Agricultural Market Stability in the Future Common Agricultural Policy

Abstract

Market stability represents one of the general objectives of the Common Agricultural Policy (CAP), reconfirmed by the Lisbon
Treaty. The purpose of this paper is to study the impact of market stability in the context of price volatility for the post-2013 CAP. The
political and economical context in Europe highlights the need for a new approach to cope with market volatility in order to create a
stable business environment. The research method is the analysis of data with a view to express a personal opinion in this regard. Price
volatility depends on several determinants like: balance between supply and demand, interlink between food and energy markets, trade
liberalization, environment and climate change. The negative effects generated by instability in the agricultural markets can be reduced
through the development of the existing instruments, the use of new mechanisms to stabilize supply, price and income, market
transparency and cooperation. Farmers should adjust their business to market conditions and have to be protected against extreme
volatility, innovation, education and training being important in this way. A special attention should be given to the interaction between
the objectives of Agenda 2020 and the CAP. The results of the research point out that market stability is important for the CAP post-2013
and can be promoted using a combination of instruments like: modern technologies to stabilize yields, contracts, hedging, insurance
systems.