The problems facing Great Britain as a result of the Common Agricultural Policy

John S. Marsh

European Review of Agricultural Economics, 1973, vol. 1, issue 1, 47-62

Abstract: This article reviews some of the main problems facing the United Kingdom as a result of the operation of the Common Agricultural Policy (C.A.P.). It stresses that the policy challenges deeply held British attitudes toward the level of food prices and to traditional Commonwealth exporters of food. The C.A.P. involves a set of arrangements ill-suited to British needs and suggests that in an enlarged community the pooling of power may frustrate the legitimate political interests of the U.K. The article discusses four types of economic problems which result from the application of the Common Agricultural Policy. Strain will be placed on the balance of payments both by British contributions to the Community's budget and by the higher prices Britain will now have to pay for imported food from other member countries. It is questioned whether Britain will be able to sustain a rapid rate of economic growth under such a handicap. The high price of food to consumers may, it is suggested, have inflationary consequences for the U.K. economy. This is not simply a question of the direct impact of high food prices on the cost of living but is because of secondary effects which may arise from demands for higher wages. British imports from other countries seem likely to be reduced by the C.A.P. As a result there is a probability that U.K. exports to non-EEC countries will fall. Such losses must intensify the balance of payments problems arising from the operation of the C.A.P. The economic condition of the British agricultural industry as a whole should not suffer as a result of applying the C.A.P. Most farmers will be better off, but for some, horticultural growers especially, difficult adjustments will have to be made. From a Community point of view, however, the C.A.P. may give an undesirable stimulus to increased farm output in Britain.

Date: 1973
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