SUBJECT to ensure a fair standard of living

SUBJECT to ensure a fair standard of living

SUBJECT : EUROPEAN STUDIES ATITLE : Discuss the relative merits/demerits of an agricultural policyoriented to price reform rather than one based upon structuralreorganisationGRADE : First HonourAUTHOR’s COMMENTS : I think it’s pretty okay. Email if anyine has anycomments @ emailprotectedTUTOR’S COMMENTS: Excellent essay! Indepth, critical analysis. Watchlength!!”The common market shall extend to agriculture and trade in agriculturalproducts.

Agricultural products means the products of the soil, ofstock-farming and of fisheries and products of first-stage processingdirectly related to these products….The operation and development of thecommon market for agricultural products must be accompanied by theestablishment of a common agricultural policy among the Member States (1)From the beginning of the European Union, EU policy has given emphasis tothe agricultural sector.

To this end, a Common Agricultural Policy (CAP)was established in 1963. (2) Provisions for this policy were made in theTreaty of Rome. The aims of this policy were to increase agriculturalproductivity, to ensure a fair standard of living for the agriculturalcommunity, to stabilise markets and to ensure reasonable prices for theconsumer. (3) This is unusual in the context of the Treaty of Rome whichprovided for free trade and movement of resources. Agriculture was ill-adapted for this approach. Protection was given, not only by customsduties, but also by a variety of agricultural policies.

This essay willdiscuss the merits and demerits of a the pre-1992 CAP with its emphasis onprice reform, in comparison with the post-1992 CAP which was oriented tostructural reform.It cannot be denied that there were merits of the pre-1992 price reformpolicy. There was a bountiful food supply with an increased variety andquantity of food. Farmers yields increased, particularly the largefarmers. Producers were protected from the external market due tocommunity preference and, therefore, domestic agriculture could develop.There were also spin offs in food production. Although some of thepolicies created good returns for farmers, the demerits of said policiesfar outweighed any advantages they had.

The core-periphery divide waswidened, quantity became more important than quality and consumers had topay higher prices. Agricultural practices caused damage to the environmentand international trading relations were strained.Until 1993 the EU rarely supported farmers by paying them direct subsidiesfrom the taxpayers. (4) Instead the 30 billion ECU (and often more) wasspent in the buying up of surplus commodities at minimum official pricesand was also used to pay subsidies to traders to sell surpluses on thelower-priced world markets. (5) During the 1960s the price system wasdevised. The first problem with price policies is that of fluctuating anddiffering exchange rates. Green Money was the first solution to bedeveloped to counter the problem of differing exchange rates.

This,however, could be manipulated by politicians to achieve different pricelevels in the member states than those indicated by the common price level.The lowering of the green currency towards a depreciating average rate,raised farms price levels in the national currency. (6) This meant thatwhile regular citizens suffered from the devaluation of the currency,farmers were protected from this trend. Also although the higher priceswere an advantage for the farmer, they were a nuisance for consumers.Monetary Compensatory Amounts (MCAs) were used in the 1970s whendevaluations by France and revaluations by Germany made Green Moneyredundant. MCAs operated as levies on the French exports and subsidies onFrench imports. The reverse was applied to Germany.

(7) MCAs, whileallowing Community trade to continue even though common pricing was neverestablished, had more disadvantages than advantages. They allowed the reallevel of prices to vary from country to country. This led to thedistortion of production as farmers in the countries which have strongcurrencies, were paid more than farmers in countries with a weak currency.MCAs are also expensive to operate. MCAs were replaced in 1979 by theEuropean Currency Unit (ECU) as part of the European Monetary system (EMS)which had been introduced in 1978. (8) An agricultural ECU which was 14%more valuable than the ECU was introduced.

Until 1993 and 1995, whenadjustments were made to this, vast amounts of officials were needed everyday to administer the agri-monetary system and the monetary amounts had tobe changed weekly. (9) The original agricultural price policy in CAP hadthree main components. The first of these was the target price, which wasthe basis for establishing all other prices. It is meant to provide asatisfactory return for the farmer. Threshold prices are the minimum entryprices for imports (higher than EU prices for domestic products) and theyalso safeguard against the undercutting of target prices.

