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To wit: the first pillar deals with market price support (buying up and storing quantities of products when they fall below a given price); export subsidies, and direct payments to farmers which replace market price support following the reforms of 2000 and 2003. The first pillar constitutes the bulk of the CAP and direct payments constitute the bulk of the first pillar. The first pillar falls under the exclusive competence of the EU and payments under it are mandatory, i.e. the parliament does not get to decide upon them, the EU alone deals out the payments (there is no national co-financing) and even if a budget is not agreed upon they will continue.
The second pillar is a shared competence in the sense that it has co-financing (Member States pay a given percentage themselves, higher if the region where the aid is given out is less poor) and can be decided upon by the European Parliament. Unfortunately it's not very large and was reduced a bit in the negotiations over the current budgetary framework.
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