A Study On Reform And Efficience Of The Common Agriculture Policy Of The European Union

Agriculture is the fundamental industry of national economy and the basis of humansociety. It has very important strategic position. With economic globalization and thepost-industrialization, the importance of agricultural production is ever pronounced thanbefore. The fairly quickly raised grain price has showcased the food security can’t beignored. In the meantime, agriculture has the character of large investment, long returncircle and high risks. Compared with other economic sectors, especially with the industry,the relative profit of agricultural production is low. Besides of that, the productiondecisions lag behind due to lack of information about current market conditions, so that itcan’t guarantee the sustainable and sound agricultural development. Therefore,agricultural development must rely on the support and protection from the government.In developed countries, the government not only has built the complete theoreticalsystem for the support and protection of agriculture but also formulated agricultural laws.The Common Agricultural Policy (“CAP” for short) is a perfect example. After theCommon Agricultural Policy was introduced, it guaranteed the food security, improved theeffective supply of grain product, enhanced the agricultural competitive among member ofEuropean Union (EU), kept the price of agricultural production stable, promoted thedevelopment of rural areas in European Union, raised the incomes of the farmers andplayed very important role in accelerating the market integration of the European Union.During the past fifty years, the European Union Common Agricultural Policy hasbeen reformed on many occasions, including reforms before1980s, the1980reform, the1992reform, the Agenda2000and the2003reform. In general, every reform ofagricultural policy due to its respective and different background, intrinsic driving poweras well as external pressure factor. The Mansholt Plan before1980s, Policy of MilkQuota in1980, and the Stabilizer Policy adopted in1980s were adjustment to the pricesupport policy which under the Union’s internal budget pressure. However, the1992reform and the two big reforms after1992were created to cut off the agricultural product export subsidy, as a consequence of the compromise made by European Union under theexternal pressure from the other agricultural product export countries. On the other hand,the agenda2000and the reform2003focus on several new targets, such as ruraldevelopment, environmental protection and etc. Common Agricultural Policy’s targetsystem has presented the tendency of diversification. During several reforms, UN hasconsidered the agricultural and economic development condition of the overall UNmembers and adjusted the price support system, thus the budget pressure has beenalleviated gradually. All these changes has made the function of Common AgriculturalPolicy strengthened.However, it should not be neglected that though the huge achievement CommonAgricultural Policy has made, it has many problems, such as market mechanism distortion,the resources inefficient allocation, the heavy fiscal budget burden. The main reason ofthese problems is the deviation of the common agricultural policy formulated. How tomake up the loss brought by the deviation of the policy? How to realize the Paretoimprovement? How to make Pareto’s optimum? These are the major topics that the UNCommon Agricultural Policy makers need to work on together.Through theoretical analysis, the historical review, the cause analysis, thetransnational comparison, the case inspection, the experience refinement and the realdiagnosis examination, this dissertation has carried on comprehensive and objectiveinspection, analysis and research on the European Union Common Agricultural Policy.The introduction gave a brief overview of research background and the research on theEuropean Union Common Agricultural Policy in china and abroad, and put forward majorissues, methods, innovation of the thesis. The first chapter analyzed the theoretical basis ofCommon Agricultural Policy including the theory of agricultural marketing support andenvironmental policy analysis. The second chapter introduced the background of theEuropean Union Common Agricultural Policy and main contents, and summarized theachievement and problem the CAP has made. The third and fourth chapter introduced theseveral reforms of the common agricultural policy during the European economiccommunity and the European Union was established and analyzed the background, the content and the effect of the reform. The fifth chapter made the research on the realefficiency of the European Union common agricultural policy. The sixth chapter discussedthe meaning of the European Union common agricultural policy considering Chineseexperiences of agricultural economy adjustment and building new socialist rural areas.Finally, I get the conclusions.Nowadays the Chinese government attaches great importance to agriculturalproduction, supporting agricultural development and construction of rural area, steadfastlymaking agriculture, rural areas and farmers the top priority of the government’s work.Based on the theoretical analysis and historical investigation, I hold that we can take theexperience from the CAP of European Union for China’s agricultural development.Toformulate chinese agricultural support and protection policy, we can take the experiencefrom the CAP of European Union to realize the overall sound and sustainable developmentof agriculture, rural areas and farmers.