An interventionprice is used if the market prices fall. If surplus production occurs, thecommodities are bought by intervention agencies. This maintains a minimummarket price level. Variable import levies were used to bring imports upto the threshold price and export refunds were used to remove thedifference between the common market price and world price. (10) Variablelevies are one of the most effective protective trade policies used. Theyprotect domestic price guarantees from being defeated by trade flows. Theycan sometimes generate revenues and funds for the central authoritycontrolling the levies.

They also can introduce price stability forinternal markets. They have a number of disadvantages, however. The levyshrinks imports and losses to the consumer and efficiency are usuallycaused. Producer returns can fluctuate more wildly. They can also straininternational relations as the variable levy transfers domestic demandinstability onto the world market. An administrative mechanism must alsobe implemented to bridge the gap between the higher price guarantee andthe lower international price, and this can be expensive to operate as itdepends on fluctuating prices, inflation and supply/demand. (11)The first problem posed by this three-tiered agricultural policy system,is the decision as to which system of pricing should be used.

A compromisemust be achieved between the highest prices and the lowest prices. If thehighest prices are used production would be pushed to unacceptable levels.When this policy was first introduced, it was effective in the atmosphereof the time and production levels rose. By 1968 however the first of thefundamental problems with this policy became apparent.If product prices are prevented from falling while supplies continue toincrease in a competitive market place, costs will inevitably increase tomeet prices and cut off the people and capital who want to become part ofthe industry. Price supports, therefore, increase the costs of production.The irony of this is that in order to deal with the effects of increasedproduction costs, price supports must increase also.

Although in acompetitive unsupported market this process would mean lower prices forfarmers and consumers, it would also mean hardship for the marginal farmer.Attempts to stop this by implementing market support policies are bound tofail however, because the forces of competition are pushed in a differentdirection – they are not removed. The demand for, and the price of, landand equipment will increase as farmers profits increase. The end result isthat farm costs and output prices increase in tandem. This marginalisesthe small farmer even more.

Another effect of this market support policyis that production increases as industry becomes more productive. Thisleads to large amounts of surpluses and therefore more subsidies areneeded for these to be sold on the market. It also becomes more difficultto sell these products on a market flooded with already large amounts ofthese commodities The costs of the policy feed on themselves in order toincrease. Any attempt to lower prices and cut costs, puts us back where westarted. This is the fundamental fault with price policies in the CAP.

The need for continually updating machinery and equipment for increasedproductivity means that much of the money intended for farmers often flowsinto ancillary industries and into the owners of assets who are employedin agriculture. These policies also encourage increased competitionbetween farmers, and the large farmer usually benefits at the expense ofthe small farmer. Therefore these policies exacerbate the inequalities inthe farming sector. The rigidity of the uniform market price does nottake the differences between various areas of the farming community intoaccount. As well as this, if there was a difference in support for LessFavoured Areas (LFAs), then the question of who should pay would be anissue of some contention.Co-responsibility levies are also an integral part of CAPs price policies.The CAP had started its life with unlimited guarantees of support,regardless of the quantities produced.

This led to a massive agriculturalbudget. Support price decreases were introduced and this narrowed the gapbetween the EC price and the world market prices. This helped to reducethe EC budget and the intervention storage costs of the agriculturalbudget. This route was not successful for milk, however, and co-responsibility levies were introduced in 1977. (12) These were, for themost part, a success because the smaller farmer was then protected fromthese the full damage created by price cuts.

There were also gains to thebudget. The advantageous effects of the levy were muted, however, by thetendency of the Council Of Ministers to raise support prices to offset theimpact of levies.In 1982 the budget costs of CAP had jumped by 11% and the price policy wasonce again in crisis.

Intervention stocks began to climb. Generous pricerewards in 1981 and 1982 meant that production levels were high and worldmarkets became saturated. (13) Quotas were introduced in 1984 to try andforce production more in line with demand. The super-levy was introducedalongside these quotas. Quotas and super-levies mean that at a wholesalelevel, responsibility for the super-levy is determined by the over-quotaproduction at dairy level. This means generally that those farms whostayed within the quota would be subsidising those who over-produce.

Quotas, in general, restrict imports in a given period below the amountwhich normally would occur. The disadvantages of quotas outweigh theiradvantages however. They stint the domestic market of supplies. Internalprices rise and buyers curtail their purchases. Domestic producers expandtheir output, however, and a glut occurs on world markets which havedepressed prices for affected commodities. Quotas, although insulating thedomestic market from world price changes, can also amplify domestic priceswings.

