Importance Of Agriculture Policy For European Union Essay

Importance Of Agriculture Policy For European Union - Essay Example European Union region possesses a large export market for agricultural goods. Its exports value for 2010 amounted to more than 90 billion Euros (European commission 2011). European Union has become the leading exporter of agri-products. Its agricultural exports superseded that of US in 2003. In 2003 the EU exports of agricultural products amounted to $66 billion and that of US amounted to $64billion (European commission 2007). European Union also imports agricultural products that worth many billion Euros. However its exports have been significantly higher than its import of agri-goods in the past decade. The balance of trade of EU in agricultural product has also been improved in the past decade. The following table shows the European Union Exports and Imports from 2000 to 2006. The balance of trade was negative in 2000 through 2004. It, however, improved in 2005 and amounted to $6 billion in 2006. EU exports of agricultural products amounted to $135 billion in 2010 (Wall street jou rnal 2011). European Union has Common agricultural policy (CAP). CAP came into existence in 1950’s after the destruction of World War II. CAP was formulated with the vision of avoiding any possible food shortage that EU countries might face due to the massive destruction in World War II. A budget was decided to support, invest and regulate agricultural market in EU region. Initially CAP claimed around 50% of European Union Budget (Visegrad 2010). CAP aims at such regulations and action plans that ensure the safe, healthy and competitive agri-products to be consumed inside the region and exported as well. Primarily, the CAP’s focus has been on the subsidies given to farmers to ensure high production but now due to several factors the CAP’s focus, in its new proposed policy, has been on the policies for agriculture that ensure a farming that meet the standards of environmental security as well as provide competitive products to the EU region and International comm unity. Common agricultural policy takes a very high bite of the EU budget. In 2009 its budget amounted to 55 billion EUR which is about 44% of the total budget of European Union (European commission 2010). This paper will discuss the agricultural policy of European Union, its inception and primary objectives at the time of its formulation. The paper will discuss the importance of agricultural policy of European Union by referring to the important agricultural policies and discussing therein the importance of such policies. Moreover the paper will also discuss the new proposed policies for agriculture and their importance in the changing world scenario for European Union specifically and International community at large. Initial CAP and its importance In its early years, CAP adopted a policy where it provided the subsidies and had a system where the farmers were assured of high prices for their commodities. It also provided a policy for substantial financial assistance to improve and restructure farms and to implement new technological developments in the agricultural production. The underlying objective of CAP at the time of its establishment was to take such measures so as to avoid a possible food shortage in the region, to increase productivity of agricultural sector, to stabilize markets and to ensure price competitiveness of products (Stead 2010). These policies played a very important role. These helped EU region to get out of the fear