Reform of the EC agrimonetary system: A Public Choice approach

The 1984 reform of the EC agrimonetary system provides an excellent example of a policy outcome that could have been predicted using a Public Choice approach. Despite attempts at limits on CAP spending, the reform led to an immediate rise in EC agricultural prices of at least three per cent, and is likely to result in further price increases in the future. Once again politicians and bureaucrats in the EU decision-making process put farmers' interests before those of the general public. Moreover, the technicality and complexity of these issues means that few taxpayers or consumers are aware that compromise has been reached at their expense. The aim here is to apply Public Choice theory to illustrate why such a reform was introduced. Inevitably, this will first involve a definition of Public Choice, and an indication of the advantages of using it in this context. then there is a brief discussion of the agrimonetary system, its need for reform and the issues any reform proposal must resolve. This is followed by a description of the 1984 reform, and an analysis of the agrimonetary system using the Public Choice approach.