The Common Agricultural Policy

Abstract

The most significant changes in agricultural policy since the 1947 Agriculture Act took place as a result of Britain’s entry into the EC in 1973. Until this time, British agriculture had been treated as a special case with legislative and financial support readily available for it. Accession to the Treaty of Rome had provided some continuity by recognizing, in principle, the need to assist farmers throughout Europe. The transfer of control from London to Brussels did not fundamentally alter the existing objectives of British agricultural policy, but it did lead to a fundamental adjustment in the way in which support was provided. Guaranteed prices and deficiency payments were replaced by a Common Agricultural Policy (CAP) consisting of individual commodity price support regimes and import levies. The CAP was not implemented immediately in Britain but after a transition period during which the agricultural administration and support were adjusted to conform to the rest of the EC. A number of British agricultural policies were either phased out or substantially modified prior to Britain’s entry. Britain’s entry coincided with oil price rises implemented by the Organization of Petroleum Exporting Countries (OPEC) and a commodity price explosion which undermined the stability of the world’s financial markets.