Despite quota introduction, surpluses remained high and the costof maintaining the dairy policy actually increased. The quota levelsagreed in 1984 were far too large and were set from 1983 productionfigures which were already 17% above domestic consumption. Also, as thesequotas were only introduced for the dairy sector, production and surplusesin other areas continued to grow unchecked. Penalties for over-productionwere never really implemented and were easily avoided by raising pricesand adjusting MCA rates. (14)An arable Set Aside policy was introduced in 1988. Producers can receivepayment per hectare on each hectare taken out of production. Everyproducer must make more than a minimum area reduction of 20% to qualify.

(15) This was run on a voluntary basis and farmers received compensationfor the land they didnt use. Small farmers were exempted from Set Aside.The programme resulted in only a 9% reduction of EU arable area.Production also increased and intensified as farmers concentrated theirresources on their remaining land. Due to the land being left fallow, thefollowing years production rates were high as the land was therefore morefertile. More money than ever since the price cuts was now being spent onexport subsidies.Relations between the EU and its global neighbours were strained by CAP.

The dictates of the CAP have led to a series of trade problems. The use ofborder fluctuations on world markets has placed the Community in adifficult situation. The CAP protects internal producers from externalcompetition to some extent. Also export subsidies ensure that the worldmarket becomes flooded with cheap commodities which undermine other globalcommodities.

Depressed world prices occur, interspersed by periods of highrises in prices. Variable levies were used to bring import prices to alevel higher than that of EU products. The Uruguay Round of world GeneralAgreement on Trade and Tariffs (GATT) negotiations concluded by agreeing a40% average reduction of tariffs. Domestic EU support must be reduced by20% over six years based on total Aggregate Measure of Support (AMS). Allimport restrictions must be converted to tariffs and reduced by 36% oversix years. The volume of subsidised exports must be reduced by 21% oversix years.

Budgetary expenditure on export subsidies must simultaneouslybe reduced by 36% over six years. (16)The absolute failure of the agricultural price policy of CAP forced the EUto implement fundamental reform. CAP was producing large amounts ofsurpluses and was failing to support the majority of EU landholders.

Support was being concentrated on 20% of the farmers who were responsiblefor 80% of the output. Intensive farming practices were damaging theenvironment. Since farmers received a subsidy per tonne produced, theyintensified their farming practices to increase their output and income.Not only was this leading to surpluses and a massive EU budget, but alsoto the destruction of the environment. More fertilisers and pesticideswere being used. There was an increase in the density of the livestock onthe land. Enlargement of farms meant that the natural habitat was beingdestroyed and marshlands were being drained.

Therefore in 1992 there was radical change from a price oriented policy toa structural policy. There was also a move from price support to directincome support. It was generally recognised that a number of structuralchanges were required. These included the diversion of land to other uses,the conservation and protection of the environment, the integration ofstructural change with regional economic development and theimplementation of direct income aids. (17) This impetus for change began,however, in 1988 when the Council of Ministers approved a regulation2052/88 which was to reform the operation of the Structural Funds as partof the European Agricultural Guarantee and Guidance Fund (EAGGF).

(18)This regulation marked an important shift in structural policy from theindividual farmer, to the region and rural community.The regulation set out five objectives. Objective 1 status areas are thosewhich lag seriously behind and need major development and structuraladjustment.

These have a Gross Domestic Product (GDP) of less than 75% ofthe Community average. It was hoped to improve living and workingconditions, to protect the environment and to improve processing andmarketing of goods. (19) Objective 5b included areas that had a high shareof agricultural employment and a low income level. (20) Objective 5a was aregrouping of measures which already existed in CAP i.e. funding for farmimprovements, training and social assistance for farmers.

(21) A number ofreform and integration programmes were introduced. Partnership was seen asthe way forward and evaluation of policy success became more important.The effectiveness of these schemes is questionable however.In 1992 the MacSharry reforms were introduced. This had three main aimsi.e.

early retirement for farmers and farm workers, the promotion of theuse of land for forestry and to promote environmentally friendlyagricultural methods. Farmers are permitted to retire at 55. They mustthen transfer their land to another farmer and will receive a pension fromthe EU.

