There are three main reasons that call for substantial reforms in European Agricultural Policy: the financial burden on the European economy, development and trade-related issues, and the upcoming eastern enlargement of the European Union. All three factors exert pressure into the direction of abolishing interventions and following the path towards liberalized agricultural markets. However, the opposition against such policies is strong, primarily exercised by agricultural interest groups and member states of the European Union that mainly benefit from the current regulations. The abolishment of agricultural support in the European Union would be one of the most important measures to alleviate the problems for developing countries that have no fair chance to compete in European agricultural markets. Furthermore, by reducing the distortions that are caused by agricultural regulations, economic efficiency would be enhanced substantially. In this respect the European Union is on the right track with the reform based on the “Agenda 2000” and further changes in the “Midterm Review” that was adopted in July 2002. All support measures are supposed to be turned into direct payments. Yet, a great number of distortionary measures is reintroduced through the back-door under the title of rural development. Since these measures do not fall under the budget constraint that has been imposed on all other forms of support, they provide a vast playing field for politicians. The need to liberalize agricultural markets has become crucial due to the eastern enlargement of the European Union that will increase agriculturally utilized land by approximately one third. Granting the full support to the new member states would mean expanding a system that suffers from various illnesses. For these reasons there is an urgent need for substantial reforms that liberalize agricultural markets in the European Union.
Journal for Economic Policy is published on behalf of the Institute for Economic Policy at the University of Cologne. The Journal is open to publications from all areas of economics. Articles regarding current questions of German, European or international economic policy are preferred. At the center of each issue is the economic policy forum. It deals with topics, which are controversially discussed among the general public.