The Common Agricultural Policy Beyond the Macsharry Reform

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 analyzes the implications of two alternative scenarios: a) a further trade liberalization 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 renationalization, whereby the European Union member-states would cover the costs of their own support measures