The European Union is the inter-regional integrating brotherhood of provinces with strong supranational elements, manifested in the development and execution of common policies in the countries of trade, agribusiness, conveyance and other. One of the important policy is

Common Agricultural Policy, chiefly named as ( CAP ) , which provides a figure of commissariats and mechanisms, that regulates the production and processing of agricultural merchandises and selling. Absorbing most of the brotherhood budget. Closely related to the two cardinal countries the EU: Internal Market and Economic and Monetary Union. Rural development became the centre of CAP which is commanding market, pricing, foreign trade and structural policy.

History of Common Agricultural Policy and the period of its formation.

The policy was foremost announced during the Venice conference in 1956, between the caputs of the provinces. Negotiations subject included the constitution of the European Economic Community and was approved by Pol Anry Spaak, Belgian diplomat and honorary president of the “ European Movement “ .

Led by the conference of Member States in Stresa ( Italy ) in 1958 where the foundations and chief rules of CAP were adopted. The 38-47 division of the Rome

contract had been approved the basic rules of the CAP: its tools,

common market organisation, direction ordinances and chief aims.

The reassertion of rules and tools of CAP happened in 1962 and valid until now.

The important function of doing determinations is played by the Council at the degree of Curates of Agribusiness

Purposes of Cap.

On the footing of the Rome Treaty ( 1957 ) , Article a„- 39, Title II, Agriculture.

CAP have a undermentioned aims:

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aˆ? addition agricultural productiveness by advancing proficient advancement and guaranting the rational development of agricultural production and optimal use of production factors, particularly labour,

aˆ? supply a nice criterion of life for husbandmans, in peculiar, to increase single income of individuals employed in agribusiness,

aˆ? to stabilise markets ;

aˆ? Availability of stuffs

aˆ? guarantee that supplies reach consumers at sensible monetary values.

Principles of CAP.

There are 3 rules which were agreed between provinces -members of CAP policy and still applicable today:

aˆ? A individual market for agricultural merchandises ( free trade between

Union members agreed to the purchase monetary value of agricultural merchandises ) ;

aˆ? Community penchants ( favours and benefits for

local merchandises, the abolishment of limitations on internal trade, the debut of

unvarying duties throughout the EU ) ;

aˆ? fiscal solidarity ( CAP is funded by

redistribution through the general budget through the European Fund

warrants and orientation ) .

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The way of structural policy

Organization of production ( scientific discipline and engineering, the educational degree of farm workers )

Optimization of trade flows ( grants of assorted events )

Rural Development

Scheme to modulate markets

Guaranteed monetary values for the merchandises ( maize sugar, milk, fruit veggies, porc vino )

Quota system ( MILK QOTA ) hypertext transfer protocol: //

Bonus system ( greasy CULTURE AND OLIVE OIL )

CAP funding.

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Presently, CAP is funded by the European Agricultural Guidance and Guarantee Fund. It was founded in 1962 and 1964, consists of two parts:

1. Guidance subdivision: it is one of the structural financess and rural development and structural reforms in agribusiness.

2. Guarantee: intercession purchases in order to guarantee gross revenues ( readings of the markets )

After the reform of CAP is carried out from 2007 CAP support in the new legal model. Reorganization of support is necessary because the construct of funding for many of the reforms associating to the undertakings of agencies and terminals, was non crystalline.

For the new fiscal constructs, organized two fund:

aˆ? European Guarantee Fund for Agriculture – Direct Payments and interpret markets.

aˆ? European Agricultural Fund for Rural Development – supports plans to advance rural development.

Cap reforms ( 1984, 1992 )

Reform 1984

For a figure of goods ( consisting about 1 / 3 of all production sectors ) EEC governments have established a ceiling of production, at which the husbandman could no longer number on selling at a guaranteed monetary value.

Adjustments were made to the pricing policy of the EEC, including decreased monetary values paid for goods, which have accumulated big excesss.

Community to cut down the import of certain types of agricultural merchandises from 3rd states.

Reform 1992

Enhance the fight of European husbandmans

To convey production in line with market demands

Support the most destitute husbandmans

Protect the environment

Develop the productive capacity of the small town

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The consequences of the reforms:

aˆ? Decreased guaranteed monetary values for basic nutrient

aˆ? Direct payments to manufacturers

aˆ? Systems Prizes

aˆ? Compensation for loss of income due to the decrease of cultivated countries

New reforms: ( 2000, 2003 )

Reform 2000

Limit budgetary disbursement on agribusiness policy in the period before 2005,

Another cut in guaranteed monetary values,

Direct support to husbandmans

Simplification of statute law,

Environmental protection, nutrient security and agricultural natural stuffs,

Program SAPARD ( Particular Accession Program for Agriculture and Rural Development )

For the readying of farms and agricultural endeavors in CEE states to EU accession.

Reform 2003

Single payments to husbandmans ( individual farm payments ) irrespective of the volume of production, but environmental criterions and guaranting the safety of nutrient ;

Strengthening policies for rural development ;

Decrease in direct payments to big farms ;

Constitution of the European Agricultural Fund for Rural Development ( European Agricultural Fund for Rural Development ) and the European Agricultural Fund warrants ( European Agricultural Guarantee Fund ) in conformity with the ordinances on the funding of the CAP on June 21, 2005

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CAP Enlargment

There are several expansions, which made CAP to ensue new economic and societal challenges. New member provinces have perfectly different degrees of agribusiness, economic system and impact on CAP in whole. This expansion provided the division of agricultural sector between the new and old member provinces. The chief purpose of EU is to come up with the states for policy execution.

Old members of CAP: France, Germany, Italy and Benelux

Recent members of CAP:

2004: Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, The Czech Republic, Slovakia, Slovenia.

2007: Bulgaria, Romania.

Future possible members: Macedonia, Turkey, Croatia.

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Last two expansions led the CAP to reconstruct its ego, supply more public involvement and to work in a better services.

Five steering rules of a new CAP.

European Commission published a study under the header of “ Common Agricultural Policy of the European Union ”

Future rules are:

Targeting on public goods

Environmental focal point

Market orientation

Global nutrient security


This 5 principals purposes to better dynamism and fight of European agribusiness

sector and contribute to the creative activity and execution of the effectual development scheme of EU until 2020.

Three guide lines:

1 ) Elimination of most important defects of the Common Agricultural Policy by

of incremental alterations, and

2 ) The building of environmentally friendly, just, efficient and effectual Unified agrarian political relations

3 ) A gradual displacement in focal point from activities focused on market support and income for activities aimed at environmental protection and clime.

For all three benchmarks the Commission plans maintain the current system of “ two pillars ” :

The “ First pillar ” : Direct subsidies and market-oriented events based on clear regulations laid down at


The “ Second pillar ” : long-run activities aimed the development of rural countries.

After treatment, the three landmarks in the mid-2011 The European Commission will subject to the official proposals to reform the Common Agricultural EU policies.

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