From Central Planning to the Common Agricultural Policy: Analysis and Political Economy Aspects of Agricultural Policy in Central and Eastern Europe

This chapter explains a political economy framework, focusing on the distributional consequences of trade policy and providing guidance in the direction of agricultural policy developments, given the structure of the economy and the existence of constraints to protection. Agricultural price and trade policy in Central and Eastern European countries (CEECs) have undergone dramatic changes since the economic and political liberalization that began in 1989. Alignment of both the instruments of agricultural policy and the level of their application is a concern. The producer support estimates, as calculated by the Organisation for Economic Co-operation and Development, is the annual farmgate value of gross transfers made to agricultural producers from both implicit and explicit policy measures. In order to understand how CEEC policy has developed, and is likely to develop in the future when the concern is towards alignment, it is important to understand what elements are significant in determining the direction and form of agricultural policy.