A Different Look at the EU
by Miguel Noronha
Another problematic issue is the Common Agricultural Policy (CAP). Initially conceived to make member countries self-sufficient in agricultural products, CAP has become one of the most controverse aspects of "European construction". By artificially setting prices, the PAC doesn't allow for rationalizing the production, keeping in business countless farms without any economic viability. By keeping prices above those that would be practiced in a free market (several studies give values between 10 and 80 percent, reaching 300% in some products) investors are lead to making wrong choices thus harming the consumer's pocket. To this is added the low efficacy of fiscalization that leads to recurrent and known frauds in the utilization of given subsidies.
Still in the CAP field, several tariffs were established in order to raise the prices of imported products to the level of the produced in the community area. These tariffs, together with the subsidies to the exportation of agricultural surpluses (originated significatively by subsidies to production), configure a flagrant case of unlawful competition, not allowing many third world countries to be competitive in the only products where they actually have competitive advantages. In 2005, 49 billion euros were destined to the CAP (about 46% of the union budget), while its beneficiaries are estimated to be about 4% of the EU population.
I couldn't agree more on this. The CAP is a constant drain on the European Union and we would be so much better of using the money on true job creation, not on subsidising obsolete farming. The inviroment would also benefit from this, since the CAP makes groving crops on marginal soils with the use of fertilisers profitable.
