Common Agricultural Policy (CAP)
The Common Agricultural Policy (CAP) is intended to guarantee farmers working in
the European Union a 'fair standard of living' from their production. This
reflects the importance of farmers in the EU as producers of the raw materials
for
the
food and drink we consume.
The CAP provides support to farmers through 'intervention purchasing systems'
which guarantee a minimum selling price for farmers' produce within the EU. If
market prices for a product fall below certain agreed levels, then the EU will
literally intervene and purchase the produce.
The CAP also sets EU import
tariffs
(a
type of tax) and limits on imports, which are known as 'quotas'. These are
designed
to equalise prices between products made outside the EU and those
produced within
it.
These mechanisms mean that UK food and drink manufacturers pay high prices for
key agricultural raw materials in comparison with world levels. Agricultural
raw
materials represent a significant proportion of food manufacturers' costs and
FDF
believes further reform of the CAP is necessary to improve the competitiveness
of
EU agriculture in relation to third countries.
More Information
Last reviewed: 05 Aug 2008