06/14/05

The aim on the CAP Policy is to provide farmers with a reasonable standard of living and consumers with quality food at fair prices. The Cap began 50 years ago by subsidizing production on basic foodstuff in the interest of self-sufficiency. Nowadays the EU gives direct payments to farmers as the best way of guaranteeing farm incomes, food safety and quality, and environmentally sustainable production.

The CAP budget now is just below 50% of the whole EU budget but less than a decade ago it was over 70%. This budget is divided up into main primary industries and many countries. Countries which are less economically developed will have more help than other richer countries. The basic principle is to give financial aid to farmers so they can keep on producing their products at a lower price and hence be competitive in the market.

The budget has decreased steadily as production is more efficient and because surpluses are not happing any longer. The CAP budget is going to other areas which can bring good revenues to the local countryside population and are not harming the environment as much as agricultural. Consequently the CAP gives 13% of its budget to rural environments. This money is used to create more wealth in the communities that tend to be poor.

The aim of this division is to build up weak-end trips for people living in towns. Many old houses ion the countryside have been renovated and accommodated for people to stay there for a couple of days. While they are there other locals can offer services like restaurants, horse riding, tracking and so on. These businesses are much more productive than agriculture as they have higher margins. Another part of the budget also goes to increase the communications with other cities to increase the flow of people, products and investment.

Businessmen from the city are starting to see the opportunity of investing in this area. First of all they can receive financial aid from their local governments, some of that money comes directly from the EU’s funds. Secondly they can also receive credits at a very low interest rate.

Tourism in many European countries is an excellent form of revenue but it always localized in certain areas like Southern France and Spain. It is important for the EU and these members to help other regions so that they don’t have to leave their houses in the center areas of these countries.

These two members arte trying to decentralize and stop the flow of people of these areas as they are damaging heavily the coastline. For these reason it is imperative to find solutions like making locals and other nationals to rural areas for holidays and hence divide the tourist expenditure among more regions.

Examples

http://www.oxfam.org.uk/what_we_do/issues/trade/bp55_subsidies.htm

http://europa.eu.int/comm/agriculture/publi/capleaflet/cap_en.htm