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The Common Agricultural Policy (CAP) is a European policy whose raison d’être is to support European farmers. The European Commission (EC) website details the overall purpose by explaining that the CAP is ‘aimed at supporting farmers’ incomes while also encouraging them to produce high quality products demanded by the market and encouraging them to seek new development opportunities, such as renewable environmentally friendly energy sources’.

The CAP accounts for a substantial proportion, 41% in 2009, of the European Union (EU) budget. It is divided into two main categories: income support (Pillar I) and rural development (Pillar II). In 2011 the EC proposed allocating 72.8% of the CAP budget to Pillar I, 23.2% to Pillar II and the remainder to an emergency fund and a separate fund to support farmers if they lose their jobs as a result of changing global trade patterns.

The CAP remains a central component of the EU’s internal agricultural and social development policy, and the policy’s primary stakeholders – European farmers and related agricultural industries – have strong incentives to maintain its focus, budget and clarity of objectives as an internal EU policy instrument.

This paper looks into different institutional options for monitoring the Common Agricultural Policy's external effects on developing countries and to help strengthen its contribution to international development.