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European Studies

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European Studies

Post  Art_Susan on Thu Mar 04, 2010 2:31 am

SUBJECT : EUROPEAN STUDIES A

TITLE : Discuss the relative merits/demerits of an agricultural policy
oriented to price reform rather than one based upon structural
reorganisation

GRADE : First Honour

AUTHOR's COMMENTS : I think it's pretty okay. Email if anyine has any
comments @ dhallahan@tinet.ie

TUTOR'S COMMENTS: Excellent essay! Indepth, critical analysis. Watch
length!!

"The common market shall extend to agriculture and trade in agricultural
products. 澉gricultural products� means the products of the soil, of
stock-farming and of fisheries and products of first-stage processing
directly related to these products....The operation and development of the
common market for agricultural products must be accompanied by the
establishment of a common agricultural policy among the Member States�
(1)

From the beginning of the European Union, EU policy has given emphasis to
the agricultural sector. To this end, a Common Agricultural Policy (CAP)
was established in 1963. (2) Provisions for this policy were made in the
Treaty of Rome. The aims of this policy were to increase agricultural
productivity, to ensure a fair standard of living for the agricultural
community, to stabilise markets and to ensure reasonable prices for the
consumer. (3) This is unusual in the context of the Treaty of Rome which
provided for free trade and movement of resources. Agriculture was ill-
adapted for this approach. Protection was given, not only by customs
duties, but also by a variety of agricultural policies. This essay will
discuss the merits and demerits of a the pre-1992 CAP with its emphasis on
price reform, in comparison with the post-1992 CAP which was oriented to
structural reform.

It cannot be denied that there were merits of the pre-1992 price reform
policy. There was a bountiful food supply with an increased variety and
quantity of food. Farmer鱷 yields increased, particularly the large
farmers. Producers were protected from the external market due to
community preference and, therefore, domestic agriculture could develop.
There were also spin offs in food production. Although some of the
policies created good returns for farmers, the demerits of said policies
far outweighed any advantages they had. The core-periphery divide was
widened, quantity became more important than quality and consumers had to
pay higher prices. Agricultural practices caused damage to the environment
and international trading relations were strained.

Until 1993 the EU rarely supported farmers by paying them direct subsidies
from the taxpayers. (4) Instead the 30 billion ECU (and often more) was
spent in the buying up of surplus commodities at minimum official prices
and was also used to pay subsidies to traders to sell surpluses on the
lower-priced world markets. (5) During the 1960鱷 the price system was
devised. The first problem with price policies is that of fluctuating and
differing exchange rates. 廯reen Money� was the first solution to be
developed to counter the problem of differing exchange rates. This,
however, could be manipulated by politicians to achieve different price
levels in the member states than those indicated by the common price level.
The lowering of the green currency towards a depreciating average rate,
raised farm鱷 price levels in the national currency. (6) This meant that
while regular citizens suffered from the devaluation of the currency,
farmers were protected from this trend. Also although the higher prices
were an advantage for the farmer, they were a nuisance for consumers.
Monetary Compensatory Amounts (MCAs) were used in the 1970鱷 when
devaluations by France and revaluations by Germany made Green Money
redundant. MCAs operated as levies on the French exports and subsidies on
French imports. The reverse was applied to Germany. (7) MCAs, while
allowing Community trade to continue even though common pricing was never
established, had more disadvantages than advantages. They allowed the real
level of prices to vary from country to country. This led to the
distortion of production as farmers in the countries which have strong
currencies, were paid more than farmers in countries with a weak currency.
MCAs are also expensive to operate. MCAs were replaced in 1979 by the
European Currency Unit (ECU) as part of the European Monetary system (EMS)
which had been introduced in 1978. (Cool An agricultural ECU which was 14%
more valuable than the ECU was introduced. Until 1993 and 1995, when
adjustments were made to this, vast amounts of officials were needed every
day to administer the agri-monetary system and the monetary amounts had to
be changed weekly. (9) The original agricultural price policy in CAP had
three main components. The first of these was the target price, which was
the basis for establishing all other prices. It is meant to provide a
satisfactory return for the farmer. Threshold prices are the minimum entry
prices for imports (higher than EU prices for domestic products) and they
also safeguard against the undercutting of target prices. An intervention
price is used if the market prices fall. If surplus production occurs, the
commodities are bought by intervention agencies. This maintains a minimum
market price level. Variable import levies were used to bring imports up
to the threshold price and export refunds were used to remove the
difference between the common market price and world price. (10) Variable
levies are one of the most effective protective trade policies used. They
protect domestic price guarantees from being defeated by trade flows. They
can sometimes generate revenues and funds for the central authority
controlling the levies. They also can introduce price stability for
internal markets. They have a number of disadvantages, however. The levy
shrinks imports and losses to the consumer and efficiency are usually
caused. Producer returns can fluctuate more wildly. They can also strain
international relations as the variable levy transfers domestic demand
instability onto the world market. An administrative mechanism must also
be implemented to bridge the gap between the higher price guarantee and
the lower international price, and this can be expensive to operate as it
depends on fluctuating prices, inflation and supply/demand. (11)

