The Common Agricultural Policy (CAP) of the European Community : Germany
The supply of important products soon far exceeded demand. Through the introduction of quotas for the product categories milk and sugar, it was possible to limit supply in these categories very early on. Nevertheless, further measures to ease the strain on the markets were necessary. The EC agricultural reform resolved in mid-1992 marked a fundamental reorientation of the Common Agricultural Policy.
It above all provided for cutbacks in or elimination of the previous market price supports, compensation of the resulting losses in earnings through direct income transfers in the form of acreage premiums (cereals, oilseed, protein plants) and animal premiums (cattle and sheep), and more effective control of production volume (including seasonal set-asides). Through the reduction of price supports and through additional measures, the reform promotes extensive farming methods and thus more ecologically compatible agricultural production. In the context of the EC agricultural reform, agreement was also reached on supporting measures, including scope for promoting particularly environmentally friendly agricultural production methods.