INTRODUCTION

The reforms proposed during 2003 were in continuation with those discussed in the MacSharry reforms and subsequently in the big ‘AGENDA’ in 2000. The reason for naming this the phase 3 of CAP is that this policy moved into its third stage (level) of development towards reaching the ultimate goal of becoming a ‘COMPLETE’ world model for the years to come. We all know since its establishment in 1962 with appropriate land reforms (rights only to those who cultivate on that farmland) and the movement towards providing cheap and ‘quality’ food grains to its consumer and then the producer aid through subsidy, CAP has changed with time for the good. But, providing increasing focus to ‘world welfare’ at large during 2003 has given this model a holistic picture.

THE BUILDING BLOCK

There are few important terminologies to be understood before we can analyse the 2003 reform and its impact on producers, consumers and the future of EU (European Union) spending on strengthening its agricultural sector. Firstly, the ‘Pillar One’ and ‘Pillar two’ reforms which are a conglomerate of the budgetary expenditure to be allocated by the EU for improvement of their primary sector.

Pillar one reforms represent the broad division of food products and the different kind of support in the form of ‘Aid’ and ‘Non-Aid’ schemes. This pillar comprises of all the basic and initial characteristic functions of CAP. Direct payments were given to farmers for selected food items. For instance, cereals and dairy products were given priority in terms of allocation of land, storage facilities, premiums, buying a fixed percentage by the government , subsidies etc.

Pillar two reforms were those different set of budgetary expenditure allocated by the EU (proposed in 2003) to achieve the target of ‘rural development’. But these were not compulsory for the member nations to adopt. Amongst the 22 measures proposed was divided into 3 sub-categories namely: improving the less agri favourable areas, enhance competition in the sector, and other broader development of those rural areas in terms of tourism and economic viability. Funding for both these pillars happen through the channel of European Agriculture Guarantee and Guidance Fund (EAGGF) of the EU.