Abstract
The 1991 reform of the EC Common Agricultural Policy was designed to be acceptable to a successful GATT agreement with EC bureaucrats having an understanding of the GATT objectives, with the start of the recent GATT round beginning in 1986. Hence, the objective of both pieces of legislation is similar - to encourage free trade by reducing support of product prices through removing import quotas, export subsidies etc. As a consequence CAP has transferred open ended support for product price to a support of limited numbers of production units through cow and sheep quotas. It is therefore expected that product prices will fall closer to world market prices, particularly for products in surplus in the EC such as beef. Precise market specifications will therefore impinge directly on producers in terms of price and encourage the development of specific production systems to meet these specific markets, eg ultra light Mediterranean market.
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