Analysis of the CAP Reform, An

Michael D. Helmar, Deborah L. Stephens, K. Eswaramoorthy, D. Scott Brown, Dermot J. Hayes, Robert E. Young II, William H. Meyers
April 1994  [94-GATT 17]

The Treaty of Rome, which established the European Economic Community in 1957, defined the objectives of the Common Agricultural Policy (CAP). These objectives, contained in Article 39, follow: 1) Increase agricultural productivity by promoting technical progress and by ensuring rational development of agricultural production and optimum use of the production factors, particularly labor. 2) Ensure a fair standard of living for the agricultural community, in particular by increasing the individual earning of the persons engaged in agriculture. 3) Stabilize markets. 4) Assure the availability of supplies. 5) Ensure that supplies reach consumers at reasonable prices. The objectives of the CAP have been met, mostly through price policies that traditionally have been tied to production. The result of these policies is that production of many agricultural commodities has increased beyond levels necessary to meet CAP objectives and excess supplies have accumulated, been exported with subsidies, or both, at great expense to the European Community.

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