ABSTRACT
In this chapter, the author discusses the principles of European Union (EU) agricultural policy. He provides a description of the development of the agricultural sector under conditions of integration, detailing production levels, trade, production structure and concentration of firms. The author also provides the three case studies, an idea of the workings of different EU regimes: two that are in the process of being phased out and the one that is dominant. He evaluates the regimes operated by the EU from an economic point of view. The author examines the welfare effects of the Common Agricultural Policy (CAP) on different segments of the economy. To protect farmers from foreign competition and from large price fluctuations many countries have established a policy of market control for agricultural products. The three most important types of market control system operated by the CAP are namely, outlet guarantee/intervention price, quota and bonuses.