The first problem posed by this three-tiered agricultural policy system,
is the decision as to which system of pricing should be used. A compromise
must be achieved between the highest prices and the lowest prices. If the
highest prices are used production would be pushed to unacceptable levels.
When this policy was first introduced, it was effective in the atmosphere
of the time and production levels rose. By 1968 however the first of the
fundamental problems with this policy became apparent.

If product prices are prevented from falling while supplies continue to
increase in a competitive market place, costs will inevitably increase to
meet prices and cut off the people and capital who want to become part of
the industry. Price supports, therefore, increase the costs of production.
The irony of this is that in order to deal with the effects of increased
production costs, price supports must increase also. Although in a
competitive unsupported market this process would mean lower prices for
farmers and consumers, it would also mean hardship for the marginal farmer.
Attempts to stop this by implementing market support policies are bound to
fail however, because the forces of competition are pushed in a different
direction - they are not removed. The demand for, and the price of, land
and equipment will increase as farmers profits increase. The end result is
that farm costs and output prices increase in tandem. This marginalises
the small farmer even more. Another effect of this market support policy
is that production increases as industry becomes more productive. This
leads to large amounts of surpluses and therefore more subsidies are
needed for these to be sold on the market. It also becomes more difficult
to sell these products on a market flooded with already large amounts of
these commodities The costs of the policy feed on themselves in order to
increase. Any attempt to lower prices and cut costs, puts us back where we
started. This is the fundamental fault with price policies in the CAP.

The need for continually updating machinery and equipment for increased
productivity means that much of the money intended for farmers often flows
into ancillary industries and into the owners of assets who are employed
in agriculture. These policies also encourage increased competition
between farmers, and the large farmer usually benefits at the expense of
the small farmer. Therefore these policies exacerbate the inequalities in
the farming sector. The rigidity of the uniform market price does not
take the differences between various areas of the farming community into
account. As well as this, if there was a difference in support for Less
Favoured Areas (LFAs), then the question of who should pay would be an
issue of some contention.

Co-responsibility levies are also an integral part of CAP鱷 price policies.
The CAP had started its life with unlimited guarantees of support,
regardless of the quantities produced. This led to a massive agricultural
budget. Support price decreases were introduced and this narrowed the gap
between the EC price and the world market prices. This helped to reduce
the EC budget and the intervention storage costs of the agricultural
budget. This route was not successful for milk, however, and co-
responsibility levies were introduced in 1977. (12) These were, for the
most part, a success because the smaller farmer was then protected from
these the full damage created by price cuts. There were also gains to the
budget. The advantageous effects of the levy were muted, however, by the
tendency of the Council Of Ministers to raise support prices to offset the
impact of levies.

In 1982 the budget costs of CAP had jumped by 11% and the price policy was
once again in crisis. Intervention stocks began to climb. Generous price
rewards in 1981 and 1982 meant that production levels were high and world
markets became saturated. (13) Quotas were introduced in 1984 to try and
force production more in line with demand. The super-levy was introduced
alongside these quotas. Quotas and super-levies mean that at a wholesale
level, responsibility for the super-levy is determined by the over-quota
production at dairy level. This means generally that those farms who
stayed within the quota would be subsidising those who over-produce.
Quotas, in general, restrict imports in a given period below the amount
which normally would occur. The disadvantages of quotas outweigh their
advantages however. They stint the domestic market of supplies. Internal
prices rise and buyers curtail their purchases. Domestic producers expand
their output, however, and a glut occurs on world markets which have
depressed prices for affected commodities. Quotas, although insulating the
domestic market from world price changes, can also amplify domestic price
swings. Despite quota introduction, surpluses remained high and the cost
of maintaining the dairy policy actually increased. The quota levels
agreed in 1984 were far too large and were set from 1983 production
figures which were already 17% above domestic consumption. Also, as these
quotas were only introduced for the dairy sector, production and surpluses
in other areas continued to grow unchecked. Penalties for over-production
were never really implemented and were easily avoided by raising prices
and adjusting MCA rates. (14)