50% of the cost of the pension is paid by the EU and 50% by thenational government. (Although in Objective 1 areas the EU pays 75%.) (22)When land is not needed for agriculture or is of poor quality, anafforestation programme is implemented. Maintenance fees are paid. Thereis a maximum eligibility of 600 hectares and therefore the policy favourssmall enterprises. Again, the EU pays 50% of the cost or 75% in Objective1 areas.

(23)The environment is now also seen as an important problem to be tackled.There have been attempts to reduce pollution e.g. the Nitrates Objective which tries to reduce the amount of nitrate pollution in EU waters.Extensification is encouraged to avoid the damage intensification andconcentration have on the land.

Long-term set-aside of 20 years has beenproposed. Grants for the education and training of farmers inenvironmentally compatible farming have been implemented e.g. the RuralEnvironmental Protection Scheme (REPS) in Ireland. Organic farming isbeing promoted and a reduction in the amount of fertilisers andpesticides used is being encouraged.

There has also been a general movetowards trying to ensure that small farmers are not pushed off the land bylarger farmers and discriminating agricultural policies. Diversificationin rural economies is being encouraged. Integrated rural developmentprogrammes have also been implemented. Rural infrastructure has beenimproved. Attempts were made to improve research and development at arural level.The EUs Structural Funds are clearly established as the key tenet ofEuropean level policy initiatives.

The Fund consists of four separatefunds – the European Regional Development Fund (ERDF), the European SocialFund (ESF), the European Agricultural Guarantee and Guidance Fund (EAGGF)(although only Guidance is relevant to Structural Funds) and the FinancialInstrument for Fisheries Guidance (FIFG). (24) The Structural Funds areaimed at reducing regional and social disparities in the EU. Between 1989and 194 the funds were allocated 10,000 million ECU per annum. (25)The EAGGF supports the modernisation of holdings, the processing andmarketing of products and agricultural development measures and the promotion of local produce. The FIFG is responsible for the fishing fleet,aquaculture and coastal waters, fishing port facilities and the marketingof fishery and aquaculture.

The ERDF is responsible for investment ininfrastructure, transport, tourism, communications, environmentalimprovements and productive capacity. It also promotes research anddevelopment and provides advice and assistance for Small and MediumEnterprise (SMEs). Finally the ESF is concerned with vocational trainingand counselling, giving aid to self-employed people to start up a businessand education schemes in some priority areas. (26)The ERDFs responsibility lies with Objective 1,2 5b and 6 areas. Itpromotes the development of the Objective 1 regions who are lagging behind,helps to counteract industrial decline and helps reorganise those regionswhich have a low population density or whose population is leaving therural area and migrating to urban centres. Its main objectives are tofoster co-operation between the local actors of different regions with aview to the exchange of experiences through transferring knowledge andexpertise and by working together. It hopes also to improve thecapabilities and working methods of local and regional areas indisadvantaged regions, both economically and socially, so that the regionscan meet the challenges of modern society.

(27)The ESFs aim is to raise the general standard of living by rendering theemployment of workers easier and increasing their geographical andoccupational mobility. (28) It targets in particular the long-termunemployed, those in danger of losing their job, young people, women,handicapped people and the socially excluded. It is governed by Objectives3 and 4 of the Structural Funds.

The ESF also supports the development ofSMEs, tourism and diversification in Objective 1, 2 and 5b areas. (29)The ESF improved employment opportunities by implementing vocationalguidance and vocational training courses. It also helps in job creationand wage subsidy projects.

Finally, it encourages and supportstechnological development and research. For the period 1994-1999 the ESFwill receive 33.5% of Structural funding. (30)The Guidance section of the EAGGF is involved in all agriculturalstructural development in the EU. It invests in and aids the modernisationof farms.

It supports extensification, set aside and environmentallyfriendly farming practices. It also gives aid to young farmers and offersearly retirement. Aid for mountainous regions, poor ecological areas andLFAs is given. It encourages the increased use of agricultural productsand agricultural materials for industry. The Guidance section essentiallycovers grants, mostly contributing to the multi-annual operationalprogrammesope rating under the Structural Fund Objectives 1, 2, 5a, 5band6. It is responsible for the protection of environmentally sensitiveareas (for example intensive valley and marsh grasslands, moorland andhill and mountain areas), encouraging the reduction or abandonment offertilises and pesticides, and maintaining or improving the upkeep ofcountryside features such as hedges and walls.

