The Common Agricultural Policy(CAP) of European Community is facing a crisis from budgetary, political conflict and international trade. CAP was successful for the producer's protection and self-suffiency at the sacrifice of consumers and foreign prod...
The Common Agricultural Policy(CAP) of European Community is facing a crisis from budgetary, political conflict and international trade. CAP was successful for the producer's protection and self-suffiency at the sacrifice of consumers and foreign producers.
This paper discussed the background and the evolution of European agricultural policy and found out problems concerning CAP. And the followings are suggestions to settle those problems and to reform the CAP:
First, reduction of commom price. Second, revitalization of market principle.
Third, maximum guarantee threshold/coresponsibility levies.
Fourth, direct subsidy(deficiency payment) is better than indirect subsidy(variable levies).
Fifth, new structrul policy by reduction of cost.
Sixth, in case of wheat, production quota and two-tier plan are better than price reduction and coresponsibility levies.
Seventh, national aid/or communitary budgetary reduction for the exports of LDCs.