Common Agricultural Policy

Common Agricultural Policy (CAP)

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Introduction

The European Union Common Agricultural Policy (CAP) was initially defined by the Rome Treaty in 1957. During this period, the founding member states of the European Community had just emerged from a decade of World War II that had caused severe food shortages. In building a common European market, the tariffs levied on agricultural products were to be eliminated. However, due to the issue’s sensitivity and political power of farmers the Common Agricultural Policy took many years before being fully implemented.1

The Rome Treaty signed in the year 1957 established a Common European Market. The treaty also defined the objectives concerning the CAP or the Common Agricultural Policy. During the Stresa Conference that took place in July 1958, the principles governing the Common Agricultural Policy were set out. The European Commission proposed the creation of CAP in 1960. The Common Agricultural Policy mechanisms were embraced by the six CAP founding member States. The Common Agricultural Policy came into force in 1962.2

The Common Agricultural Policy’s main objectives were:

1. To improve the agricultural productivity in the European Community.

2. To improve the living standards among the agricultural population.

3. To stabilize the agricultural markets.

4. To warrant reasonable prices to the agricultural products.

5. To ensure realistic prices of supplies to consumers.

As a result of the CAP, during the early 1980s there were large surplus of sugar, dairy

1Shutzle, Theodore, The Economic Organization of Common Agricultural Policy, (1953, New York: McGraw Hill Book Company) 55.

2Fennell, Rosemary, The history and Objectives of the Common Agricultural Policy. (1985, Journal of Common Market Studies) 77.

produce, and cereals. In 1988, the CAP introduced a package of reforms that were intended to counter over production and control...