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Institute of Agricultural and Food Economics – National Research Institute Warsaw
Acceptance date: 2015-12-03
Publication date: 2015-12-03
Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics 2015;345(4):38–57
The paper, primarily, aims at presentation of the selected global and intra- European determinants of planning, running, updating and reforming the Common Agricultural Policy (CAP) of the European Union. These determinants form a dynamic system of interactions of complementary (synergies), but also contradictory (substitutability) character, with the addition of intrinsic dilemmas of the CAP, which are typical for each sectoral economic policy. Such a broad outlook is justified by the deepening interdependencies in the modern world and the significance of the EU as the largest economic player on the global scale. The CAP is continually at interest of other countries as a source of inspiration but also a precautionary tale as it comes to the undesired effects of widespread state interventionism. The paper is a cross-sectional study – though having some features of meta-analysis – which synthesises the works of other researchers and own thoughts of the author. All these deliberations led to the conclusion that the CAP – for years appealing to the paradigms of sustainability and multifunctionality of agriculture – bears features of a rather modern utilitarian construct oriented at the future. However, its strong dependence on subsidies makes it a rather unattractive proposal for most of the developing countries, even hindering the process of solving serious development problems. Furthermore, agricultural subsidies deform competition in the international agri-food markets. They also weaken the motivation of the EU farmers to try to improve their competitive position by entrepreneurial behaviours, implementation of innovations, sound cost monitoring and adequate and flexible operating, financial and risk-management strategies.