ABSTRACT
This chapter provides an analysis of the meaning and development of Common Agricultural Policy (CAP), difficult for two primary factors. The first of these involves the existence of a heterogeneous agricultural sector characterized by a productive duality. The second item which makes this analysis difficult pertains to the ongoing character of the process of communitarian integration. The chapter discusses the general characteristics of the European Community (EC) agrarian policy. Protectionist policies were employed by EC member countries even before the CAP was instituted in 1962. Nevertheless, CAP played a fundamental role in increasing the size of the supply. The short-term EC agricultural policy also emphasized quantity, for CAP has been based on high guaranteed prices, strong external protection, and the public financing of surplus stocks. The similarity of institutionally generated prices must be accompanied by the existence of a common unit of account which must be transformed into national currencies when the market circulation is exhausted.
