ABSTRACT
Industrial country agricultural policy in the post-World War II era has been highly protectionist, commodity based, market distorting and dominated by domestic politics. The agricultural sector has therefore lagged behind in the general trend of deregulation and market liberalization that has permeated most sectors of the economy. The problems this has created have spilled over into the international arena. Subsidies have been paid to farmers largely on the basis of production and financed by consumers, leading to the build-up of embarrassing surpluses, the disposal of which has proved increasingly disruptive to the international market for agricultural goods. The United States and the European Community (EC) can share much of the blame for the export of the surplus capacity, though major importing countries such as Japan have kept many of their markets closed and smaller countries have also maintained high support levels for many crops. 1 By the mid 1980s, the costs of agricultural policy in many countries had grown to unacceptable levels, and the disruption of agricultural markets had created international conflict.
