Agreement Of Agricultural Policy

If the principle of the free movement of goods were to apply to agricultural products, national intervention mechanisms incompatible with the common market were to be transferred to Community level, irrespectless of the public intervention in progress: this is the fundamental justification for the establishment of the CAP. Food demand is not elastic; In other words, price fluctuations have little influence. In addition, the length of production cycles and the immutable nature of some inputs mean that farmers themselves have little control over the global supply of agricultural products. Under these conditions, an increase in supply automatically forces prices down, while a decrease forces them to rise. All these factors create lasting market instability. Faced with this situation, governments have always been keen to regulate agricultural markets and support farmers` incomes, a trend inherited from the CAP. . . .

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