Poľnohospodárska politika a európska integrácia
AGRICULTURAL POLICY AND EUROPEAN INTEGRATION

Summary/Abstract: The Common Agricultural Policy (CAP) of the European Union (EU) has protected European farmers while distorting world markets and creating a major problem for the European Community’s budget. The primary objective of the CAP is to redistribute income from the non-farm sector to farmers. Commodity price supports with import barriers and export subsidies (along with output controls) have been the most common means used by the CAP to achieve this objective. A common support price to all coun-tries is the cornerstone of the CAP. The EU’s price support mechanism implies two types of income transfers to farmers: a transfer from consumers and taxpayers to farmers and a transfer from one country to another. The former type of transfer is accomplished through transfers to farmers from consumers who pay higher prices than they otherwise would with import levies and sometimes alternative forms of production controls, and from taxpayers who finance production and export subsidies and other policy instru-ments dealing with excess production. Inter-country transfers occur indirectly because of the „financial solidarity“ in financing the CAP with the common budget and of net posi-tive and negative trade positions between countries. Contributions to the common budget consist of revenues from import duties, producer levies, and contributions from member states as a per cent of their value-added tax (VAT) base. After 1988, budget revenues are determined as a factor of gross domestic product (GDP), depending on the amount needed to balance the budget. An individual country’s benefit from the CAP depends on the sectors obtaining subsidies, the country’s net trade position (reflecting consumer transfers from one country to farmers in another) and the relative size of that country’s production relative to total production in the EU.The decision-making on the CAP is institutionally complex. The European Commis-sion and the Council of Agricultural Ministers play an important role in decision-making on the CAP. The latter are strongly influenced in their positions by pressure from interest groups in their countries. In our paper we develop a two-stage political economy model that explicitly models the complexity of decision-making in the EU on the CAP, and use the model to investi-gate the impact of accession of Central and East European Countries into the EU.In the first stage (which takes place at the member state level) national governments choose their optimum amount of protection of domestic farmers through the CAP, reflec-ting preferences and differential influences of voters and interest groups. In the second stage (which takes place at EU level), we model the CAP decision-making. European Commission proposes a policy position and Council of Ministers votes on the proposal whereby the voting of each minister is determined by the politically optimal policies for the government the minister represents.

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