Transformations  in
Business & Economics

Formation of the European Agricultural Support Model: Reasons, Principles and Tendencies
Edmundas Jasinskas

ABSTRACT. This article presents the reasons for the European agricultural model development, which were affected by historical, political and social causes. Also this article focuses on principles of Keirns opposing agricultural model, which make reference to liberal values, but necessarily confront with creation problems of public mischief, which is misjudged by market. Support level for agricultural producers in EU countries during recent years fractionally declined, but the mechanism of support distribution is changed by dissociating support from production and by binding up support with creation of social goods. When there is competitive agriculture it is created not only public goods but also public mischief (airs, waters pollution, soil erosion and others) therefore it is needed monitoring and levy of public mischief. In European agricultural model we could create market of public goods and mischief by using the lever of support and tax. Such model tendencies do not guarantee that European agriculture will become competitive. This could decrease government’s intrusion and raise markets mechanism influence on supply of agricultural products.

KEYWORDS: support, agricultural, European model, single payment scheme.

JEL classification: Q01, Q18, Q58, D60, D71, F12, H25.