Abstract

There are more than ten million farmers in the European Union (EU), accounting for more than five percent of direct jobs. Agriculture also provides employment to many people in the supply, the trade and services and in the food processing industry. The food in Europe comes for a significant proportion of farms in the EU. In response to the food shortages during and after World War II, the Common Agricultural Policy (CAP) of the EU stimulated in the beginning mainly the production of large quantities of food so that the union could supply its own needs. In general, this meant that farmers received more money if they produced more food. After some time, this resulted in over-production. This policy became too costly for taxpayers and lead to distortions in the pricing on the world market (through import levies and export subsidies). The recognition of this problem coincided with a growing concern about whether the CAP was an incentive for more intensive farming methods, which may impact on the environment and food safety. It led to a gradual reform (by the introduction of quotas, set-aside, ...) of the CAP, and finally payment of quantity was switched to direct income support to farmers.

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