(31) Like the EAGGF, theFIFG provides sectoral assistance which covers the whole of the EuropeanUnion, corresponding to Objective 5a. Actions under the FIFG promotestructural measures in the fisheries sector. It grants money to modernisefleets and to develop fish farming. It offers protection to some marineareas. It gives aid to help improve facilities at fishing ports.

It helpsin the promotion of products and in the processing and marketing offishery products. (32)A number of rural initiatives have been taken to improve the structure ofagriculture and therefore solve the problems which had been plaguingEuropean agriculture for decades. A bottom-up approach has been taken i.e.local and regional initiatives are supported in preference tonationalinitiatives. According to the Cork Declaration issued 9th November1996:-a rural development policy must be multi-disciplinary in concept,and multi-sectoral in application, with a clear territorialdimension..

.it must be based on an integrated approach, encompassingwithin the same legal and policy framework : agricultural adjustment anddevelopment, economic diversification – notably small and medium scaleindustries and rural services – the management of natural resources, theenhancement of environmental functions, and the promotion of culture,tourism and recreation. (33)A bottom-up approach is used with each interested party submitting aproposal to the EU concerning the improvements that they would like tomake. There are Single Programming Documents (SPDs) for each eligible area.These identify certain strengths and weaknesses in an area. All proposalssubmitted must be based on a particular Priority and Measure. If possibleit should also complement other priorities and measures contained in theSPD.

(34) The EU will make its decision based on the proposal and itsrelation to the SPDs for the area.An example of such a rural development initiative is the LEADER programme.This was an EU initiative which was to assist communities develop theirown areas. It was a multi-sectoral and integrated project. Its aim was tofind new and innovative solutions which would help the development ofrural areas and increase rural integration. LEADER 1 covered 61% of EUland area and 30% of its population. (35) These were mainly rural areaswith a high dependence on agriculture or problems with a decreasingpopulation.

Tourism and SMEs were targeted. Accommodation like B&Bs andself-catering hostels were established. This brought tourism and moneyinto the region and boosted the local economy as well as providingemployment. Small enterprises, particularly those which specialised incrafts, were given aid. For example metalwork, textiles, leather, timberand furniture.

Grants were given also to modernise farms and to helpfarmers farm more environmentally. The profile of the recipients whoaccepted the aid were farmers with above average farm sizes, who wereyoung and well-educated and had access to information and capital. (36)Almost 1,500 jobs were created. (37) Community involvement in rural areasimproved immensely and a sense of local ownership was fostered.

It alsocreated an impetus towards voluntary activities and encouraged co-operation between existing statutory agencies and private agencies who hadworked together under the LEADER programme.An example of one of these LEADER programmes was the West Cork LEADER.This was established in 1991 with the objective of developing the localrural economy. (38) A plan was drawn up through initiatives in key sectorslike agriculture, tourism, food, crafts and fisheries. Partnership was akey element of the programme.

An integrated approach was taken. To date,there have been 125 projects in this area. For example, there has been adevelopment in Castletownbare in co-operative fishing along with thecreation and addition of jobs in the processing of fish products.Diversification was promoted by the development of a herb farm in westCork. A new heritage centre was created in Bandon and a weir project wasalso begun there to help generate electricity for a local residential area.

(39)In the UK the EAGGF has given a total of around 145 million (excludingallocations in Objective 1 regions and under the Community Initiatives)under Objective 5a for the period 1994-99. (40) Most measures are aimed atimproving competitiveness and employment, while there are also measuresproviding for environmental considerations and for balanced land use andemployment in LFAs. The UK decided on using 63% of the funding toimplement measures concerning processing and marketing. 32% has beendedicated to developing mountainous LFAs. 5% has been allocated toinvestments on holdings.

