Common Agricultural Policy (CAP)
The Common Agricultural Policy The Common Agricultural Policy is one of the oldest policies of the European Union (EU). It was created in 1962 with setting up of the common market organisations for six agricultural products (cereals, pig meat, eggs, poultry meat, fruit and vegetables and wine). Since then the CAP has changed a lot and continues to change today
The CAP is one of the most important EU policies, agricultural spending accounts for almost 40% of the EU budget.
The Common Agricultural Policy supports farmers through:
- • Direct payments -are provided in the form of income support with the aim to remunerate farmers for delivering public goods such as taking care of the countryside.
- • Rural development measures -addresses the specific needs and challenges facing rural areas.
- • Common Market Organisation -For a number of decade common market organizations measures created a major part of the CAP, governing production and trade of agricultural products. The aim of measures was to stabilize the market, increase agricultural productivity and guarantee a stable income for farmers. The measures covered about 90% of the agricultural production in Europe and were organised in 21 CMOs. The CMOs were reformed into the single CMO regulation that allows the European Union to manage the market, production and trade, of one or more agricultural products. It provides specific policy tools that help improve the functioning of agricultural markets.
Common Market Organisation - Measures including:
- -A set of parameters for intervening on agricultural markets (public intervention and private storage), providing risk management schemes and sector-specific support (e.g. for fruits and vegetables, wine, olive oil sectors, school schemes).
- -Rules on marketing of agricultural products (e.g. marketing standards, labelling) and the functioning of producer- and interbranch organisations.
- -Issues related to international trade (e.g. licenses, tariff quota management, inward and outward processing) and competition rules.
what are the advantages:
- -Through the history, the CMO had a significant role in stabilizing the markets, increasing agricultural productivity and guaranteeing a stable income for farmers.
- -CMO supports establishment and improvement of producer organisations with the aim to strengthen the bargaining power of farmers and to place farmers in a stronger position.
- -The EU established public and private intervention to stabilise the markets and to ensure a fair standard of living for the agricultural community. Also, the goal is to ensure that products under public or private intervention are suitable for long term storage and are of sound fair and marketable quality.
- -Implementation of common marketing standards provides standardised and satisfactory quality of agricultural products, guaranteeing consumer protection. The application of standards for the marketing of agricultural products can contribute to improving the economic conditions for the production and marketing and the quality of such products.