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Problems arising from the Common Agricultural Policy

Title: Problems arising from the Common Agricultural Policy

Term Paper , 2006 , 9 Pages , Grade: 2,0

Autor:in: International Economics M.A. Kenân Özkara (Author)

Economics - International Economic Relations
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Summary Excerpt Details

Das wirtschaftliche Zusammenwachsen innerhalb der Europäischen Union (EU) der letzten Jahrzehnte sowie die Verwirklichung des europäischen Binnenmarktes im Jahr 1993 zwangen sowohl die Mitgliedstaaten als auch die Unternehmen, sich neuen Herausforderungen zu stellen. Durch die Öffnung der nationalen Märkte sahen und sehen sich die Staaten und ihre heimischen Unternehmen einem steigenden Wettbewerbsdruck gegenüber, den sie mitunter mit unrechtmäßigen Mitteln zu unterlaufen versuchen: Wettbewerbsbeschränkende Absprachen zwischen Unternehmen auf der einen Seite und staatliche Maßnahmen auf der anderen Seite vermögen den Wettbewerb gleichermaßen zu beeinflussen.
Um die kompetitiven Marktstrukturen aufrechtzuerhalten, bedient sich die EU daher zweier Instrumente: Während die im Jahre 1990 erlassene europäische Fusionskontrollverordnung Wettbewerbsverfälschungen auf Unternehmensebene effektiv entgegenzuwirken versucht, regelt und überwacht die Beihilfenkontrolle die Beihilfenvergabe durch die Mitgliedstaaten. Gegenstand dieser Hausarbeit wird eine nähere Untersuchung und kritische Betrachtung der Beihilfenkontrolle der EU sein.
Einführend wird in Kapitel 2 zunächst der zentrale Gegenstand der Beihilfenkontrolle - sprich die Beihilfe - genauer betrachtet, bevor in gebotener Kürze ein Überblick über mögliche Vor-und Nachteile der Vergabe gegeben wird.
Gegenstand des dritten Kapitels ist die Beihilfenkontrolle durch die Europäische Kommission. Zunächst werden die Zielsetzungen sowie die Kriterien für die Rechtmäßigkeit einer Beihilfe dargestellt. Daraufhin sollen kurz das Verfahren der Beihilfenkontrolle sowie die rechtlichen Schranken skizziert werden, wobei weniger einzelne Details besprochen als vielmehr die Grundzüge aufgezeigt werden.
In Kapitel 4 erfolgt eine kritische Betrachtung der Beihilfenkontrolle und ihrer wichtigsten Problemfelder. Dabei werden zunächst die Überlastung der Kommission sowie die unzureichende Transparenz sowohl auf Seiten der Mitgliedstaaten als auch auf Seiten der Kommission betrachtet. Anschließend wird die Dimension politischer Zielkonflikte dargestellt, wobei auch ein kurzer Blick auf politökonomische Aspekte erfolgt. In einem letzten Punkt wird die Problematik unterschiedlicher wettbewerbstheoretischer Leitbilder innerhalb der EU und ihre Bedeutung für die Beihilfenkontrolle aufgezeigt, bevor in Kapitel 5 abschließend ein kurzes Fazit aus den vorangegangenen Überlegungen gezogen wird.

Excerpt


Table of Contents

1. Introduction

2. Problems of the CAP

2.1. Financial and disposal problems

2.2. Unequal distribution of benefits

2.3. Environmental damages

3. Reforms

4. Evaluation of today’s CAP

Objectives and Research Focus

This paper examines the ongoing challenges associated with the European Union's Common Agricultural Policy (CAP). It investigates the contradiction between the policy's primary objectives and its actual socioeconomic and environmental outcomes, analyzing how the CAP impacts European markets, international trade, and the agricultural sector's structure.

  • Analysis of financial burdens and disposal issues caused by excess supply.
  • Evaluation of the unequal distribution of subsidies among small and large-scale farms.
  • Assessment of the environmental consequences resulting from intensive land use.
  • Review of historical and recent reform efforts, including the decoupling of subsidies.
  • Discussion of the impact of EU enlargement and future agricultural policy challenges.

