The EEC has established a common agricultural policy (CAP) for the Common Market countries. The CAP, worked out for each major farm commodity, was originally designed to create free trade for that commodity within the community. Special subsidies by the individual countries, and other national farm programs, were to be eliminated to prevent competitive advantages. The first of the regulations implementing the CAP were enacted in 1962 and applied to grain (except rice), poultry, eggs, live hogs and whole hog carcasses, fruit and vegetables, and wine. Similar programs were developed later for beef, dairy products, sugar, rice, and fats and oils.
The most important features of the CAP mechanism are the target prices, the threshold prices, the support or intervention prices, the variable levies on imports to make up the difference between landed prices and threshold prices, and export subsidies or refunds equal to the difference between market prices in the EEC and in the importing country. For most CAP commodities the primary device for achieving target prices is the variable import levy. This levy, which fluctuates with the import cost of a commodity, keeps the domestic price at or near the target price if the commodity is imported. When EEC production of a commodity exceeds EEC consumption, the authorities may purchase the commodity for storage, pay to have it processed for another use (e.g., wheat may be denatured and sold as a feed-grain), or subsidize its export to countries outside the EEC. With these techniques the EEC has been able to maintain farm prices at levels substantially higher than those prevailing in the United States and Canada.
Throughout the 1960s the EEC did nothing to limit or control the production of agricultural products. When large stocks of butter and dry skim milk accumulated, and as the costs of maintaining dairy product prices and subsidizing wheat exports mounted, consideration was given to reducing production. A payments program to induce shifts from dairy to beef production was inaugurated, and there was talk of reducing the area cultivated for grain. Output limitation has been made difficult, however, by the significant differences in circumstances among the farmers in the various EEC countries.
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Efforts to control agricultural prices go far back in English history, although the early objectives were quite different from those of more recent times. The Corn Laws of the 15th century were designed to prevent prices from becoming too high; restrictions were imposed on the right to export corn (wheat) when the domestic price exceeded a specified level. In 1663 the laws were revised to prevent prices from falling too low, by including import duties when the home price did not exceed a specified level. The general trend, until the Corn Laws were finally abandoned in 1846, was increasingly toward ensuring higher prices for home producers through the payment of export bounties and by the restriction of imports until prices reached specified levels. After 1846 the British followed a free-trade policy for agricultural products but moved to the protection of agriculture and the establishment of minimum prices for certain farm products during the depression of the 1930s. Protection was expanded after World War II by legislation in 1947 and 1957 which sought to support farm prices primarily through deficiency payments to farmers, covering about 95 percent of total output. In most cases the domestic price was free to vary with changing demand and supply conditions; local products competed with imported supplies that were generally subject to relatively low tariffs. The farmer was reimbursed for the difference between his average realized price and a guaranteed price. The Agricultural Act of 1957, which gave the government the right to limit the amount of agricultural output on which deficiency payments were made, was designed to reduce the cost of the program and to encourage domestic production.
The British system of supporting farm prices, while allowing consumers the lowest possible food prices in the world market, was gradually abandoned during the late 1960s as the United Kingdom prepared for entry into the European Economic Community (EEC). When the United Kingdom entered the EEC in 1972, its agricultural prices began to rise to the much higher level prevailing within the EEC. The United Kingdom, moreover, imports more food and live animals from EEC countries than it exports, leading many British to question the value of membership in the EEC.
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Since the enactment of the Agricultural Adjustment Act of 1933,the United States has had programs designed to limit the production of major farm crops through restrictions on acreage. Since that date it has also offered price supports for major crops such as wheat, feed grains, rice, tobacco, peanuts (groundnuts), and cotton, as well as for manufactured dairy products. It has not had price-support programs for perishable crops or for major livestock products except for a few years during and after World War II.
The price-support method most widely used has been the non-recourse loan made by the Commodity Credit Corporation (CCC): the farmer may repay the loan by delivering his produce at the support price or “redeem” it in cash if the market price is higher. The amount of particular crops offered for price-support loans has varied greatly from year to year, as have redemptions.
Most of the farm products given price supports were crops normally exported by the United States. Until the mid-1960s the price supports were above the export prices. Unless export subsidies were paid to make up the difference between domestic prices and the prices foreign buyers were willing to pay, exports became impossible. Export subsidies were accordingly paid on such farm commodities as cotton and grains. In the 1960s the support prices for the major export commodities, except tobacco, were established at levels near or slightly below world prices to permit market forces to manage the distribution of supplies between domestic and foreign markets. The lowering of support prices was accompanied by a substantial increase in the size of direct payments to farmers. By the end of the 1960s such payments had come to constitute a high percentage of the cash receipts from farm marketings: in cotton, 60 percent; in wheat, 40 percent; and in feed grains, 30 percent. These payments fell sharply in the late 1970s, largely as a result of increased demand.
In order to receive payments, farmers had to agree to limit the acreage devoted to specified crops. At the beginning of the 1970s the various programs had resulted in the diversion of approximately 20,000,000 hectares of land from the production of major farm crops. The number of acres diverted from cultivation fell sharply, however, in the late 1970s and early 1980s.
A major component of U.S. farm price policy since World War II has been the disposal of surplus produce abroad through the economic aid program. This began as an outgrowth of wartime Lend-Lease, and food exported from the United States made a major contribution to the postwar recovery of western Europe. The Agricultural Trade and Development Act of 1954 provided a base for continuing such activities, and gradually the emphasis shifted from western Europe to the developing countries. One of the important effects was to dispose of farm products that could not be sold either domestically or in regular commercial foreign trade. Without this the farm income and price objectives could not have been achieved except by more stringent output limitations, lower farm prices, and larger direct government payments.
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Acadian orogeny is a mountain-building event that affected the northern portion of the Appalachian Geosyncline from present-day New York to Newfoundland during the Devonian Period (408 to 360 million years ago). Orogenic activity began during the Early Devonian in Gaspé, spread westward throughout Devonian time, and affected the western margins of the geosyncline in Late Devonian time. The orogeny was most intense in the Merrimac area in southern New England and in Maine and extended northward to the Central Volcanic Belt of Newfoundland. Evidence for the Acadian orogeny consists of abundant angular unconformities (non-parallel strata) and igneous intrusions, regional metamorphism, and deformation of pre-Devonian and Devonian rocks. Additionally, the westward spread of clastic sedimentary wedges and red beds probably resulted from Acadian uplift in the interior portions of the geosyncline. The Catskill Delta in New York and eastern Pennsylvania represents the westernmost of these clastic wedges.
The cause of the Acadian orogeny has been ascribed to the collision of the northeastern portion of the North American Plate with western Europe.
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