Abstract
Abstract The paper discusses the decisions on the reform of the CAP from June 2003. The decisions focus on the decoupling of the direct payments to farmers from production. This will reduce production incentives and thereby improve the allocation of resources. However, payments to farmers will hardly be reduced in total but rather partly be redirected towards rural development policies, environmental policies and animal health measures. Since a consistent rationale for permanent payments to farmers is missing, payments should be stopped completely. The increase of financial support for rural development is the wrong way, since most measures, again, are interventions in favour of farmers. The latest WTO-Agreement on the continuation of the Doha-Round will put additional reform pressure on the EU.
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