Market regulations for agricultural products are a central instrument of the agricultural policy of the European union. Market regulations are for almost any agricultural product of the grain over sugars up to bananas issued European Union regulations.

The main function of market regulations is the demarcation of the European Union domestic market of the world market with its partially many lower prices. The prices for agricultural products are kept artificially high thus within the European Union, in order to protect the domestic producers against competition from that not European Union foreign country. In order to be able to become their task fairly, the market regulations plan absorptions, export premiums and import quotas as control elements among other things.

In the framework the World Trade Organization in repeated rounds about changes of the market regulations one negotiates.

Absorptions

Absorptions are import duties, which are raised on the import of agricultural products with market regulations. Sense of the absorptions is it to lift the price for the commodity of the low world market level on the level of the price on the European Union domestic market. Absorptions are not tariffs, however from the customs authorities with the import of the goods into free traffic are raised. They are relevant for the computation of the value for customs purposes and the import value added tax. The height of the absorptions corresponds to an impact in for instance the difference between world price and Binnenpreis in the European Union plus for the protection of the own agriculture.

Absorptions are coupled and after these graduated partly to certain ratios. Imports, which lie within the first ratio (e.g. the first x tons of bananas which in one year are introduced), with a low absorption are occupied, goods, which lie within the next ratio (e.g. more than x tons of bananas, but become still no y tons of bananas), with a higher absorption occupied, and all imports, which lie over these ratios, are occupied with the full absorption. This is for example in the market regulations for bananas so regulated, what leads to the fact that at the first working-day of each yearly enormous quantities of bananas for the tariff-legal transfer are announced into free traffic and the ratio is exhausted already completely at the beginning of the yearly. (The banana market regulations were introduced to make around to Spain, particularly on the Kanari islands produced bananas competitive against imported goods made of South America.)

Export premiums

Export bounties are paid for export by agricultural products (also far finished products like e.g. Tiernahrung) from the European Union to the exporter, so that agricultural products from the European Union on the world market can be competitive. The height of the export bounty corresponds in for instance the difference between world price and Binnenpreis in the European Union. With agricultural products, which are too much produced in the European Union (e.g. milk lake or butter mountain), lie above it the refunding partially also, in order to make the export of these goods financially more interesting.

An exception is Hartweizen, whose price is lower in the European Union than on the world market, since Hartweizen is as basis of Teigwaren a very much asked commodity. Here there is no absorptions and it even export duties is raised, in order to lift the price of the commodity on world market level.

See also

• Common agricultural policy of the European Union

Articles in category "Agricultural commodities market order"

We found here 12 articles.