... when there was sufficient amount of it the subsidies were removed. E.g. in 1993 there was a shortage of oil, so subsidies were placed on oil seed rape. It became very expensive. Farmers were paid up £445 per hectare to grow it. In 1995 there was sufficient amount of it, so the subsidies were removed. Just as there can be a shortage of product, there can be a situation when we have too much of product, this is called overproduction. The CAP introduces 2 further policies: 1) Quotas - there were introduced to limit production. Farmer can produce only appointed amount of product. E.g. dairy farmer would be limited to a certain production of milk a day. If the farmer exceeds his quota, he would pay a fine. (Quotas were paid on a farm size). 2) Set-aside - In 1992 farmers were ordered to leave their 20% of their land fallow, to plant ...

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