3.1 The Common Agricultural Policy
Since joining the EU, the Swedish Government has endeavoured to realise an agricultural policy that
promotes competitive production based on sustainable production systems to achieve higher economic
benefit and lower budget costs. As reform of the Common Agricultural Policy (CAP) continues, Sweden is
advocating the following principles: (1) agricultural and food enterprise production should be driven by
consumer demand, (2) production should be ecologically and economically sustainable, (3) the EU should
facilitate global food security, including by extending the principles of free trade to agriculture and food
The European Commission resolved in June 2003 to reform the CAP. The central principle of the reform is
that sustainable agriculture should be guided towards increased market orientation. Another element of the
reform is that Member States will be given more influence over how national agricultural policy is drafted.
The European Commission’s basis for the proposed CAP reform was the sustainable development strategy
agreed by the Council of Europe in Göteborg in spring 2001. The overriding objective of the reform is to
make European farmers more competitive based on those fundamental principles. Severing the link
between direct subsidies and production is the most important element of the reform. The single farm
payments (decoupled payments) will control production to a lesser extent and increase market influence.1 A
further advantage of decoupling support is that single farm payments are less trade-distorting. The support
system will be further simplified, thus cutting administrative expenses for farmers and official agencies.
Further reforms within the framework of the CAP are planned for the wine and fruit and vegetable sectors.
The EU is the leader in production of competitive high-quality wines, but there is surplus production of
wine in the EU market that is leading to emergency distillation. The first step S