Analysis of the common agricultural policy in the European Union

Nesenenko Pavlо
PhD in Economics, Associate Professor, General Economic Theory and Economic Policy Department, Odessa National Economic University, Odessa, E-mail:nppod@ukr.net, ORCID ID: https://orcid.org/0000-0001-6399-3511

Tonia Kateryna
student of General Economic Theory and Economic Policy Department, Odessa National Economic University, Odessa, E-mail:ekatrin.tonya@gmail.com, ORCID ID:

Cite this article:

Nesenenko P., Tonia K. (2021) Analysis of the common agricultural policy in the European Union. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Analiz yedynoi ahrarnoi polityky Yevropeiskoho Soiuzu; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 9-10 (286-287), pp. 99-105.

Abstract

EU Common agricultural policy (CAP) exists for more than 50 years. This policy overpassed many reforms and changes during such long period. CAP became modified in comparison with its original version. The article considers the features and functions of the Common Agricultural Policy in the European Union as a component of economic policy. It is stressed that main purposes of CAP in EU are farmers’ support and improvement in agricultural productivity, tackling climate change, maintaining rural areas and landscapes across the EU. It is revealed that the CAP takes action with the income support through direct payments which has to ensure income stability, market measures to deal with difficult market situations such as a sudden drop in demand or a fall in prices as a result of a temporary oversupply on the market and rural development measures with national and regional programmes to address the specific needs and challenges facing rural areas. It is important to overlook the whole transition period and to learn what was done well and where more efforts have to be done. Although CAP helped to achieve EU’s food security, the implementation of the policy deepens the problems of inequality in the distribution of farmers' incomes, destroys competition in foreign markets and does not create sufficient incentives for the spread of environmentally friendly production. For example, CAP payments show that current CAP spending exacerbates income inequality within agriculture, while little funding supports climatefriendly and biodiverse farming regions. New programmed period after the year 2020 is coming. CAP reform 2021-2027 targets addressing the specific needs of the farm sector and rural areas regarding fairness–in terms of the distribution of income support, as well as other tools and features of the CAP. Also is expected from the new CAP to face growing challenges in relation to climate change, biodiversity loss and management of natural resources. It is analyzed that despite the recognition of the above-mentioned problems by the European Union, the approved economic policy measures and incentives are not enough to overcome them.

Keywords

feconomic policy, agrarian policy, Common agricultural policy, European Union, state aid instruments, competition, environmental pollution, rural areas, public administration, CAP reform.

JEL classification: A100; DOI: 10.32680/2409-9260-2021-9-10-286-287-99-105

UD classification: 338.431(4)

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