The fluctuation in exchange rates has thrown the agricultural policy mechanisms worked out for fixed rates into confusion. For years two zones have existed in Europe — that of strong currencies with fixed compensatory payments to subsidize their agricultural exports and that of weak currencies on whose exports was levied a variable tax. The persistence of this situation has led to distortion in exchanges and in the geographical implantation of the production. Banking mechanisms enable the uncertainty caused by fluctuation in exchange rates to be lifted. The European monetary system has given rise to the hope that the stock of monetary compensatory payments may some day be reduced.
