Into effect in 1963 with four basic principles a

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into effect in 1963 with four basic principles: A unified market for the free movement of agricultural products in the European Union covered by community preference.
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Financial solidarity: All costs of the CAP were to be fi- nanced out of a communal treasury, FEOGA (European Fund for Orientation and Agriculture Guarantee), supported by import tariffs and contributions from European countries. Community preference: European products were to be given preference over imported products. Parity and productivity: Farmers’ incomes were to be equal to incomes in the other sectors, with reasonable prices in order to permit food access to the consumer. Common Market Organizations (CMOs) were also introduced in the original CAP and still exist today. Within CMOs, each group of food and agricultural products is organized by harmonized rules. CMOs set minimum prices for products at the EU-wide level. Currently, there are 21 Common Market Organizations. During the 1960s and 1970s, the CAP led to increased agricultural production in Europe and was generally considered a positive vision for growth in the post-war region. However, by the 1980s negative environmental effects of increased production (e.g. water pollution and soil impoverishment) began to surface. Structural overproduction became entrenched in European agriculture, which routinely produced more than those in the community could consume. As part of this trend, storage for surpluses in products such as milk, cereals and meat became increasingly expensive, and the European Community began exporting its excess products at below world prices (known as dumping).1 In the 1980s, the EU began its systematic reform to deal with overproduction, negative impacts on the environment and dumping. Shorter: The Cap began to pose problems in the 190s: agricultural surpluses soon began to accumulate, and the cost of the CAP increased dramatically; but an inflationary bias in decision-making prevented reform 8. Principles of CAP and its characteristic (especially Community Market Organization) The objectives of the common agricultural policy shall be: (a) to increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour; (b) thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture; (c) to stabilise markets; (d) to assure the availability of supplies;(e) to ensure that supplies reach consumers at reasonable prices. Common Market Organizations: Currently, there are 21 Common Market Organizations and the EU Agriculture Commissioner, Marian Fisher Boel, has proposed to collapse them into one single Common Market Organization as a means to simplify the CAP and to increase EU competitiveness in the world market. The Common Market Organizations govern production and trade of agricultural products from each member states of the EU. They aim to reach the CAP objectives and notably stabilize the market, increase
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agricultural productivity and guarantee a stable income for farmers. The
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