European Economics Essay Example | Topics and Well Written Essays - 2500 words

European Economics - Essay Example But this has supported unsustainable agricultural sectors. Therefore, after three reforms in 1992, 1999 and 2003 it has been reduced to 45%, which is 55 billion euro per year, with the prospect of further reductions in regard to new long term EU budget of 2014 – 2020. (EC. 2005; Doliak, 2004; Europa, 2011) There were two pillars of CAP. The first pillar was the current Single Farm Payment whereas the measures of the second pillar aimed to support development and diversification of rural communities. The CAP Health Check was launched in 2008, so as to modernize the policy and provide assistance when answering to new challenges such as climate changes. The EU 27 also agreed to further cut direct subsidies to farmers, so that there can be benefit of the rural development policy and also to  abolish quotas on milk production. (ELO. 2001; EC., 2003) The future of CAP beyond 2010 in context of the general reform of EU budget has started in 2010. The European Commission highlighted the fact that agriculture must do more to mitigate climate changes and consider the option to establish the third pillar of CAP focusing on this issue. Also it stressed that the current single payment scheme could by maintained but targeted at providing public goods so as to real EU added value. Former commissioner Marian Fischer Bowl has committed to the farmers to carbon emission will be reduced by 20 % by the year 2020. (Europa, 2011) The biggest recipient of CAP funds was France. The largest per capita beneficiaries from CAP were Greece and Ireland. All four graduated countries were net beneficiaries of EU budget and CAP funding. At the start of February 2010, the ministers of agriculture of Hungary, Slovakia, Poland, Romania, Lithuania, Latvia, Estonia, Cyprus and Bulgaria agreed in Warsaw on common statement on the future of CAP after 2013. They wanted both pillars to be preserved. They also opposed to the idea of basing the payment level on historical principle. The economic crisis seriously attacked the European agricultural sector, especially the Dairy Farming. Farm milk prices began to fall in late 2008 until it brought the whole sector at the edge. Europe was a witness of several protests of farmers calling for action against volatility of prices and phasing out milk quotas as soon as possible, due to surplus production of milk and dairy products and falling prices. (Europa, 2011) In about 2020, the European Commission will publish a Communication on CAP which will meet the food, natural resources and territorial challenges in the near future. The reform focused in making the European agriculture sector more dynamic, competitive, and effective in responding to the Europe 2020 vision of stimulating sustainable growth, smart growth and inclusive growth. The paper outlined three options for further reforms. In mid 2011, the Commission will present formal legislative proposals following the discussion on these ideas. (Europa, 2011) On the basis of the Communication today, the Commissioner of EU Agriculture and Rural Development highlighted on the importance of making CAP greener, fairer, more efficient and more effective. As per him, CAP will not be just for farmers but for all the EU citizens – as consumers and taxpayers. Hence, it is important that we design our policy in a way which will more simply