An arable Set Aside policy was introduced in 1988. Producers can receive
payment per hectare on each hectare taken out of production. Every
producer must make more than a minimum area reduction of 20% to qualify.
(15) This was run on a voluntary basis and farmers received compensation
for the land they didn鱸 use. Small farmers were exempted from Set Aside.
The programme resulted in only a 9% reduction of EU arable area.
Production also increased and intensified as farmers concentrated their
resources on their remaining land. Due to the land being left fallow, the
following year鱷 production rates were high as the land was therefore more
fertile. More money than ever since the price cuts was now being spent on
export subsidies.

Relations between the EU and its global neighbours were strained by CAP.
The dictates of the CAP have led to a series of trade problems. The use of
border fluctuations on world markets has placed the Community in a
difficult situation. The CAP protects internal producers from external
competition to some extent. Also export subsidies ensure that the world
market becomes flooded with cheap commodities which undermine other global
commodities. Depressed world prices occur, interspersed by periods of high
rises in prices. Variable levies were used to bring import prices to a
level higher than that of EU products. The Uruguay Round of world General
Agreement on Trade and Tariffs (GATT) negotiations concluded by agreeing a
40% average reduction of tariffs. Domestic EU support must be reduced by
20% over six years based on total Aggregate Measure of Support (AMS). All
import restrictions must be converted to tariffs and reduced by 36% over
six years. The volume of subsidised exports must be reduced by 21% over
six years. Budgetary expenditure on export subsidies must simultaneously
be reduced by 36% over six years. (16)

The absolute failure of the agricultural price policy of CAP forced the EU
to implement fundamental reform. CAP was producing large amounts of
surpluses and was failing to support the majority of EU landholders.
Support was being concentrated on 20% of the farmers who were responsible
for 80% of the output. Intensive farming practices were damaging the
environment. Since farmers received a subsidy per tonne produced, they
intensified their farming practices to increase their output and income.
Not only was this leading to surpluses and a massive EU budget, but also
to the destruction of the environment. More fertilisers and pesticides
were being used. There was an increase in the density of the livestock on
the land. Enlargement of farms meant that the natural habitat was being
destroyed and marshlands were being drained.

Therefore in 1992 there was radical change from a price oriented policy to
a structural policy. There was also a move from price support to direct
income support. It was generally recognised that a number of structural
changes were required. These included the diversion of land to other uses,
the conservation and protection of the environment, the integration of
structural change with regional economic development and the
implementation of direct income aids. (17) This impetus for change began,
however, in 1988 when the Council of Ministers approved a regulation
2052/88 which was to reform the operation of the Structural Funds as part
of the European Agricultural Guarantee and Guidance Fund (EAGGF). (18)
This regulation marked an important shift in structural policy from the
individual farmer, to the region and rural community.

The regulation set out five objectives. Objective 1 status areas are those
which lag seriously behind and need major development and structural
adjustment. These have a Gross Domestic Product (GDP) of less than 75% of
the Community average. It was hoped to improve living and working
conditions, to protect the environment and to improve processing and
marketing of goods. (19) Objective 5b included areas that had a high share
of agricultural employment and a low income level. (20) Objective 5a was a
regrouping of measures which already existed in CAP i.e. funding for farm
improvements, training and social assistance for farmers. (21) A number of
reform and integration programmes were introduced. Partnership was seen as
the way forward and evaluation of policy success became more important.
The effectiveness of these schemes is questionable however.

