The EU’s agricultural policy dates to 1957, when the creators of the Treaty of Rome defined the general objectives of a common agricultural policy, post-war food shortages still fresh in minds. The principles and mechanisms of the Common Agricultural Policy (CAP) were adopted by the six founding members of the European Economic Community, and in 1962 CAP came into force.

CAP was designed to secure Europe’s self-sufficiency in food production. The basic principles of CAP remained the same for decades: guaranteed prices for agricultural products, often above world price levels, and subsidies based on the quantity of production, with little concern for the problem of surplus production.

CAP has been the most fully integrated of EU policies. In the 1970’s, nearly 70% of the EU budget went into agriculture. After a series of reforms, agriculture expenditures in the budget have dropped to 35% for the 2007-2013 financial period. Over the same period, more money (9.7%) has been allocated for rural development and the expansion of EU’s other responsibilities.

In 2003, Franz Fischler, then the Commissioner for Agriculture, Fisheries and Rural Development, presented a CAP reform package he described as the most radical improvement to the EU’s agricultural policy ever. His main proposals included:

• decoupling of subsidies and production
• high requirements of environmental, food safety and animal welfare standards as prerequisite for getting subsidies
• more money to rural development as opposed to direct and market subsidies
• cuts in intervention prices in many sectors

The enlargement of the EU from 15 to 27 members has brought new challenges to CAP – the number of farmers in the EU increased by over 70%. Meanwhile, farming organisations have welcomed the EU’s decision to set a minimum 10% target for the use of biofuels for transport by 2020. The EU has also created the possibility for agriculture to play a bigger role in the fight against climate change, according to the COPA organisation.

The Czech Presidency of the EU, in the first semester 2009, failed to secure an agreement on the future of the CAP post-2013. However, the Agriculture Council agreed unanimous conclusions on agricultural product quality and the retargeting of aid in Less Favoured Areas (LFA), which is designed to improve the “targeting of aid to farmers in areas with natural handicaps”.

In September 2010, Commissioner for Agricultural and Rural Development, Dacian Cioloş declared that the impending reform of the Common Agriculture Policy would include more elements to fight the volatility of prices and the decrease in farmers' incomes.