The Economic Principles of European Integration

By Stephen Frank Overturf | Go to book overview

CHAPTER 7
Common Agricultural Policy

The Common Agricultural Policy of (CAP) of the EC was established as the result of a number of historical accidents and political compromises coincidental with the foundation of the Common Market. An important ingredient of the first type was the fact that, although the levels differed, the kind of support given by the continental countries to agriculture was generally of the price support rather than direct subsidy variety. Thus, although there was a need for extensive harmonization of support, the basic structure was almost preordained. A further consideration was that, even if segments of the Community had wished to introduce a type of subsidy system for the farm sector, the compromise involved in dealing with sovereign nations made such a plan much harder to agree upon than it would have been, say, in a more federal system of decision making. A final influence was that some Community resolution of the agricultural question was required, since France would have felt discriminated against in a common market that had free trade in industrial but not agricultural goods. As it turned out, the combination of low (by prior West German standards) intra-EC but high (by world standards) internal grain support prices was just the inducement necessary to ensure French participation.


CAP OBJECTIVES AND POLICIES

The objectives of the Common Agricultural Policy are many. They include providing food to consumers at low prices, maintaining and encouraging a liberal trade policy, and encouraging transition to a productive and efficient agricultural sector. These goals square with the general competitive goals of the union, that is, to

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