Common Agricultural Policy by European Union

leafy vegetable Agricultural Policy by atomic number 63an weddingThe common Agricultural Policy ( toughie) is a form _or_ system of goernment, set forth by the European union (EU). It withal comprises of a set of rules that control the manufacture, trade, and affect of farming(a) products. The exhaust hood currently accounts for near fifty per centum of the EU budget, however, this number continues to abate over the years. The detonating device is significant in that it symbolizes Europes budge from sovereignty on a national level to a European level. The pennant is funded by the European Agricultural focal point and Guarantee stemma (EAGGF).This fund is allocated into two different sections, the Guidance section and the Guarantee section. The Guidance section is unrivalled of the structural funds, which contributes to the structural improvements in agriculture and the information of farming(prenominal) beas the Guarantee section funds economic consumptions conc erning the common organization of the securities industrys. stock taxes, manufacture taxes, and portions of each extremity states Gross National Product (GNP) also finances the detonator.The Treaty of Rome, in July 1958, formed the foundation for a integrate Europe via the implementation of the general objectives for the CAP. The CAP was established as a means of rectifying the deficit in solid food proceeds within Europe by dint of supporting internal prices and incomes (Blair 123-124). The CAP succeeded in realizing its initial goals of change magnitude yield and productivity, stabilized markets, secured supplies, and farmer protection. However, the system included problems, which became appargonnt as the community of interests established a surplus for most of its rude products. first-year, the CAP emergenced sidetrack beyond the markets need via the guaranteeing of prices through intervention and production aids. Second, the very success of the Cap caused tension wit hin the Communitys trading partners as subsidized trades affected the market, and thirdly, the desire to produce more food brought with it purlieual damage to received regions (Blair 123-4).The legal base for the CAP is defined in Articles 32-38 in Title II of the EC Treaty, in which, Articles 33-34 form the staple fibre foundation for the CAP. Article 33 lists the objectives of the CAP as a means, to increase verdant productivity by promoting technical progress and by ensuring the balance development of agricultural production and the optimal utilization of the factors of production, to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture, to stabilize markets, to plug the availability of supplies, and to ensure that supplies reach consumers at reasonable prices (europa.eu.int).Through Article 34 came the creation of the rough-cut Organization of the Agricultural Markets (COM). These COMs were to take on angiotensin converting enzyme of three different forms, depending on the product. They successfully eliminate obstacles to intra- unification trade man also keeping a common customs barrier with admire to countries outside the Union. Results of the COMs include a unified market in which products mint freely between nations, community preference, in which EU products be unendingly given preference, price advantage over imported products, and financial solidarity in which all expenses by the CAP are covered by the Community budget.The CAP has had a long history of reform, and is nowhere near perfect. The main(prenominal) attempt of improvement came just ten years after its operation. In 1968, the Mansholt Plan in which he aimed at rationalizing farming with the community, giving farmers an nice income and reducing the burden of subsidies in the economy was put into effect in an attempt to cut the number of people in the agriculture stage business a nd to promote more efficient means of agricultural production. In 1972, the all-encompassing food surpluses were targeted through the creation of structural measures designed to modernize European agriculture. This attempt at reform is generally regarded as a nonstarter because numerous of the problems it tried to fix were still left unchecked. In 1983, a publication was released entitled, The Green Paper, which sought to balance the on-going differences between supply and supplicate through improvements in production. In 1988, the European Council agreed on confused reform measures. The agricultural expenditure guideline, express the percentage of CAP expenditure in the complete budget. In 1991-92 the future of the CAP was addressed through what has been called, The MacSharry Reforms in which the reforms included the cutback of agricultural prices to make the products more competitive, compensation for farmers that incurred a loss in income, and environmental protection. With the positive effects on European agriculture, the reform of 1992 was generally regarded as successful. However, international trends, the amplification towards Central and eastern Europe, the preparation of the single currency causing budget constraints, the increasing conflict of products from non- atom countries, and a new round