Study On The Reforms Of European Union's Common Agricultural Policy

As the core of common policies in EU (European Union), the Common Agriculture Policy (CAP) has a long history dated back to 1962. During its 40 years of development, the CAP has achieved much toward its original objectives. Most important has been technological revolution that greatly increased production. Ample EU food supplies have been assured However, a lot of problems have been brought out because of the CAP price mechanisms, such as chronic surpluses of agricultural products resulted. Large surpluses of most agricultural products have made CAP a very costly policy. The spending caused by CAP once reached 73% of the total expense of EU in 1980 and still occupied 45% of the total till now, which resulted in a huge burden on EU budget. In addition, the huge export subsidies deepened the international conflicts with other agricultural exporter. In order to reduce the surpluses of agricultural products , ease the pressures on the CAP budget and release the international conflicts, EU has adopted major policy adjustments every 10 years since late 1960s. From 1990s, EU started fundamental reforms on CAP, including Macsharry Reform in 1992 and Agenda 2000, to change its emphasis from price support to direct payment. In 2003, EU adopted a new round of reform, which revises the way of direct payment form coupling to decoupling with output of agricultural products. Emphasizing on EU's CAP reforms in 1990s, this paper analyzed the reasons, features, theoretic base and impact of the reforms. Based on the above analysis, the paper further gives discussions on the development trend of the new reform.This paper consists of three parts:Firstly, through the introduction of the background of EU and CAP, the paper reviews the forming of EU and CAP, illustrates the target, principle, operation mechanism and achievements of CAP.Secondly, dividing the reforms of CAP according to time sequence of before 1990s, 1990s and after 2000, the paper presents the contents of these reforms, analyzes their reasons, characteristics and major impact Based on these, the trend of future reforms is discussed.Finally, through the analysis of the agricultural support policy in China, the papertries to give some suggestions on the adjustment of agricultural support policy in China.