deep disparities present in the eu27. The difference is that while cohesion policy resources are primarily oriented towards territorial harmonization, cap funds are more focused on sectors.

The policies have also developed in different ways. The 2007-2013 Financial Framework confirms the process initiated following the 1986 Single Act: stronger growth in funds directed towards cohesion policy than towards the cap. Despite the high increase in resources for cohesion policy in the current multiannual cycle as compared to the previous cycle (2000-2006), these funds have been weakened since the eu15 stage. This phenomenon is in conflict with the fact that income distribution in the eu27 is much higher than it was in the eu15.

Both cohesion policy and the pac are similar in the 2007-2013 Financial Framework in the following way: the twelve countries incorporated in 2004 and 2007 are paradoxically not the greatest beneficiaries of resource distribution. On the contrary, these nations receive lower funds, which goes against one of the founding principles of the eu, solidarity. Even so, these funds are making a significant contribution to development in these countries. Consequently, one of the challenges for the 2014-2020 Budget will be to remodel and strengthen harmonization through cohesion policy and the cap, a challenge described in the Europe 2020 Strategy .

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Feb 23th, 2018.
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