of World Trade Organization negotiations obligate further adaptation of the CAP (europa.eu.int). In July 1997, Agenda 2000 was created to address some of the important issues facing the EU and the CAP. the reinforcement of the competitiveness of agricultural commodities in domestic and world markets were the key focuses of this new agenda , the promotion of a fair standard of living, the creation of extra sources of income for farmers, a new rural development insurance policy, revamped environmental considerations, better food quality and safety, and the simplification of CAP legislation.The European Unions common agricultural policy protects and su bsidizes agriculture so hard as to bring serious social losses to the Economic Union. The policy creates inadequacies in the agriculture orbit as fountainhead as early(a) sectors of society much(prenominal)(prenominal) as manufacturing, textiles, and good industries. Furthermore, there pass water been many an(prenominal) economic consequences of the CAP, including the high level of protection, the burdens on consumers, taxpayers, and the EU budget, environmental damage, the upon to international trading relations, and the failure to raise farmers incomes (Howarth 4).There have been a number of negative effects on the European Union countries. First and foremost, the Common Agricultural Policy has kept agricultural prices in the member countries above world market prices. The CAP has get alongd production of certain products to the extent that net importers of these products have become net exporters (Rosenblatt 9). Also, the CAP has contributed to bragging(a) agricultural net export or stock-building by the European community. This has contributed to the CAP hindering the economies of the EU member countries. Higher food prices, which the CAP causes, and which return hardest on the least well off, hinder economic development and reduce international competitiveness and EU employment. Consumers lose twice under this policy since they have to pay higher(prenominal) prices for their good and pay taxes to subsidize the agricultural sector.The CAP has also led to inefficiencies in production and the European Unions total budget. The European Unions expenditures on agriculture consume roughly 45 percent of their total budget (Rosenblatt 36). The expenditures are paid to keep farmers from letting farming go idle, and there is no condition on what types of crops are to be grown on this land. infra the Common Agricultural Policy, farmers tend to reaping more profitable crops on land that is non as fit for their growth. For example, producers have switc hed over from producing wheat and oil seeds to cover because the EU has such a high price support for it. This causes the market to go from superfluity supply to excess demand, and the producers are becoming a net exporter of butter (Pugel 312). Thus, farmers may actually grow crops for which production tolls are not covered by the prevailing market prices, but payments make production of these crops profitable to them.The CAP has also caused concern for the environment as well as concerns for the economy. Because of the subsidies provided to farmers, they have the incentive to produce more agricultural products because they leave receive more money. The CAP price policies have encouraged intensifier farming and the overuse of antibiotics, pesticides, and nitrates. This has put a strain on the environment and has concerned the people of the European Union. The policy did not foresee farmers overproducing and over using chemicals, but this has become an indirect terms created b y the policy. Europeans are also concerned with food safety because of farmers using so many chemicals in production. Farmers have been getting away with using the chemicals and unsafe practices because of the limited food safety regulations. Policymakers believed that high price supports would lead to higher food safety and quality. High support prices do not increase any food safety or quality indeed, minimum prices and intervention guarantees encourage low quality and standardized produce (Consumers in Europe group).Under the CAP, the European Union countries have shifted from net importers to net exporters of food products. With the EU subsidizing the agricultural sector so heavily, as to raise some sectors, such as non-grain crops, to eight times larger than it would normally be at (Borrell 18). This has drawn resources and labour out of other sectors of the economy and into the agricultural sector because of the subsidies. These costs and resource misallocation reduce the tot al output and income of the European Union (Borrell 18). Borrell charts the percentage changes in specific industries due to the CAP in the EU. For example, the CAP has caused negative changes in the following industries construction and utilities are take down one percent, the service industry is down two percent, the manufacturing sector in down almost five percent, and other primary products are down almost six percent (Borrell 20). This information demonstrates that CAP is taking away resources from these service type industries and placing it in the agricultural sector. The transference