Agriculture in many industrialized countries is heavily subsidized.1 The Common Agricultural Policy (CAP) of the European Union provides subsidies in a variety of ways. They include agricultural producer price support (by means of import restrictions, export subsidies, domestic production...

The Common Agricultural Policy (CAP)of the European Union has been in a process ofreform for quite some time. As a result of reforms,agricultural market regulations have become moreliberal and direct payments which are to a largeextent decoupled from production have beenintroduced. In this...