Geography For Schools

• Price support – to help regulate farming prices.
• Structural policy – to support developments in farming.

The price support mechanism

The Council of Ministers of the EU sets a target price that farmers should receive for each product.

They also set prices at which the EU will intervene:

• A floor (or ‘intervention’) price – if prices fall below this level, the EU intervenes and buys some of the product to stop prices falling further.
• A ceiling (or ‘threshold’) price – if prices rise above this level, the EU will allow imports of the product, so encouraging prices to fall back towards the target.

The structural policy

Price support alone is not enough, especially for very small farms. The CAP therefore provides a number of other sources of support for agriculture.

These include:

• Aid for farms facing specific problems; for example hill farms can obtain extra grants.
• Aid to encourage farmers to modernise or diversify; for example, there are grants for some forestry schemes