AP25: FDC European Parliament 01-1962 - COMMON AGRICULTURAL POLICY 'CAP' Launch

Provided for in the TREATY OF ROME, the CAP was created in 1962, although certain tools such as import taxes at borders already existed before then. Article 39 defines its main objectives: guaranteeing food independence, increasing productivity, stabilizing markets and ensuring a fair standard of living for farmers. Two fundamental instruments are put in place: guaranteed prices and export refunds.

Every year, the European Community sets, for each production sector (cereals, meat, milk, etc.), guaranteed prices higher than the world average. The quantity that the producer fails to sell is repurchased by the Community at this price, to then be stored and later resold on the domestic market, exported to third-party markets or even destroyed.

At the same time, imported products are taxed so as not to compete with European products. For their part, exports are subject to support (refund): the producer receives a supplement when it sells outside the Community (the difference between the world price and the higher European price).

In addition to stabilizing prices, this administered policy has the effect of considerably increasing agricultural production and productivity in the Community. The farmer is in fact encouraged to produce more since his production is always sold. In 1968, the creation of the Customs Union eliminated intra-community customs duties. A single market for dairy products, beef and sugar was then created.