Accommodating CAP to New Trade and Budget Context

This chapter explains the reforms CAP underwent during the 1990s. The first part of the chapter is focused on the 1992 ‘MacSharry’ reform, which reduced price and production supports in the main commodity groups and introduced ‘compensatory’ payments to farmers. Particular attention is paid to the Uruguay Round Agreement on Agriculture of 1994, which introduced a new world trade regime in agriculture. The second part of the chapter is focused on the 1999 ‘Agenda 2000’ reform, which further replaced price supports with compensatory payments. Apart from the need to accommodate further the ongoing changes in the world trade context/regime, Agenda 2000 coincided with the planned Eastern enlargement and the negotiations on the new multiyear Community budget for the period 2000–2006.