De groene zorgen van Europa : drie studies over het EG-landbouwbeleid

This publication contains the summaries of three studies on the common agricultural policy of the EC, as well as some additional remarks on recent developments in that policy. The studies were written between 1979 and 1983 and are all part of a thesis called "Europe's Green Worries".

The first study deals with the problems of agriculture in developed countries, with the EC reaction on these problems and with the effects of the common agricultural policy on the policy objectives. The main problem of agriculture in developed countries is that technological progress in this sector causes an increase in supply which is much larger than the increase in demand for agricultural products. This difference in growth causes in Its turn such a pressure on agricultural prices and incomes, that government intervention is considered to be necessary. The EC Intervenes mainly through price support by means of a markets and prices policy. The consequences of that policy are that the disequilibrium between supply and demand finds another outlet than through pressure on prices. Now the main symptoms of oversupply are an increase in the self-sufficiency ratio and in the budgetary burdens of the EC.

The second study deals with the question to what extent some alternative policies would be more successful than the current one in achieving the policy objectives. The policy alternatives which have been studied are: deficiency payments, direct income payments to farmers and the continuation of the current price support, while the supply is controlled by means of a quota system. The study shows large differences between the policy alternatives in their Implications for the various policy objectives. When an equal level of income support under each policy alternative is assumed, then deficiency payments for quotas allocated in advance on a farm firm basis are the most attractive policy alternative for the EC economy as a whole. The reason is that the supply and demand effects of this policy alternative are very small or even zero. However, this policy alternative causes large burdens for the EC budget. Though these budgetary burdens need not be higher for products with a high self-sufficiency ratio than under the current prices policy. The reason is the rather large negative terms of trade effect of the necessary disposal of additional supply under the current policy.

The third study specially deals with the disposal policy of dairy products. One of the conclusions of this study is that the terms of trade effects of additional sales of these products have become so large that each additional unit of milk produced under a system of unlimited price support burdens the EC budget with almost the same amount as the farmer receives. This explains the extreme rise of the budgetary burdens of the common dairy policy, when the milk production increases. It constitutes also the main reason for the introduction of the superlevy system in the dairy sector in 1984.