0.3% will be given as support for young farmersand producer groups will receive 0.1%. (41)A total of around 45 million (excluding allocations in Objective 1regions) has been allocated to the UK by the FIFG for the period 1994-99.(42) The UKs Objective 5a SPD for fisheries concentrates on adjustingfishing effort, modernising and improving the safety of vessels, adjustingthe processing industry, and developing ports. A measure for takingvessels out of service is underway for 1993-98. 7% of the fleet hascurrently been taken out of service and it is estimated that by the end of1998 around 12% will have been withdrawn. (43)Can we therefore say that the post-1992 structurally oriented agriculturalpolicy is more successful than the pre-1992 price-oriented one? There areseveral criticisms which can be levied against them. Objective regionscame to rely heavily on the funding, and in some cases like Ireland, theincreased funds represented a substantial augmentation of gross nationalincome. Significant funding-level problems can be seen in examining theSocial Fund’s operation, however. While its allocation increased from 2%of 1977 expenditure, to an estimated 8% between 1994 and 1999, this isclearly insufficient to withstand the tide of unemployment in theCommunity. (44) The Social Fund’s allocation of resources is not highenough to allow the authorities to tackle the underlying causes ofunemployment. The Social Fund has been targeted at training and educationand limited job creation, but fails to address the rigidities and barriersin wage markets and labour mobility. The fund’s sheer lack of financialclout has meant that it has failed to redress the fact that there arecurrently 20 million people unemployed in the EU, with 10 million ofthese classed as ‘long-term unemployed’. An even more scathing criticismof the lack of funding provided is that, of the several targeted Objective3 and 4 areas which target youth and long-term unemployment, by 1993, onlytwo had seen employment growth substantially above the EU average. (45)A further criticism is the fact that although ten thousand million ECUwere allocated to the funds yearly from 1989 to 1993, and monitoringagencies were established to ensure the effective implementation of theFunds, reforms have been severely limited by the actual funding level. By1992, only 3% of the EUs Gross Domestic Product (GDP) was going into theFunds. The benefits of the new funding system have, however been crucialto several regions. Increased industrial activity, improved infrastructure,better farm structures and training of unemployed labour have all boostedregional economies around Europe.One final drawback of the Structural Funds is the notion that the Fundsare swimming against the tide of other EU policies, and thus doomed tofailure. The Guarantee section of the CAP tends to concentrate farmingactivity in the areas of efficient, wealthy farms, clearly against thedispersion aspiration of the Structural Funds. Given the huge commitmentof funds to the Guarantee section of the CAP, the Structural Funds haveclearly an uphill task to dislodge the concentration tendencies.A cursory glance at the raw data proves that the Structural Funds have notcombated the problems they were created to tackle to a significant level.Twenty million people are still unemployed in the EU, and in 1990, GDP percapita in Ireland, Greece and Portugal was still 50-60% of the EU average.(Although these figures have since risen e.g. Ireland stands at 104% ofthe EU average). (46) While it is true that many worthwhile and indeedvital projects have been developed by the Structural Funds, the overallimpact on the EU has been mitigated by a combination of planning,implementation and lack of funding difficulties. The Structural Funds weredesigned to reduce the tendencies towards divergence in the EU, but theselargely remain, and unless an improved financial and developmental base isestablished, the Structural Funds will continually fail to address theirtargets.It cannot be denied, however, that they have had favourable effects. Inthe short period in which they have been in operation, (Structural Fundsdid not become important until 1989 and the subsequent MacSharry reforms),the Funds have been responsible for improving rural co-operation anddevelopment. Farmers are slowly becoming more environmentally aware andusing environmentally-friendly practices. There has been a turnaround ininternal migration patterns with the long-standing rural exodus beingreplaced by what has been referred to as an urban exodus. There isincreasing migration from urban centres to rural areas. This is partly dueto improved conditions, services and infrastructure in rural areas. Thesedevelopments and