The CAP and the Enlargement of the EU

Table of Contents

1. Introduction

2. A brief look on history

3. Current Situation
3.1 The way it works
3.2 Advantages and Disadvantages
3.3 The cost of the CAP

4. Case Study
4.1 The Wheat Industry
4.2 Eastern Europe – on the Example of Poland
4.3 Effects on the Wheat Industry on the Example of Poland

5. Conclusion

6. References

1. Introduction

This report will describes the influence of the enlargement of the EU on the Common Agricultural Policy ( CAP ).

I have chosen this topic, because it is most important, due to the huge influence of the CAP on the EU`S financial budget. Also the future for the CAP is very uncertain and this will have a large impact on the European farmers.

For the successful completion of this work I had to understand why there is an CAP and how it works, so that I could think about the future of it.

First I gave a short look on history, this is very important to understand the CAP.

I considered that having a short look on how the CAP works would be a very important step to analyse the impact of the Enlargement.

After having analyzed how the CAP works I had an closer look on the costs of the CAP and discussed the advantages and disadvantages.

Then I am giving some facts and figures about the wheat industry and in conclusion to that I had a closer look on eastern Europe on the example of Poland.

Furthermore I analyzed the impact of the enlargement on the Wheat industry

The last part of the report is a short conclusion about this topic.

2. A brief look on history

In history Europe was often struck by famines. When Europe was nearly struck by a famine after World War 2, the food security policy became a priority for the national governments. Very influential farmers lobby emerged all over Europe, and during the shift from the primary to the secondary industrial sector, the relative income of the farmers declines. So the agricultural became in the 1950s the most heavily protected and subsidized sector.

When the European Community was founded in 1958 the agricultural policy became one of the most important issues. There was some resistance against this, but in the end, the supporters of this policy, like France, won.

The Objectives of the CAP are : - increase agricultural productivity

- ensure a fair standard of living for farmers
- stabilize agricultural markets
- guarantee regular supplies of food
- ensure reasonable prices for consumers

( Article 33 TEC )

It was decided that the agricultural market should not be liberalized, and be controlled by the newly formed EC, replacing the national organizations. Soon after that the now called Common Agricultural Policy ( CAP ) got some additional guidelines.

These are: - A single market: Agricultural products should be able to move freely throughout the EC

- Community Preference: Priority should be given to EC produce over that of other countries
- Financial Solidarity: The cost of the policy should be borne by the EC rather than by individual member states

An unofficially fourth statement also exists. Farmers should receive an income equivalent to that received by other sectors of society. There were several attempts to reform the CAP, but these principles were sacrosanct.

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