ABSTRACT
The European Community’s Common Agricultural Policy (CAP) has given rise to various financial and economic flows between the member states and between the producers, consumers and taxpayers of the Community. The policy of price support, through variable import levies, export subsidies and intervention purchases, inevitably results in transfers of income from consumers or users of agricultural output to producers. The inequities between member countries arise because the operation of CAP causes a transfer of income from those countries which are less than self-sufficient in the agricultural commodities covered by the CAP to those countries which are more than self-sufficient. Given that the CAP actually supports agricultural prices at a higher level than would otherwise be the case, the general direction of the resulting transfers from consumers, taxpayers and importing or less than self-sufficient countries, to producers and exporting countries is clear.
