| Abstract: | This paper begins with a summary of the current state of Community financing of the Common Agricultural Policy. A brief survey of the currently discussed options for change leads to the conclusion that feasible developments will involve extension of the use of existing instruments rather than wholesale reform. If agreement on such extensions cannot be reached, there is likely to be unplanned nationalisation of agricultural support expenditures. The economic impacts of three measures to cope with surplus production using existing policy instruments-price reductions, co-responsibility levies and supplementary levies-are analysed, as is a possible budgetary solution to the surplus problem-surplus contributions. The paper concludes with some remarks about the desirability of these various development options and the role of economists in the debate about CAP reform. |
