International Agriculture and Trade Outlook No. (WRS-992) 56 pp

October 1999

The European Union's Common Agricultural Policy: Pressures for Change

Provision for the Common Agricultural Policy (CAP) was integral to the agreements that established the European Union (EU) and the CAP has been among the most important EU policies administered and funded in common. Revisions or " reforms " of the CAP have been numerous,in response to dramatic changes in agricultural realities and circumstances since the 1960s. This report contends that the continuing need for revision results significantly from the interventionist nature of the CAP, which manages agricultural prices, precluding automatic market-directed adjustments of production and consumption to changing circumstances. Strong vested interests will continue to limit reforms, allowing revisions only when the immediate political costs of not reforming equal or exceed the costs of reform.

Keywords: common agricultural policy, CAP, European Union

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Last updated: Friday, October 01, 1999

For more information, contact: Jason A. Bernstein , Nancy Cochrane, Gene Hasha, David Kelch, Susan Leetmaa, Lorraine Mitchell, Todd Morath, and Mary Anne Normile