In 1992 the MacSharry reforms were introduced. This had three main aims
i.e. early retirement for farmers and farm workers, the promotion of the
use of land for forestry and to promote environmentally friendly
agricultural methods. Farmers are permitted to retire at 55. They must
then transfer their land to another farmer and will receive a pension from
the EU. 50% of the cost of the pension is paid by the EU and 50% by the
national government. (Although in Objective 1 areas the EU pays 75%.) (22)


When land is not needed for agriculture or is of poor quality, an
afforestation programme is implemented. Maintenance fees are paid. There
is a maximum eligibility of 600 hectares and therefore the policy favours
small enterprises. Again, the EU pays 50% of the cost or 75% in Objective
1 areas. (23)

The environment is now also seen as an important problem to be tackled.
There have been attempts to reduce pollution e.g. the Nitrates Objective
which tries to reduce the amount of nitrate pollution in EU waters.
Extensification is encouraged to avoid the damage intensification and
concentration have on the land. Long-term set-aside of 20 years has been
proposed. Grants for the education and training of farmers in
environmentally compatible farming have been implemented e.g. the Rural
Environmental Protection Scheme (REPS) in Ireland. Organic farming is
being promoted and a reduction in the amount of fertilisers and
pesticides used is being encouraged. There has also been a general move
towards trying to ensure that small farmers are not pushed off the land by
larger farmers and discriminating agricultural policies. Diversification
in rural economies is being encouraged. Integrated rural development
programmes have also been implemented. Rural infrastructure has been
improved. Attempts were made to improve research and development at a
rural level.

The EU鱷 Structural Funds are clearly established as the key tenet of
European level policy initiatives. The Fund consists of four separate
funds - the European Regional Development Fund (ERDF), the European Social
Fund (ESF), the European Agricultural Guarantee and Guidance Fund (EAGGF)
(although only Guidance is relevant to Structural Funds) and the Financial
Instrument for Fisheries Guidance (FIFG). (24) The Structural Funds are
aimed at reducing regional and social disparities in the EU. Between 1989
and 194 the funds were allocated 10,000 million ECU per annum. (25)

The EAGGF supports the modernisation of holdings, the processing and
marketing of products and agricultural development measures and the
promotion of local produce. The FIFG is responsible for the fishing fleet,
aquaculture and coastal waters, fishing port facilities and the marketing
of fishery and aquaculture. The ERDF is responsible for investment in
infrastructure, transport, tourism, communications, environmental
improvements and productive capacity. It also promotes research and
development and provides advice and assistance for Small and Medium
Enterprise (SMEs). Finally the ESF is concerned with vocational training
and counselling, giving aid to self-employed people to start up a business
and education schemes in some priority areas. (26)

The ERDF鱷 responsibility lies with Objective 1,2 5b and 6 areas. It
promotes the development of the Objective 1 regions who are lagging behind,
helps to counteract industrial decline and helps reorganise those regions
which have a low population density or whose population is leaving the
rural area and migrating to urban centres. It鱷 main objectives are to
foster co-operation between the local actors of different regions with a
view to the exchange of experiences through transferring knowledge and
expertise and by working together. It hopes also to improve the
capabilities and working methods of local and regional areas in
disadvantaged regions, both economically and socially, so that the regions
can meet the challenges of modern society. (27)

The ESF鱷 aim is to 皾aise the general standard of living by rendering the
employment of workers easier and increasing their geographical and
occupational mobility.� (28) It targets in particular the long-term
unemployed, those in danger of losing their job, young people, women,
handicapped people and the socially excluded. It is governed by Objectives
3 and 4 of the Structural Funds. The ESF also supports the development of
SMEs, tourism and diversification in Objective 1, 2 and 5b areas. (29)
The ESF improved employment opportunities by implementing vocational
guidance and vocational training courses. It also helps in job creation
and wage subsidy projects. Finally, it encourages and supports
technological development and research. For the period 1994-1999 the ESF
will receive 33.5% of Structural funding. (30)

The Guidance section of the EAGGF is involved in all agricultural
structural development in the EU. It invests in and aids the modernisation
of farms. It supports extensification, set aside and environmentally
friendly farming practices. It also gives aid to young farmer鱷 and offers
early retirement. Aid for mountainous regions, poor ecological areas and
LFAs is given. It encourages the increased use of agricultural products
and agricultural materials for industry. The Guidance section essentially
covers grants, mostly contributing to the multi-annual operational
programmesope rating under the Structural Fund Objectives 1, 2, 5a, 5b
and6. It is responsible for the protection of environmentally sensitive
areas (for example intensive valley and marsh grasslands, moorland and
hill and mountain areas), encouraging the reduction or abandonment of
fertilises and pesticides, and maintaining or improving the upkeep of
countryside features such as hedges and walls. (31) Like the EAGGF, the
FIFG provides sectoral assistance which covers the whole of the European
Union, corresponding to Objective 5a. Actions under the FIFG promote
structural measures in the fisheries sector. It grants money to modernise
fleets and to develop fish farming. It offers protection to some marine
areas. It gives aid to help improve facilities at fishing ports. It helps
in the promotion of products and in the processing and marketing of
fishery products. (32)

