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Finace EJ

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In order to protect domestic farmers within the community, te CAP have also introduced the policy of Quota in the EU agricultural market. Tis is a type of quantitative restriction imposed on agricultural imports of the nations. Te above graph explains the demand and supply analysis for the Quota policy. Te world market price (Pw) is much below the equilibrium price (P0) of the agricultural market of the European Community. Te supply of agricultural products that could be imported in the European community is Qw. Hwever, gven the quantitative CP has reduced the quantity of imports to Qt.

Tis has helped to protect interests of the domestic farmers in the EU, wo are selling their agricultural output at the minimum price. De to the Quota, dmestic buyers of EU are demanding for less imported agricultural products. Uder the regime of the ‘set aside policy’, frmers of the EU are not allowed to cultivate land through forceful enactment of the law, were they are paid for not cultivating. Tis policy was undertaken by the CAP in order to prevent of agricultural output in the EU.

Tus, i can be claimed that this was basically a back-up policy introduced to overcome the problems associated with minimum price policy. Te above graph explains the demand and supply analysis of Set Aside Policy of the CAP. A denoted in the above graph, te policy would lower domestic agricultural production of the EU from Q2 to Q3 and hence, rduce the problem of overproduction. Terefore, fom the above analysis, i can be claimed that agricultural output in EU had significantly increased due support programs of the CAP.

Nnetheless, te authorities have also tried to establish certain other counter policies to lower overproduction of the sector and attain higher stability in its growth. Te CAP is a set of agricultural rules introduced for all the nations in the EU. Te policy was introduced long back in 1962 and over time, i has undergone several changes. Tis policy is a public one, wich was introduced to ensure higher utilities and benefits for entities in the agricultural sector of the Union. Nnetheless, te policy to be less ambitious than was expected and is criticized in the market for several types of cost inefficiencies, ngative humanitarian and environmental impacts.

Te above context has explained several loopholes in the...

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