of these resources is coming at the cost of the consumers, taxpayers, or society as a whole.The effects of the EU Common Agricultural Policy have not just altered the European Unions economy, but it has also restructured other economies throughout the world. The CAP has caused farmers to produce a surplus of agricultural goods in the EU. This has led to dumping of these products into other coun tries. As a result, importing countries have shifted away from producing agricultural goods to goods such as manufacturing, construction, services, and other primary goods. The coupled States and Canada have experience a decrease in agricultural production due to the CAP. Combined, the United States and Canada have experience a decrease of approximately 8.1 percent across primary agricultural goods (as much as 13 percent for non-grain products to as low as 2.9 percent for meat products) (Borrell 23). Also, with cropping exports down between 26 and 45 percent, this shows implications that output has been dropping in the cropping sector. The effects of the CAP have also shifted resources in Australia and New Zealand from agriculture to other primary industries. These countries have experienced an expansion in the mining and forestry industries of 7.5 percent (Borrell 21). These examples display how the CAP has suppressed exports of agricultural products and has led to the allocatio n of resources into other industries in other countries.It is apparent that the Common Agricultural Policy has been and is causing problems not only in the European Union, but it has also been creating problems in the rest of the world. What the CAP has effectively make to the European Union is that it has caused it to become a net exporter of agricultural products when it should be a net importer of these goods. The EUs policy has changed the world markets for agricultural goods and has imposed significant costs to the EUs consumers and taxpayers. Consumers and taxpayers in the EU bear most of the cost of 70 to 80 million US dollars a year, which is used to increase farmers incomes. The taxpayers and consumers are responsible for this increase in cost, which in turn causes an increase in unemployment. The CAP was responsible for a loss of one million jobs in the EU manufacturing sector alone. The EU unemployment rate is currently around 10 percent, which is currently 40 percent hi gher than the OECD (Organization for Economic Co-Operation and Development) average (Borrell 20). It is glide by that the Common Agricultural Policy is responsible for increases in unemployment, increases in taxpayer cost and consumer burden, drops in farmer income, and harm to international relations. If the CAP were not implemented, many of these issues would be alleviated.There have been significant losses to the European Union as a whole because of the CAP. To understand, however, what this does to an individual country, an analysis of Britain experience must(prenominal) be looked at. In 1973, Great Britain entered the European Community and, therefore, accepted the Common Agricultural Policy (CAP). The acceptance of the CAP caused Britain to move from an agricultural market of free trade and cheap food, to an agricultural market that became the pawn of the European Unions protectionism (Harvey 2). The CAPs main goal was, to keep agricultural markets stable, ensure that farmer s earn a fair living, and provide consumers with affordable food supplies (Think quest Library 2). The CAP achieved many goals it set out to accomplish. The very generous price supports to farmers and technical innovation have caused surpluses that are not being offset by a decreasing demand.The CAP has run into criticism in new-made times by both British consumers and taxpayers alike, and many citizens and even farmers are calling for its reform. One recent event that caused the European Union to rethink the restrictions of the CAP was the outbreak of mad cow disease in Britain. British cattle that were infected by mad cow disease experienced nervous system breakdown and eventually death. The beef industry suffered in Britain and many of the cattle had to be put to death because they were not fitted to eat. Therefore, the European Union, in 1996, had to impose a British beef export ban (Barclay 21). The ban, and the fall in beef consumption in the UK market, caused the United Ki ngdom cattle market to lose sales totalling 800 million pounds (Barclay 22). The British were not allowed to export tainted beef to member countries and many member countries feared to import any British beef (Barclay 22).The CAP has hurt Britain in more ways than one. British consumers have been burdened by higher domestic agriculture prices because of CAP policies when they could easily go buy the alike(p) product cheaper in the world market. The taxpayers in Britain have been burdened by taxes the European Union imposes to finance subsidies to farmers. Undoubtedly, the United Kingdom would still have to face the mad cow dilemma regardless of its prior foundation in the Union. However, the British would be able to develop a coloured policy in which they would be free from the strict requirements of the European Union.