Topic 4, The Common Agricultural Policy Flashcards
- About the CAP we can NOT say that:
a) Protection to farmers’ incomes has decreased over time, that currently CAP represents a very small share of the EU budget (less than 10%)
b) When CAP keeps the price in the EU above world market levels, it can be thought of as having the same effect as a tax consumption or a subsidy to production
c) The reform based on decoupling (Single Payment Scheme) aims at reducing surpluses and helping farmers to produce to market demand
d) CAP was one of the first common policies to have replaced national policies
a) Protection to farmers’ incomes has decreased over time, that currently CAP represents a very small share of the EU budget (less than 10%)
- The agricultural sector requires public intervention, among other reasons, because:
a) Agricultural products represent a significant share of consumers spending
b) Income instability may cause the disappearance of the sector
c) The EU is a net importer of most of the products protected by the CAP
d) Farmers may abuse their market power and set too high prices for consumers
b) Income instability may cause the disappearance of the sector
- Common Agricultural Policy (CAP) is based on some basic principles, one of which is:
a) Unity of market, which ensures that all European agricultural products can benefit from the same protection
b) Financial solidarity, which aims to guarantee European farmers adequate levels of income and financing of their activity
c) Community preference, which aims to ensure that products covered by the CAP reach European markets at prices not exceeding import prices
d) Cooperation, which means that both the Commission and the Council of the EU have to agree on the intervention prices set in every Common Market Organization
c) Community preference, which aims to ensure that products covered by the CAP reach European markets at prices not exceeding import prices
- One of the main characteristics of the CAP is:
a) Rural development (pillar II) has traditionally been financed between European Agricultural Guidance and Guarantee Fund (EAGGF) and member state recipients
b) Rural development (pillar II) accounts for a very similar budget expenditure to market and income support policy (pillar I)
c) The economic costs of the CAP are the expenses included in the EU budget
d) The main failure of the CAP has been the high rate of agricultural productivity growth
a) Rural development (pillar II) has traditionally been financed between European Agricultural Guidance and Guarantee Fund (EAGGF) and member state recipients
- In the event of surpluses of a particular agricultural product protected, EU producers could rely on
a) Subsidies for importers so that they buy European products instead
b) Consumers to increase their demand in order to make surpluses disappear
c) Export subsidies which allow EU products to be sold to other countries at world price levels
d) Intervention agencies to increase purchases of illegally imported products that may have entered the EU
c) Export subsidies which allow EU products to be sold to other countries at world price levels
- The classical/traditional protective mechanisms of the CAP used a system of prices which includes the threshold price, which is the:
a) Minimum price for an agricultural product in the common market either domestic or imported
b) Highest price for surpluses to be exported when they appear
c) Minimum price at which imports can reach the common market
d) One used to determine the target price
c) Minimum price at which imports can reach the common market
- The different CAP reforms undertaken since the 80s have tried to:
a) Increase productivity in agriculture in order to ensure the level of self-sufficiency
b) Reduce the ability to generate structural surpluses and thus the financial impact on the EU budget
c) Transfer to the States the responsibility of financing the CAP
d) Redistribute income support from continental to Mediterranean production
b) Reduce the ability to generate structural surpluses and thus the financial impact on the EU budget
- One of the effects of the MacSharry (1992) reform was:
a) To increase food imports from third countries
b) To increase the EU’s food production
c) To increase the price of agricultural products for EU consumers
d) To reduce prices paid by EU consumers, therefore increasing demand and reducing surpluses
d) To reduce prices paid by EU consumers, therefore increasing demand and reducing surpluses
- After 2005 and following the 2003 CAP reform we find that
a) Income support to farmers is mainly provided through coupled direct payments
b) Permanent surpluses decreased as a consequence of the introduction of decoupled direct payments
c) Income support to farmers is mainly provided through market support (intervention purchases and export subsidies)
d) Financing for rural development was reduced following modulation
b) Permanent surpluses decreased as a consequence of the introduction of decoupled direct payments
- Considering the effects of the CAP, we can say that its balance is roughly
a) Positive to the extent that different productions have been treated evenly
b) Positive, as it has been able to guarantee food self-sufficiency in the EU most of the time
c) Positive, as it has reinforced bonds with third countries
d) Positive from the point of view of income redistribution as it has favoured small producers
b) Positive, as it has been able to guarantee food self-sufficiency in the EU most of the time
