The Economic and Historical Foundation of the Common Agricultural Policy in Europe

The Common Agricultural Policy (CAP) was founded in the 1950s with price support as the main policy instrument. Despite massive criticism from both within and outside the EU, price support remains the backbone of the CAP. This paper argues that the choice of price support was logical viewed in both historical and economical perspectives, and gives three reasons for this. First, even though talks on agricultural integration began immediately after the war, the CAP was a result of general economic integration in Europe rather than the reason for it. Second, the structure of the CAP was determined by the agricultural policies of the six founding countries. The third and last reason is related to the economic characteristics of running a price support system. The six countries together were net importers of agricultural products and could thereby benefit from import levies. Price support is paid for by the consumers, and European consumers had been paying high prices for food for a long time. This, together with a high level of economic growth in Europe in the 1960s, made it easier for the governments to choose this policy rather than a policy based on direct payments financed by taxpayers that would have put pressure on the national fiscal budgets of the six countries.agricultural policy, European economic history, agricultural history, Agricultural and Food Policy, Q18, N44, N34,

The Economic and Historical Foundation of the Common Agricultural Policy in Europe

The Common Agricultural Policy (CAP) was founded in the 1950s with price support as the main policy instrument. Despite massive criticism from both within and outside the EU, price support remains the backbone of the CAP. This paper argues that the choice of price support was logical viewed in both historical and economical perspectives, and gives three reasons for this. First, even though talks on agricultural integration began immediately after the war, the CAP was a result of general economic integration in Europe rather than the reason for it. Second, the structure of the CAP was determined by the agricultural policies of the six founding countries. The third and last reason is related to the economic characteristics of running a price support system. The six countries together were net importers of agricultural products and could thereby benefit from import levies. Price support is paid for by the consumers, and European consumers had been paying high prices for food for a long time. This, together with a high level of economic growth in Europe in the 1960s, made it easier for the governments to choose this policy rather than a policy based on direct payments financed by taxpayers that would have put pressure on the national fiscal budgets of the six countries.Agricultural Policy, European Economic History, Agricultural History, Agricultural and Food Policy, Q18, N44, N34,

Landbrugets indkomstproblem - dogme eller realitet?

When it comes down to reality the political objective of securing reasonable income to farmers succeeds all other objectives in agricultural policy making. To be able to evaluate policy and design new policy it is of vital importance to know the overall income situation and how the agricultural sector work. This paper conclude that Danish farmers from 1973 to 2000 have had a reasonable relative income. The reason for this is not support but instead the possibility of dynamic structural adjustment on one hand and on the other hand a sound general economic policy which have made it possible for agriculture to be a integrated part of the overall economy. The traditional agricultural policy pursued by OECD countries based on direct and indirect price support have only in the very short run supported income. In fact the conclusion is clear traditional policy creates further mis-allocation of resources and thereby slowing the needed structural adjustment process that could help securing income.Agricultural and Food Policy,