European Economic Integration: Limits and Prospects

By Miroslav N. Jovanovic; Alexis Jacquemin | Go to book overview

4

COMMON AGRICULTURAL POLICY

I

INTRODUCTION
During the past decades agriculture has been a statistically shrinking economic sector in the developed market economies. The share of agriculture in the GNP of the EU was 3 per cent, while its share in the region’s employment was less than 6 per cent 1 in 1994. Agriculture was employing around 20 million people at the time of the creation of the EU. More than three decades later, the number of people directly employed in agriculture was a little over 8.5 million. If one adds the dependent family members to those that work in the farm sector, the number relying on this sector for their livelihood is around 40 million people. Apart from the customs union, the Common Agricultural Policy (CAP) is often described as the genuine economic policy of the EU, as well as one of its greatest achievements in economic integration—and, perplexingly, as its weakest link!This part of the book is structured as follows. As agriculture is a special economic activity, section II explains why it is so. The following two sections cover the objectives and the implementation of the CAP, respectively. Section V examines the operation and consequences of the CAP. Because of the controversy, reforms of the CAP are considered in section VI. Before our conclusion, there is a separate section on the Common Fisheries Policy.
II

DISTINCTIVENESS OF AGRICULTURE
Since the time of its creation, not only has the relative share of those employed in agriculture decreased in total, but the share of agriculture in the GNP has also declined in the EU. If that is so, why does agriculture command such a prominent position in the economic and political life of many countries, as well as in the EU? 2 The answer to this question can be found in at least seven elements:
One of the basic and oldest reasons for the special attention given to the agricultural sector of the economy is strategic. Governments supported domestic food production in order to ease the situation in the country in the event of war, crisis or foreign economic blockade. Linked to this consideration is the fact that farmers are scattered all around the country and that the peasants (at least used to) have larger families in order to get cheaper labour. In the event of war, this segment of the population could give a valuable contribution both to manpower and to the coverage of the national territory. In modern times, farmers are the part of the

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European Economic Integration: Limits and Prospects
Table of contents

Table of contents

  • Title Page i
  • Contents vii
  • Figures viii
  • Tables ix
  • Foreword xi
  • Preface xiv
  • Acknowledgements xviii
  • Abbreviations xix
  • 1 - The Origin of the European Union 1
  • 2 - Monetary Policy 42
  • 3 - Fiscal Policy and the Budget 71
  • 4 - Common Agricultural Policy 98
  • 5 - Competition Policy 130
  • 6 - Industrial Policy in Manufacturing and Services 168
  • 7 - Trade Policy 215
  • 8 - Regional Policy 287
  • 9 - Capital Mobility 309
  • 10 - Labour Mobility 333
  • 11 - Social Policy 342
  • 12 - Environment Policy 353
  • 13 - Transport Policy 361
  • 14 - Conclusion 367
  • Bibliography 371
  • Index 382
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