A number of rural initiatives have been taken to improve the structure of
agriculture and therefore solve the problems which had been plaguing
European agriculture for decades. A bottom-up approach has been taken i.e.
local and regional initiatives are supported in preference to
nationalinitiatives. According to the Cork Declaration issued 9th November
1996:- 灂 rural development policy must be multi-disciplinary in concept,
and multi-sectoral in application, with a clear territorial
dimension...it must be based on an integrated approach, encompassing
within the same legal and policy framework : agricultural adjustment and
development, economic diversification - notably small and medium scale
industries and rural services - the management of natural resources, the
enhancement of environmental functions, and the promotion of culture,
tourism and recreation.� (33)

A bottom-up approach is used with each interested party submitting a
proposal to the EU concerning the improvements that they would like to
make. There are Single Programming Documents (SPDs) for each eligible area.
These identify certain strengths and weaknesses in an area. All proposals
submitted must be based on a particular Priority and Measure. If possible
it should also complement other priorities and measures contained in the
SPD. (34) The EU will make its decision based on the proposal and its
relation to the SPDs for the area.

An example of such a rural development initiative is the LEADER programme.
This was an EU initiative which was to assist communities develop their
own areas. It was a multi-sectoral and integrated project. It鱷 aim was to
find new and innovative solutions which would help the development of
rural areas and increase rural integration. LEADER 1 covered 61% of EU
land area and 30% of it鱷 population. (35) These were mainly rural areas
with a high dependence on agriculture or problems with a decreasing
population. Tourism and SMEs were targeted. Accommodation like B&Bs and
self-catering hostels were established. This brought tourism and money
into the region and boosted the local economy as well as providing
employment. Small enterprises, particularly those which specialised in
crafts, were given aid. For example metalwork, textiles, leather, timber
and furniture. Grants were given also to modernise farms and to help
farmers farm more environmentally. The profile of the recipients who
accepted the aid were farmers with above average farm sizes, who were
young and well-educated and had access to information and capital. (36)

Almost 1,500 jobs were created. (37) Community involvement in rural areas
improved immensely and a sense of local ownership was fostered. It also
created an impetus towards voluntary activities and encouraged co-
operation between existing statutory agencies and private agencies who had
worked together under the LEADER programme.

An example of one of these LEADER programmes was the West Cork LEADER.
This was established in 1991 with the objective of developing the local
rural economy. (38) A plan was drawn up through initiatives in key sectors
like agriculture, tourism, food, crafts and fisheries. Partnership was a
key element of the programme. An integrated approach was taken. To date,
there have been 125 projects in this area. For example, there has been a
development in Castletownbare in co-operative fishing along with the
creation and addition of jobs in the processing of fish products.
Diversification was promoted by the development of a herb farm in west
Cork. A new heritage centre was created in Bandon and a weir project was
also begun there to help generate electricity for a local residential area.
(39)

In the UK the EAGGF has given a total of around �145 million (excluding
allocations in Objective 1 regions and under the Community Initiatives)
under Objective 5a for the period 1994-99. (40) Most measures are aimed at
improving competitiveness and employment, while there are also measures
providing for environmental considerations and for balanced land use and
employment in LFAs. The UK decided on using 63% of the funding to
implement measures concerning processing and marketing. 32% has been
dedicated to developing mountainous LFAs. 5% has been allocated to
investments on holdings. 0.3% will be given as support for young farmers
and producer groups will receive 0.1%. (41)

A total of around �45 million (excluding allocations in Objective 1
regions) has been allocated to the UK by the FIFG for the period 1994-99.
(42) The UK鱷 Objective 5a SPD for fisheries concentrates on adjusting
fishing effort, modernising and improving the safety of vessels, adjusting
the processing industry, and developing ports. A measure for taking
vessels out of service is underway for 1993-98. 7% of the fleet has
currently been taken out of service and it is estimated that by the end of
1998 around 12% will have been withdrawn. (43)

