History Of Common Agricultural Policy Economics Essay

By July 21, 2017 Economics

The European Union is the inter-regional integrating brotherhood of provinces with strong supranational elements, manifested in the development and execution of common policies in the countries of trade, agribusiness, conveyance and others. One of the important policies -is Common Agricultural Policy, chiefly named as ( CAP ) , which provides a figure of commissariats, that regulates the production and processing of agricultural merchandises and selling. Common agricultural policy belonging to the two cardinal countries of EU: Internal Market and Economic and Monetary Union.

History of Common Agricultural Policy and the period of its formation.

The policy was foremost announced during the Venice conference in 1956, between the caputs of the provinces.

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Led by the conference of Member States in Stressa ( Italy ) in 1958 where the foundations and chief rules of CAP were adopted. The 38-47 division of the Rome

pact had been approved as the basic rules of the CAP with its tools,

common market organisation, direction ordinances and chief aims.

The reassertion of rules and tools of CAP happened in 1962 and valid until now.

The important function of doing determinations is played by the Council at the degree of Curates of Agriculture.

Purposes and aims of CAP.

On the footing of the Rome Treaty ( 1957 ) , Article a„- 39, Title II, Agriculture.

To utilize rational and optimum factors of agricultural inputs, peculiarly of import is the rational usage of technological advancement and labour.

To supply a good life criterion for husbandmans, to increase income of individuals employed in agribusiness.

To stabilise markets.

To utilize the available beginnings of supplies.

To guarantee that supplies reach consumers at sensible monetary values.

Principles of CAP.

There are 3 rules which were agreed between provinces -members of CAP policy:

A individual market for agricultural merchandises ( free trade between members and understanding to the purchase monetary value of agricultural merchandises ) ,

Community penchants ( favours and benefits for local merchandises, the abolishment of limitations on internal trade, the debut of unvarying duties throughout the EU ) ,

Fiscal solidarity ( CAP is funded by redistribution through the general budget through the European Fund warrants and orientation ) .

The way of structural policy.

Organization of production ( scientific discipline and engineering, the educational degree of workers ) .

Optimization of trade flows ( grants of assorted events ) .

Rural development.

Scheme to modulate markets.

Guaranteed monetary values for the merchandises ( Corn sugar, milk, fruit veggies, porc, vino ) ,

Quota system ( Milk quota ) ,

Bonus system ( Olive oil, cheese-production ) .

CAP funding.

CAP is financing by the European Agricultural Guidance and Guarantee Fund.

Two chief parts:

Guidance subdivision: Structural policy, rural development and funding operations in agribusiness.

Guarantee Section: Support, funding of market intercessions.

New legal model of CAP:

Two chief financess:

aˆ? European Agricultural Guarantee Fund – Direct Payments and interpret markets.

aˆ? European Agricultural Guidance and Guarantee Fund ( 2007: were changed on EAGF and EAFRD ) – promotes rural development and agricultural market organisations.

( See Financial EAGF studies: 2007, 2008, 2009 ; Financial EAGGF studies: 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006. hypertext transfer protocol: //ec.europa.eu/agriculture/fin/finrep/eagf/index_en.htm )

Cap reforms ( 1984, 1992 ) .

Reform 1984 stands for:

A figure of goods ( consisting about 1 / 3 of all production sectors ) , EEC governments have established a ceiling of production, at which the husbandman could no longer number on selling at a guaranteed monetary value.

Adjustments which were made by the pricing policy of the EEC, including decreased monetary values paid for goods i? accumulated big excesss.

Community to set up the import of certain types of agricultural merchandises from 3rd states.

Reform 1992 stands for:

Enhance of the fight of European husbandmans.

Production in line with market demands.

Support of the most successful husbandmans.

Protection of the environment.

Development of the productive capacity of the small town.

The consequences of the reforms:

Decreased guaranteed monetary values for basic nutrient.

Direct payments to manufacturers.

Systems Prices.

Compensation for loss of income due to the decrease of cultivated countries.

New reforms: ( 2000, 2003 )

Reform 2000 stands for:

The bound of budgetary disbursement on agribusiness policy in the period before 2005.

Another cut in guaranteed monetary values.

Direct support to husbandmans.

Environmental protection, nutrient security and agricultural natural stuffs.

Program SAPARD ( Particular Accession Program for Agriculture and Rural Development ) .

The readying of farms and agricultural endeavors in CEE states to EU accession.

Reform 2003 stands for:

Single payments to husbandmans ( individual farm payments ) irrespective of the volume of production, but environmental criterions and guaranting the safety of nutrient.

Strengthening policies for rural development.

Decrease in direct payments to big farms.

Constitution of the European Agricultural Fund for Rural Development ( European Agricultural Fund for Rural Development ) and the European Agricultural Fund Guarantees ( European Agricultural Guarantee Fund ) in conformity with the ordinances on the funding of the CAP on June 21, 2005.

CAP Enlargement.

There are several expansions, which made CAP to ensue new economic and societal challenges. New member provinces have perfectly different degrees of agribusiness, economic system and impact on CAP in whole. This expansion provided the division of agricultural sector between the new and old member provinces. The chief purpose of EU is to come up with the states for policy execution.

Old members of CAP: France, Germany, Italy and Benelux states.

Recent members of CAP:

2004: Hungary, Cyprus, Latvia, Lithuania, Poland, Estonia, The Czech Republic, Malta Slovakia, Slovenia.

2007: Bulgaria, Romania.

Future possible members: Macedonia, Turkey, Croatia.

Last two expansions led the CAP to reconstruct its ego, supply more public involvement and to work in better services.

( See new member provinces influence on CAP hypertext transfer protocol: //europa.eu/legislation_summaries/agriculture/enlargement/index_en.htm )


Five guiding rules:

European Commission published a study under the header of Common Agricultural Policy of the European Union.

New steering rules study stands for:

Targeting on public goods

Environmental focal point

Market orientation

Global nutrient security


( See An Ambitious Reform of the Common Agricultural Policy: hypertext transfer protocol: //www.reformthecap.eu/declaration )

This five principals purposes to better dynamism and fight of European agribusiness sector and contribute to the creative activity and execution of the effectual development scheme of EU until 2020.

Three guide lines of a New CAP:

1 ) Elimination of most important defects of the Common Agricultural Policy by

important alterations.

2 ) The building of environmentally friendly, just, efficient and effectual incorporate agricultural political relations.

3 ) Focuses on market support and income for activities belong to environmental protection and clime.

After treatment, the three landmarks, The European Commission will subject to the official proposals to reform the Common Agricultural EU policies.

For all three benchmarks the Commission plans maintain the current system of “ two pillars ” :

The “ First pillar ” : Direct subsidies and market-oriented events based on clear regulations laid down at EU.

The “ Second pillar ” : Aimed the development of rural countries.



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