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Abstract
In European market economics, farm incomes are strongly influenced by policy actions. Their effects can be analyzed using a free market sector as theoretical benchmark. Sectoral policies produce various social costs and benefits. They influence resource allocation, income distribution and other non economic objectives. The paper evaluates market stabilization, and price support policies as well as those concerning factors of production and technology. One of the major issues is the combination of the various price and income policies in order to attain a given set of policy goals in the farming sector. This theoretical analysis shows that the various policies at work in the EEC are quite inadequate considering its main welfare goals.