The Life of the Common Agricultural Policy

  • Edward Nevin
Chapter

Abstract

The Treaty of Rome made little more than a passing reference to the delicate matter of how the common agricultural policy was to be financed. Article 40 contained the vague provision that ‘one or more agricultural orientation and guarantee funds may be established’. (The word ‘orientation’ is Eurojargon for guidance or structural.) Difficult though it may be to comprehend with the benefit of hindsight, there was a presumption that the CAP would be broadly self-financing. The theory was that the price-stabilisation function would lead to profits and losses which would balance out over a period of years. The intervention agencies would need funds to absorb surpluses when market prices were tending to fall below target prices; these would be recovered, however, as they disposed of those surpluses in due course when market prices were tending to rise above the target. Indeed, by buying at relatively low prices and selling at relatively high prices the intervention agencies should have been profit-making concerns. So far as the long-term structural side of the policy was concerned, sufficient finance would be raised through the proceeds of the variable levies on imports.

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Further Reading

  1. Buckwell, A. (ed.), The Costs of the Common Agricultural Policy (London: Croom Helm, 1982).Google Scholar
  2. Demekas, D. et al., ‘The effects of the CAP: a survey of the literature’, Journal of Common Market Studies, Vol XXVII, No. 2, December 1988.Google Scholar
  3. Duchene, F. (ed.), New Limits on European Agriculture: Politics and the CAP (London: Croom Helm, 1985).Google Scholar
  4. European Commission, The Community’s Agricultural Policy and its Reform, 4th edn (Luxembourg, 1987).Google Scholar
  5. Harris, S. et al., The Food and Farm Policies of the European Community (Chichester: John Wiley & Sons, 1983).Google Scholar
  6. Harvey, D. and Thomson, K. J., ‘Costs, benefits and the future of the common agricultural policy’, Journal of Common Market Studies, Vol. XXIV, No. 1, September 1985.Google Scholar
  7. Hill, B. E., The Common Agricultural Policy: Past, Present and Future (London: Methuen, 1984).Google Scholar
  8. Marsh, J. S. and Swanney, P. J., Agriculture and the European Community (London: Allen & Unwin, 1980).Google Scholar
  9. Strasser, D., The Finances of Europe (Brussels: European Perspectives Press, 1981).Google Scholar

Copyright information

© Edward Nevin 1990

Authors and Affiliations

  • Edward Nevin
    • 1
  1. 1.University College of SwanseaUK

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