The reform of the Common Agricultural Policy (CAP) which is now being implemented, reduces the support for a selected number of agricultural products. This book uses welfare theory and applied general equilibrium analysis to assess the medium to long term consequences of this reform, if the new policies remain in place until the beginning of the next century. It analyses the implications of two alternative scenarios: a) a further trade liberalisation covering all commodities; and b) increased protectionism with high prices, constraints on production and export subsidies (financed by the farmers themselves). The study also investigates the implications of financial renationalisation, whereby the European Union member-states would cover the costs of their own support measures.

Chapter Headings. Introduction. Scope of the study. Structure of the book. Limitations of the study. Project organisation and acknowledgements. The CAP: Its History, Operation and Proposals for its Reform. Welfare Analysis of CAP Reform: A Stylized Model. ECAM: An Agricultural Model of the EU-9. Annex 4A. Model Validation. Annex 4B. Data and Parameters of ECAM: An Overview. CAP Reform in the Bureaucratic Perspective: The MacSharry Reform and the GATT Agreement. Alternatives: Free Trade or Intervention? EU Agriculture in the Long Term: A Future as an Exporter? Summary and Conclusions. References. Index.