Common Agricultural Policy

The Common Agricultural Policy (CAP) is the European Union’s framework for supporting agriculture, rural development, and agricultural markets through shared rules and funding.

Direct payments: Public payments made directly to eligible farmers, often linked to land area or specified conditions. They are a major CAP income-support tool, increasingly tied to environmental and social requirements.
Treaty of Rome: The 1957 treaty establishing the European Economic Community and its common-market institutions. Its agricultural provisions supplied the legal basis for creating the CAP.
Butter mountain: A large surplus of butter accumulated under European agricultural price-support policies. It became a conspicuous example of surpluses generated by early CAP incentives.
United States farm bill: A recurring US law that sets agricultural, nutrition, conservation, and rural-development programs. It offers a national legislative alternative to the CAP’s standing EU-wide framework.
European Agricultural Guarantee Fund: The EU fund that finances market measures and most direct payments under the CAP. It supplies the main budget stream for CAP income support and market intervention.
Sicco Mansholt: A Dutch politician who shaped early European agricultural policy and proposed major farm-structure reforms. As European agriculture commissioner, he helped establish the CAP and later advocated structural change.
Milk quota: A limit on milk production introduced in the European Community in 1984 to curb surpluses. The quota addressed persistent dairy surpluses created under CAP market support.
New Zealand agricultural reforms: The 1980s reforms that sharply reduced New Zealand’s agricultural subsidies and market protections. They illustrate a more radical move away from the producer support used by the CAP.
European Agricultural Fund for Rural Development: The EU fund that finances rural development measures under the Common Agricultural Policy. It supports CAP investments in rural economies, environmental stewardship, and farm modernization.
Mansholt Plan: A 1968 European Commission proposal to modernize farming by restructuring farms and reducing agricultural labor. It exposed the tension between price support and the need to reshape European agriculture.

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