The Common Agricultural Policy (CAP) of the European Union has been in a process of reform since the early 1990s. As a result of reforms, agricultural market regulations have become more liberal and direct payments have been introduced which are to a large extent decoupled from production. In...

After an extended process of reform the European Union has introduced direct payments tofarmers which are decoupled from production decisions as a central element of its CommonAgricultural Policy. They are also referred to as Single Farm Payments. In this paper weanalyze the production and trade...

This paper has benefited greatly from a discussion of an earlier version with the participantsof the first Humboldt Forum for Food and Agriculture in Davos, Switzerland in March 2009.Research has been made possible in part by a research grant from BASF SE – The ChemicalCompany. The first two...