Farms have had to modernize, leading to new industrial activities such as farm mechanization, fertilizers, animal feeds, etc.
The EU has reached the auto-sufficiency. In 1962, the Community produced only 80% of its food consumption; this has now risen to 120%. The growth in production led to the expansion of the food-processing industries in terms of both quantity and quality and to increased trade with third countries, so that the EU has now become the second largest exporter of agricultural products in the world, while remaining the leading importer.
As for consumers, they have seen great changes taking place in their supply conditions. Along with food security has come real price stability. Today, food represents only 15% of the spending of European households.
However, the CAP has been in some ways a victim of its own success and has gradually had to face numerous problems…

Pressures for change.

European surpluses
EU farmers were producing more than the market could bear, creating excessive surplus. Indeed, some consequences of the original support mechanism were very negative. The system of helping farmers through increased prices and agricultural levies resulted in the highly publicized embarrassing surpluses: the butter and beef mountains; the wine lakes; earlier on, the grain and sugar surpluses; and later on, the milk lakes. Fig. 2. Illustration of surpluses
The analysis of surpluses can be done from the figure n.2. A target price P3 would result in a surplus ad which the EU authorities have the obligation to buy from the farmers. Assuming that the world price is P1, a subsidy (or restitution payment), equal to area andj would be needed to dispose of the surplus in world markets. At an intervention price of P2, the surplus would be fg and the costs to the EU would be area fgmk. However, the actual cost would be in excess of these amounts since there would also be storage and/or disposal expenses. As a consequence of this situation, EU spending in agriculture increased exponentially. Indeed, in the middle of the 80’s, most of the important products (cereals, milk, wine) have worrying sized stores. The volume of the exchanged stagnates. Hence, agriculture expenditures increase more and more although the own resources of the Community are insufficient. The EAGGF budget is multiplied by 2 between 1980 and 1984. And the CAP represents around 50% of the global European budget, even to 65% some years.