Agricultural Policy of EU and Its Criticism - Essay Example

By imposing import tariffs to goods exported by farmers in developing countries, and by undercutting them in their domestic markets where the oversupply is dumped unhindered by any imposed tariffs, the CAP is actually choking business in those countries and in reality, is forcing them back into an economically disfigured subsistence lifestyle ("Common Agricultural Policy, "par.50). So much so that the Human Development Report in 2005 termed CAP as an extravagant plan that is wreaking havoc in global sugar markets.

They have also been criticized for creating artificially high food prices throughout the EU. High import tariffs have managed to hinder competition by non-EU producers and it's reported that support to farmers of the OECD countries has cost a family of four about an average of $1000 per year because of rising prices and taxes ("Common Agricultural Policy," par.52). Even though policymakers in the EU argue that they want to help small farms and their small scale production, the CAP has been seen to have aided larger producers more.

Although this problem since the 2003 reforms has reduced, the profits are generally channeled to large-scale farmers. Along with the subsidies going profit hunting, they have allowed un-ecological methods of increasing production, such as the indiscriminate use of fertilizers and various pesticides resulting in serious damage to the environment. It is argued that without government intervention and allowing for a free market to prosper without government-imposed regulations, it would result in a more efficient allocation of resources.

They have used the example of over-production occurring because of the setting of artificial prices that resulted eventually in the creation of the infamous Grain Mountains ("Common Agricultural Policy, par.60) where large amounts of unwanted grain were purchased from farmers above market price. Too few Europeans benefit from this program. Only 5% of the EU's population work in farms and the farming sector is responsible for only 3% of the EU's GDP ("Common Agricultural Policy," par.62). The pressure is increasing for farm subsidies to be removed, especially after the 2007-08 world food crisis.