EU Common Agricultural Policy Essay Example | Topics and Well Written Essays - 1750 words

EU Common Agricultural Policy - Essay Example onsumer market.5 While CAP is based on the welfare of rural communities and areas, the fact is that it is not a realistic policy and is the source of economic problems that can only be resolved through the reform of CAP and the liberalization of EU agricultural trade policy. The EU CAP is a source of several problems. In the first place, creating a common agricultural policy means reforming the agricultural strategies and policies which are used in twenty-five member countries. Establishing and implementing a common policy for the Western European countries was difficult but the enlargement of the European Union to include Eastern European countries made it very difficult. It did not just mean that the new member countries had to abide by CAP policies but that they had to change their agricultural policies and strategies in order to be able to adhere to CAP.6 A second important problem is the economic consequences of CAP. As a result of CAP, the price of agricultural goods was raised and, as mentioned earlier, these prices were not related to those on the global market. In addition, to make sure that cheaper agricultural goods did not enter the EU market and compete with EU agricultural produce, levies were imposed on imported goods to make up the price difference. As the price of agricultural goods went up to their highest levels and because EU agricultural producers were protected from competition, there was a greater incentive to produce and the EU eventually became the world's second largest agricultural exporter. 7 The problem developed when the price of agricultural goods dropped on the international market but the price of EU agricultural goods remained high. This meant that EU farmers continued to produce surplus and that the EU had to continue to support its farmers. In 1988, 62% of the EU's budget went to agricultural goods.8 Th is was a serious economic problem and the EU could not any longer support CAP under these circumstances. Its economic cost was too high. The identified problems are serious. The first refers to the difficulties of implementing a common agricultural policy and the second to the difficulties of economically supporting these policies. Therefore, for the European Union leaders it was clear that these problems could only be solved through the reform of CAP. 3 Reform Policies CAP reforms were first implemented in 1988. The first set of reforms focused on limiting agricultural outputs and,