The EC budget and agricultural policy reforms, with special reference to cereals
The aim of this thesis is to explore the links that exist between the Common Agricultural Policy (CAP) of the European Communities (EC) and the EC budget. In particular, the thesis examines the impact on the budget of reforming the CAP. It shows that the nature of support offered under the CAP up to the 1992 MacSharry reforms has a strong historical precedent in French and German history. It then goes on to examine in greater detail the support mechanisms of the cereals and oilseeds sectors. The cereals sector is focused on because of its importance in agricultural output and in total agricultural support expenditure by the EC. Oilseeds is considered for its policy linkages with cereals in both production and consumption. The detailed nature of expenditures on these sectors is examined in detail, with particular emphasis placed on costs and policy problems arising out of intervention storage. In forecasting future expenditures under different policy scenarios, cereals production and consumption are considered separately. Imports, exports and intervention behaviour are also considered, to permit the examination of all aspects of the cereals market that affect expenditure. The impact of the 1992 MacSharry reforms is compared to a strict continuation of the 1988 stabiliser reforms and a price freeze at 1992 levels for the forecast period to 1999. It is shown that the impact of the 1992 reforms is to reduce the extent of the market imbalances by 1999 as compared with the base scenarios, but unless the level of compensatory payment is cut, then by 1999, the EC faces a support bill that is higher under the new policy than would have been the case had the 1988 reforms been retained.