Economics of the Common Agricultural Policy

Rainer Wichern

No 211, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: The 2003 reform of the Common Agricultural Policy has been assessed as an important reform in the right direction with respect to allocational efficiency and regarding environmental, animal welfare and food safety requirements. From an economic point of view the introduction of decoupled direct payments will reduce distortions in production decisions and, thus improve sectoral efficiency. Several papers have supported this reform. While acknowledging and supporting these views with respect to the 2003 reform, this paper, however, tries to highlight that the overall support level for the agricultural sector remains relatively high and that most of the farm support still stems from market price support. In systematically analysing the main CAP measures and using most recent figures, it is shown that price support - together with quota restrictions and land set aside obligations - is one of the least efficient CAP instrument currently in place. Thus, the success of the 2003 reform does not allow for a position of leaning back. On the contrary, the drive of previous reforms (1992 and AGENDA 2000) with respect to bringing EU prices down to competitive levels need to be kept and perhaps even be further accelerated.

Keywords: Common Agricultural Policy; CAP; reforms; allocation efficiency; agriculture; Wichern (search for similar items in EconPapers)
Pages: 67 pages
Date: 2004-08
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://ec.europa.eu/economy_finance/publications/pages/publication630_en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0211

Access Statistics for this paper

More papers in European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission Contact information at EDIRC.
Bibliographic data for series maintained by ECFIN INFO ().