Rainer Wichern (Directorate General for Economic and Financial Affairs)
(European Economy. Economic Papers. 211. August 2004.
Brussels. 67pp. Tab. Free.)
KC-AI-04-211-EN-C ISBN: 92-894-7878-0 ISSN: 1725-3187
While acknowledging and supporting these views with respect to the 2003 reform, this paper, however, tries to highlight that the overall support level for the agricultural sector remains relatively high and that most of the farm support still stems from market price support. In systematically analysing the main CAP measures and using most recent figures, it is shown that price support – together with quota restrictions and land set aside obligations – is one of the least efficient CAP instrument currently in place. Thus, the success of the 2003 reform does not allow for a position of leaning back. On the contrary, the drive of previous reforms (1992 and AGENDA 2000) with respect to bringing EU prices down to competitive levels need to be kept and perhaps even be further accelerated.