Impacts of the Luxembourg compromise on world markets for arable crops

The CAP reform (June 2003) in the arable crop sector is marked by implementation of decoupled payments and reductions to direct aid. These changes could affect not only the arable crop markets of the various countries of the European Union, but also world markets, and that in wheat in particular, since the EU is one of the main wheat exporters. To assess impacts on world markets for arable crops (and in particular on world prices), we used a partial equilibrium model developed at INRA, funded by the Ministry for Agriculture, Food, Fisheries and Rural Affairs and by Pluriagri (Trades Union). The consequences of reform on world markets are rather limited