ABSTRACT

Under West German pressure, initial price levels to be guaranteed to producers were set too high, notably in the case of cereals. Production expanded, and where it was price-elastic, consumption was adversely affected. Since the greater part of the cost of the CAP consists in disposing of or storing products taken off the market in support of the guarantee to farmers, small changes in the balance of supply and demand produce much larger changes in budgetary costs. Structural policies within the Community, whether agricultural, social or regional, have increasingly been looked upon mainly as vehicles for budgetary transfers in favour of the poorer member states. That was the background to the recent Brussels summit decision to double the Community structural funds by 1993 and to concentrate them upon the poorest areas. The aims of Japanese policy have been food security and income parity for farmers. Imports of competing products have been heavily restricted and, in the case of rice, prohibited.