Can we therefore say that the post-1992 structurally oriented agricultural
policy is more successful than the pre-1992 price-oriented one? There are
several criticisms which can be levied against them. Objective regions
came to rely heavily on the funding, and in some cases like Ireland, the
increased funds represented a substantial augmentation of gross national
income. Significant funding-level problems can be seen in examining the
Social Fund's operation, however. While its allocation increased from 2%
of 1977 expenditure, to an estimated 8% between 1994 and 1999, this is
clearly insufficient to withstand the tide of unemployment in the
Community. (44) The Social Fund's allocation of resources is not high
enough to allow the authorities to tackle the underlying causes of
unemployment. The Social Fund has been targeted at training and education
and limited job creation, but fails to address the rigidities and barriers
in wage markets and labour mobility. The fund's sheer lack of financial
clout has meant that it has failed to redress the fact that there are
currently 20 million people unemployed in the EU, with 10 million of
these classed as 'long-term unemployed'. An even more scathing criticism
of the lack of funding provided is that, of the several targeted Objective
3 and 4 areas which target youth and long-term unemployment, by 1993, only
two had seen employment growth substantially above the EU average. (45)

A further criticism is the fact that although ten thousand million ECU
were allocated to the funds yearly from 1989 to 1993, and monitoring
agencies were established to ensure the effective implementation of the
Funds, reforms have been severely limited by the actual funding level. By
1992, only 3% of the EU鱷 Gross Domestic Product (GDP) was going into the
Funds. The benefits of the new funding system have, however been crucial
to several regions. Increased industrial activity, improved infrastructure,
better farm structures and training of unemployed labour have all boosted
regional economies around Europe.

One final drawback of the Structural Funds is the notion that the Funds
are 盭wimming against the tide� of other EU policies, and thus doomed to
failure. The Guarantee section of the CAP tends to concentrate farming
activity in the areas of efficient, wealthy farms, clearly against the
dispersion aspiration of the Structural Funds. Given the huge commitment
of funds to the Guarantee section of the CAP, the Structural Funds have
clearly an uphill task to dislodge the concentration tendencies.

A cursory glance at the raw data proves that the Structural Funds have not
combated the problems they were created to tackle to a significant level.
Twenty million people are still unemployed in the EU, and in 1990, GDP per
capita in Ireland, Greece and Portugal was still 50-60% of the EU average.
(Although these figures have since risen e.g. Ireland stands at 104% of
the EU average). (46) While it is true that many worthwhile and indeed
vital projects have been developed by the Structural Funds, the overall
impact on the EU has been mitigated by a combination of planning,
implementation and lack of funding difficulties. The Structural Funds were
designed to reduce the tendencies towards divergence in the EU, but these
largely remain, and unless an improved financial and developmental base is
established, the Structural Funds will continually fail to address their
targets.

It cannot be denied, however, that they have had favourable effects. In
the short period in which they have been in operation, (Structural Funds
did not become important until 1989 and the subsequent MacSharry reforms),
the Funds have been responsible for improving rural co-operation and
development. Farmers are slowly becoming more environmentally aware and
using environmentally-friendly practices. There has been a turnaround in
internal migration patterns with the long-standing rural exodus being
replaced by what has been referred to as an 矎rban exodus�. There is
increasing migration from urban centres to rural areas. This is partly due
to improved conditions, services and infrastructure in rural areas. These
developments and improvements have been facilitated by the Structural
Funds.

There has been a dramatic rise in the number in the number of commuters
and an enlargement of commuting catchments. (47) There has been an
increase in the number of people who choose to retire in the countryside.
More importantly there has been an increased flow of working-class return-
migrants. (48) That the increase in urban to rural migrations was
accompanied by a parallel decline in the opposite flow, was mainly due to
changing demographic factors. Traditionally the rural exodus was basically
fed by small farmers and their families but now, with improving rural
conditions for smaller farmers, this trend is slacking off. There has also
been a rise in the average rural incomes. (49) In conclusion, this essay
maintains that price policies have a wider range of destructive demerits
than they have merits. It can be seen from EU agricultural policy that the
way forward is seen to be through structural reorganisation. There has
been a shift from a pure agricultural policy, however, to a rural policy
whose two main characteristics are to help maintain a pleasant and
attractive environment through adequate aids to farmers and the adoption
of a bottom-up approach which will integrate rural communities. The new
structurally oriented agricultural policy costs less money to operate than
the former price-oriented policy and has so far been more successful. More
time is required however in order to determine whether the policy is truly
successful.

Art_Susan

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