Economic Geography- EU Policy

Examine the impact of any one European Union policy on the Irish economy.

A European Union policy that has impacted on the Irish economy is the Common Agricultural Policy. Overall, Ireland has benefited greatly from this policy. The CAP was introduced in Ireland in 1973 when we joined the EU. The policy aimed to raise farm incomes, guarantee prices for agricultural produce and provide subsidies to support farmers. This ensures a good standard of living for agricultural workers as well as providing food at fair prices for consumers. 

The EU categorized Western Ireland as the most disadvantaged area in Ireland, so it received high subsidies and grants. This modernized the agricultural sector, made it more efficient, and improved food quality and animal welfare. However, it also brought about the following issues:

1. Food surpluses (linked to production): The more food a farmer produced, the more money they would receive. This caused a build-up of surplus food.
2. Food prices: Farmers received guaranteed prices for the food they produced. Tariffs were placed on goods imported from outside the EU. To maintain prices, the EU bought surplus produce. This build up of dairy, meat and cereal produce caused 'food mountains'. This storage of food was costly, so the EU sold surpluses at low prices. This damaged exports to developing countries.

The CAP has also had other impacts on the Irish economy and Irish farmers.

1. CAP reforms: The EU began reforming the CAP in 1992 as the high cost of its policies could not be maintained. The reform moved the CAP away from being a production-orientated policy. This encouraged farmers to diversify into other areas, such as organic farming.
2. Decoupling: This aimed to break the link between subsidies and production. Quotas were placed on the production of milk. Penalties were put on farmers for overproducing. As a result, farming became more sustainable and market orientated. However, these milk quotas expired in 2015.
3. Income supports: Price supports were replaced by direct income supports. A direct single payment is made to farmers each year. The removal of price supports means international food prices are no longer affected by the EU subsidizing agricultural exports.
4. Food safety: Consumer demand for food safety has risen due to food scares, eg. food and mouth, horse-meat burgers. The CAP therefore promotes food safety by encouraging products to be traceable back to their source. Food producers are responsible for the quality of their food.
5. Rural development policy: In the 21st century, CAP has focused on the economic, social and environmental development of rural areas. The policy supports innovation and competitiveness. Local Action Groups receive funding to design development strategies in local areas, eg. environmental improvements- water quality control, land management.