The European Community & Agriculture Policy

Inequalities exist in any market where the price paid by the consumer does not equal the cost of the producer to produce the item. Inequalities may also exist if their is substantial public benefit or public cost associated with the production of the item. Currently, the Common Agricultural Policy (CAP) has contained within it both public goods and public costs. The public goods and public costs, which are included implicitly and explicitly manipulated through the CAP, can be shown clearly by the situation found in France.

In France, the farmers comprise only about 5 percent of the labor force. This small percentage of the labor force represents for the country their heritage. The French people are strongly tied to the notion that they are an agrarian people. The French agricultural community gives an identity to the French people. This

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r-use of chemicals, and the use of marginal land for fields with low productivity both contribute to the environmental cost by increasing the level of pollution. Further inefficiencies develop when France attempts to rid itself of the surplus agricultural products it has acquired. Dumping , as it is commonly called, refers to the undercutting of a commodities world price to eliminate a surplus. Dumping implies extreme levels of misallocation of resources for both the country which is doing the dumping and the country which receives the dumped goods. As the result of dumping, the countries of the European Union are paying higher prices for food and forgoing other possible goods which they would purchase if resources were allocated properly. The CAP does not permit the flow of low priced international food products into its countries. The European Union then dumps subsidized goods onto the international market depressing the international farm products' price. Either of these actions alone would distort the point of equilibrium for agricultural products together they create a great disparity between the natural equilibrium and what is actually witnessed. The highly subsidized internal prices for farm products coupled with
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Some common words found in the essay are:
European Community, France France, European Union, Agricultural Policy, Eastern European, GDP France, European Agreements, Middle East, Union France, Central European, european community, agricultural products, farm products, european union, free trade, french farmers, labor force, european countries, common agricultural policy, international market, agricultural policy, eastern european countries, free trade agricultural, trade agricultural products, public public costs,
Approximate Word count = 1876
Approximate Pages = 8 (250 words per page)

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