EC AGRICULTURAL SURPLUSES AND BUDGET CONTROL

Abstract

Attempts to limit the EC agricultural budget have focussed on the problem of controlling surpluses of agricultural products. An alternative strategy is to impose cash limits directly on specific agricultural support expenditures. This paper shows that the coresponsibility measures favoured by the Commission could, with minor modification, become vehicles for cash limit control of support expenditure, but the penalties for over‐production would have to be more severe than in the past. Cash‐limiting policy options are compared in terms of producer incentives and their effect on producer revenues.