International Agriculture and Trade Outlook No. (WRS-0407) 13 pp

August 2004

CAP Reform of 2003-04

The European Union continued to reform its Common Agricultural Policy (CAP) in 2003-04, building on the reforms of 1992 and 1999. The centerpiece of the latest reforms is the introduction of a single farm payment (SFP), which is paid to EU farmers based on historical payments unrelated to current production decisions. These recent reforms allow the EU to assume an aggressive position in World Trade Organization (WTO) negotiations on agriculture, while allowing farmers to make production decisions based more on market signals than on EU policy interventions.

Keywords: European Union, agriculture reform, common agricultural policy, CAP, decoupled payments, farm payments, multilateral negotiations, World Trade, Organization, WTO, trade, farm income

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Last updated: Wednesday, August 25, 2004

For more information contact: David Kelch and Mary Anne Normile