Do Rising Food Prices Make the Cap Unnecessary?
Do rising food prices make the CAP unnecessary? The Common Agricultural Policy (the CAP) was first established to make a single market for agricultural sector within EU Countries. It was formed to guarantee the stocks of foods that basically are or made from agricultural area. It also stabilizes the prices, which help the farmers to against imported food outside the EU and give better standard for them. However, there are for and against arguments about whether the CAP is still necessary or not, especially at nowadays situation when food prices are typically getting higher.
In this essay I’m going to discuss about both sides of arguments. The CAP has been a controversial since long time ago. One of the remaining issues is that it costs huge externalities to the environment such as there will be too much exploitation and also increase use of chemical and pesticide, which will harm the society as well. Increase in food prices means that the more income for the farmers, which is one of the purposes of the CAP.
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So the farmer might have greater income and could run the businesses by themselves. It also encourages overproduces or surpluses, which will be carried by the farmers and the taxpayers. It means the waster of money, because the CAP comes from EU budget, which is one of the government expenditures, gained through the taxes. However, if there is no CAP, it means there are no subsidies and the costs of production for the farmers are getting higher. It could end up with further increase in food prices.
The removal of the CAP doesn’t guarantee that it will discourage the farmers to use less chemical and pesticide, it might be worse in order to keep the costs of production low. In summary, I think the CAP is still necessary for the farmers. Even though it hasn’t perfect yet –it still give disadvantages, I think it is better if the government change the rules of it rather than just remove it. References: Garratt, D. , Sloman, J. & Alison, W. (2012). Economics. Essex: Pearson. Lowe, C. & Owen, V. (2011). Politics. Essex: Pearson.