The New Palgrave Dictionary of Economics

Living Edition
| Editors: Matias Vernengo, Esteban Perez Caldentey, Barkley J. Rosser Jr

The European Union’s Common Agricultural Policy (CAP)

Living reference work entry


The EU’s CAP has changed significantly over the years, largely as a result of international pressure through GATT and the WTO, but it still has the support of farm incomes as its main concern. The old CAP of market price support has more or less been displaced by decoupled income support, in the shape of the Single Payment Scheme. Cross compliance applies, addressing concerns about European agriculture’s multifunctionality; and there is a renewed anxiety about food security. The CAP’s Second Pillar, with targeted support for rural development and environmental protection, plays a subsidiary role.


Agriculture CAP Common Agricultural Policy Decoupled payments EU Farm income Food security General Agreement on Tariffs and Trade GATT Multifunctionality Rural development Second Pillar World Trade Organization WTO 

JEL Classifications

F13 F15 Q18 
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Authors and Affiliations

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