Abstract
Moving away from output-related price support towards productionneutral direct income support (‘decoupling’) is the essence of the MacSharry plan for CAP reform. But the actual reform proposals fail to live up to the original grand design. For arable products the proposed direct aids per ha turned out to be far from decoupled. For milk no attempt is made to bring quota levels into line with effective demand. The GATT panel found that the new regime still impairs the oilseed tariff bindings. The conflict could be solved and CAP reform considerably improved if the EC were to reform the direct payments per ha for oilseeds and cereals and move towards genuine decoupling.
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