Correction of the course of agricultural policy of the European Union based on the example of the Federal Republic of Germany

Abstract

The purpose is an analytical study of the issues related to the changing of the course of agricultural policy of the European Union on the example of the Federal Republic of Germany. Methods – monographic, comparative analysis, abstract-logical. The dynamics of the structure of the EU budget for 1993-2027 is considered. Since 1993 to 2006 the share of agriculture on average accounted for about 40% of budget funds, in 2006-2020 – about 30%, and for 2021-2027 – 23.6% is provided. Results – the authors note that in the European Union there are two components of state support for agricultural sector of economy. The first one implies direct payments to commodity producers, which are provided for one hectare of agricultural land if farmers meet the relevant conditions. This also includes general market mechanisms applied to certain types of agricultural products. For example, reimbursement of export costs and storage costs. The second component is used as an additional tool for solving AIC problems. Since 1999 it includes targeted programs for financing sustainable and environmentally friendly production and development of rural areas. Conclusions – in recent years, the bulk of government subsidies (up to 70%) directed to support the income of agricultural producers accounted for direct payments. In the earlier period, the structure was radically opposite. For example, in the early 1990, market expansion measures were 91%, direct contributions were 9%, and there was no cash allocation for improving rural infrastructure. The reverse side of this process is that agro-industrial complex is largely dependent on direct payments.