European Studies

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ensure reasonable prices for the
consumer. (3) This is unusual in the context of the Treaty of Rome which
provided for free trade and movement of resources. Agriculture was ill-
adapted for this approach. Protection was given, not only by customs
duties, but also by a variety of agricultural policies. This essay will
discuss the merits and demerits of a the pre-1992 CAP with its emphasis on
price reform, in comparison with the post-1992 CAP which was oriented to
structural reform.

It cannot be denied that there were merits of the pre-1992 price reform
policy. There was a bountiful food supply with an increased variety and
quantity of food. FarmerÆs yields increased, particularly the large
farmers. Producers were protected from the external market due to
community preference and, therefore, domestic agriculture could develop.
There were also spin offs in food production. Although some of the
policies created good returns for farmers, the demerits of said policies
far outweighed any ...

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a nuisance for consumers.
Monetary Compensatory Amounts (MCAs) were used in the 1970Æs when
devaluations by France and revaluations by Germany made Green Money
redundant. MCAs operated as levies on the French exports and subsidies on
French imports. The reverse was applied to Germany. (7) MCAs, while
allowing Community trade to continue even though common pricing was never
established, had more disadvantages than advantages. They allowed the real
level of prices to vary from country to country. This led to the
distortion of production as farmers in the countries which have strong
currencies, were paid more than farmers in countries with a weak currency.
MCAs are also expensive to operate. ...

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