ABSTRACT
In 1980, total Community expenditure on cereals under the Common Agricultural Policy was about 1600 million European Units of Account (EUA), of which 1100 million EUA went as export refunds, and 500 million EUA on intervention payments such as production subsidies and storage payments. Alternative policies would have equally striking commodity effects, which need to be compared with the present pattern of support. Cereals occupy a central position in nearly all farming systems, including those which operate within a rich, highly developed economy such as the European Community (EC). Actual intervention on EC markets takes place only for pigment, and is much more indirect than for cereals and milk. The market regime attempts to stabilise production without leading to excessive storage stocks, and support prices are related to those for cereals as the major input cost. The production of sugar in the EC is a striking example of how agricultural protectionism can substantially alter the pattern of production and trade.
