ABSTRACT
This chapter discusses the principles of European Union (EU) agricultural policy. It describes the development of the agricultural sector under conditions of integration, detailing production levels, trade, production structure, and concentration of firms and so on. The economic motive was the strong association of the agricultural sector with the rest of the economy: differential prices for agricultural produce, affecting the cost of raw materials as well as labour cost, lead to differential costs in other sectors and may thus disturb competition. From the fact that agricultural policy is the EU’s most elaborate policy area and has always been the focus of interest, one might presume that this sector is the most important in the EU economy. The common agricultural policy has a very controversial record. On the one hand, it has realised its objectives on many points. Internal markets have been stabilised. Farmers’ incomes have increased at about the same rate as those in the rest of the economy.