improvements have been facilitated by the StructuralFunds.There has been a dramatic rise in the number in the number of commutersand an enlargement of commuting catchments. (47) There has been anincrease in the number of people who choose to retire in the countryside.More importantly there has been an increased flow of working-class return-migrants. (48) That the increase in urban to rural migrations wasaccompanied by a parallel decline in the opposite flow, was mainly due tochanging demographic factors. Traditionally the rural exodus was basicallyfed by small farmers and their families but now, with improving ruralconditions for smaller farmers, this trend is slacking off. There has alsobeen a rise in the average rural incomes. (49) In conclusion, this essaymaintains that price policies have a wider range of destructive demeritsthan they have merits. It can be seen from EU agricultural policy that theway forward is seen to be through structural reorganisation. There hasbeen a shift from a pure agricultural policy, however, to a rural policywhose two main characteristics are to help maintain a pleasant andattractive environment through adequate aids to farmers and the adoptionof a bottom-up approach which will integrate rural communities. The newstructurally oriented agricultural policy costs less money to operate thanthe former price-oriented policy and has so far been more successful. Moretime is required however in order to determine whether the policy is trulysuccessful. FOOTNOTESREFERENCES(1) Various Inputs, Internet, (Telecom Eireann, 1998) Treaty of Rome (asamended):Agriculture(2) Josling, T.E. & Langworthy, Mark & Pearson, Scott, Options for FarmPolicy in the European Community (Trade Policy Research Centre, 1981)page 2(3) Various Inputs, op cit. Treaty of Rome (as amended) : Agriculture(4)Gardner, Brian, European Agriculture : Policies, Production and Trade(Routledge, London, 1996) page 30(5) Ibid., page 31(6) Gardner, Brian, op cit., (1996) page 47(7) Marsh, John S. & Swanney, Pamela J., Agriculture and the EuropeanCommunity (George Allen & Unwin Ltd., 1980) page 31(8) Ibid.(9) Gardner, Brian, op cit. (1996) page 49(10) Grant, Wyn, The Common Agricultural Policy (Macmillan Press Ltd.,1997)page 67(11) Houck, James P., Elements of Agricultural Trade Policies (MacmillanPublishing Company, 1986) page 62(12) Moyer, Josling, Agricultural Policy Reform (Harvester Wheatsheaf,1990) page 60(13) Ibid., page 62(14) Gardner, Brian, op cit. (1996) page 54(15) Burger, Kess & De Groot, Martin & Post, Jaap & Zachariasse, Vinus,Agricultural Economics and Policy : International Challenges for theNineties(Elsevier Science Publishers B.V, 1991) page 64(16) Various Inputs, op cit. (1998) GATT(17) Burger, Kess & De Groot, Martin & Post, Jaap & Zachariasse, Vinus, opcit. (1991) page 105(18) Ibid.(19) Various Inputs, op cit. (1998) Agriculture : Regional Policy andCohesion(20) Ibid.(21) Ibid.(22) Ibid.(23) Ibid.(24) Ibid., Structural Funds(25) Ibid.(26) Ibid.(27) Ibid., ERDF : Aims(28) Ibid., ESF(29) Ibid.(30)Ibid.(31) Ibid., EAGGF : Aims(32) Ibid., FIFG : Objectives(33) Ibid., Cork Declaration(34) Ibid., Structural Funds(35) Ibid., LEADER Programme(36) Ibid.(37) Ibid. (38) Ibid., LEADER Programme : Case Study(39) Ibid.(40) Ibid., EAGGF : Case Study(41) Ibid.(42) Ibid.(43) Ibid.(44) Ibid., Structural Funds(45) Ibid.(46) Ibid.(47) Ibid., Cork Declaration(48) Ibid.BIBLIOGRAPHYBowler, Ian, Government and Agriculture : A Spatial Perspective(Longman Group Ltd., 1979)Burger, Kess & De Groot, Martin & Post, Jaap & Zachariasse, Vinus,Agricultural Economics and Policy : International Challenges for theNineties(Elsevier Science Publishers B.V, 1991)Gardner, Brian, European Agriculture : Policies, Production and Trade (Routledge, London, 1996)Grant, Wyn, The Common Agricultural Policy (Macmillan Press Ltd., 1997)Houck, James P., Elements of Agricultural Trade Policies (MacmillanPublishing Company, 1986)Josling, T.E. & Langworthy, Mark & Pearson, Scott, Options for FarmPolicy in the European Community (Trade Policy Research Centre, 1981)Marsh, John S. & Swanney, Pamela J., Agriculture and the EuropeanCommunity (George Allen & Unwin Ltd., 1980)Matthews, Alan, The Common Agricultural Policy and the Less DevelopedCountries (Gill & Macmillan Ltd., 1985)Moyer, Josling, Agricultural Policy Reform (Harvester Wheatsheaf, 1990)Ockenden, Johnathan & Franklin, Michel, European Agriculture : Making theCAP Fit the Future (Pinter Publishers, London, 1995)Various Inputs, European Review of Agricultural Economics1973 : Volume 11989 : Volume 161992 : Volume 19-1, Volume 19-3, Volume 19-41994 : Volume 21-2, Volume 21-3/4(Mouton de Gruyter)Various Inputs, Internet(Telecom Eireann, 1998)Word Count: 5189