Excerpt from the Book

2.1. Financial and disposal problems

Initially, the EU was a net importer of most food. So it could support prices via import tariffs. But due to technical progress and the fact that the CAP rewarded output, farmers extended production. Usually this implies falling prices, but as the EU wanted to protect its farmers, food prices were set above the world price. Facing an excess supply of food, the EU had consequently to act as a “buyer of last resort” and changed from an importer to an exporter between the 1960s and the 1990s (Baldwin/Wyplosz 2004, pp. 220). Nevertheless, the EU remains the world's largest agricultural importer (ERS 1999, p. 5). The intervention causes immediate financial and disposal problems.

Instead of earning import levy revenues, the EU has to spend large sums to buy the excess supply and to subsidize export. In 2005 the EU is expected to spend 46% respectively 49 billion euros of its budget (106.3 billion euros) on aid to agriculture (European Commission 2005). Considering that in 2002 the agricultural sector provided only 4% of jobs (or about 6.7 millions) in the EU15 and about 2% of European output, the high share becomes more striking. In contrast, in CAP’s origin, about 20% (or about 15 millions) of Europeans worked in the agricultural sector and produced about 10% of the EU6 GDP (Jovanovic 2005, p. 209; Zobbe 2001, p. 3). Hence, the high costs are a constant source of friction between supporters and critics of the CAP (particularly between France and the UK).

Summary of Chapters

1. Introduction: This chapter outlines the primary objectives of the CAP as defined by the Rome Treaty and introduces the critical perspective the paper takes on these often contradictory goals.

2. Problems of the CAP: This section details the major complications arising from the policy, specifically addressing financial pressures, the inequitable allocation of benefits, and significant environmental degradation.

3. Reforms: This chapter provides a brief historical overview of the various attempts to reform the CAP, starting from the failed Mansholt Plan to the more recent decoupling of subsidies in 2003.

4. Evaluation of today’s CAP: The final chapter assesses the effectiveness of past reforms, explores the impact of EU enlargement, and considers future challenges including budgetary conflicts and global trade commitments.

Keywords

Common Agricultural Policy, CAP, European Union, Agriculture, Subsidies, Food Mountains, Dumping, Trade Policy, Environmental Impact, Agricultural Reform, Single Farm Payments, EU Budget, Market Stabilization, WTO, Rural Development.

Frequently Asked Questions

What is the core focus of this research paper?

The paper focuses on identifying and analyzing the systemic problems generated by the Common Agricultural Policy (CAP) since its inception, specifically looking at how the policy affects economics, the environment, and social equity.

What are the primary themes discussed in the document?

The key themes include the financial strain caused by agricultural overproduction, the unfair distribution of subsidies among farming entities, the environmental damage caused by intensive farming, and the continuous effort to reform the policy.

What is the central research question?

The research seeks to evaluate whether the CAP achieves its stated goals and to identify the nature of the conflicts and "problems arising" from its implementation within the context of EU institutions.

Which scientific methods are applied in this work?

The paper utilizes a policy analysis approach, reviewing existing economic literature, historical data, and official reports to critique the impact of CAP regulations and reform processes.

What is covered in the main section of the paper?

The main part of the paper covers the specific economic difficulties of the CAP (such as surplus disposal), the socioeconomic implications for small versus large farms, and a detailed breakdown of environmental consequences like land intensification and abandonment.

Which keywords characterize this paper?

Essential keywords include CAP, European Union, agricultural subsidies, dumping, market distortion, environmental impacts, and reform policy.

How does the author describe the transition of the EU regarding food trade?

The author notes that the EU evolved from a net importer of food in the 1960s to a significant exporter by the 1990s, a change that necessitated complex price support and export refund mechanisms.

What impact does the author attribute to EU enlargement on the CAP?

The author argues that enlargement creates massive future conflicts because the new member states have high numbers of farmers but receive significantly lower levels of financial support compared to the EU15 average, making current funding models unsustainable.

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Details

Title
Problems arising from the Common Agricultural Policy
College
Leuven Catholic University
Course
Institutions and Policy of the European Union
Grade
2,0
Author
International Economics M.A. Kenân Özkara (Author)
Publication Year
2006
Pages
9
Catalog Number
V53641
ISBN (eBook)
9783638490368
Language
English
Tags
Problems Common Agricultural Policy
Product Safety
GRIN Publishing GmbH
Quote paper
International Economics M.A. Kenân Özkara (Author), 2006, Problems arising from the Common Agricultural Policy, Munich, GRIN Verlag, https://www.grin.com/document/53641
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