Common Agricultural Program (CAP) reforms and likely implications of Single Farm Payment (SFP) policy
CAP: The concept of Common Agricultural Policy (CAP) emerged after Second World War with the objective of securing domestic production. The creation of a common agricultural policy was proposed in 1960 by the European Commission. It followed the signing of the Treaty of Rome in 1957, which established the common market. The CAP combines a direct subsidy payment for crops and cultivated land with price support mechanisms, including guaranteed minimum price, import tariffs and quotas on certain goods from outside the EU. European farmers responded Image via Wikipedia quickly to the high domestic prices created through such protection measures. This was further supported by increasing agricultural productivity through development of new technologies in the 1960s and 1970s. The consequence was that the European Union switched from net food importer to net food exporter in the late 70s. With the continuation of such policy, production increased significantly and later EU disposed su...