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Agriculture continues to maintain a very high profile in the Community, notwithstanding calls that the sector should occupy a place commensurate with its overall contribution to the economy. Such calls grew yet stronger during the United Kingdom Presidency from July to December 2005. Indeed, shortly before the United Kingdom assumed the Presidency, Tony Blair stated that [i]t simply does not make sense, in this new world, for Europe to spend over 40 per cent of its budget on the common agricultural policy, representing 5 per cent. of the EU population producing less than 2 percent. of Europe's output.'1 In similar vein, there has been trenchant criticism of the extent to which agriculture has dominated the Doha Development Round negotiations under the auspices of the World Trade Organization ('WTO'). For example, Commissioner Mandelson has expressed 'a real fear that a continuing overnegotiation and overbidding in agriculture will stymite the progress we urgently need to demonstrate across the range of the talks'.2

AbstractEuropean farm policy has undergone radical change in recent years, culminating in the Agenda 2000 reforms to the Common Agricultural Policy agreed in 1999 and then their Mid-Term Review in 2003. In particular, subsidy payments have been substantially 'decoupled' from production and switched decisively towards providing income support for farmers under a new 'single farm payment' scheme. These reforms have been predicated upon the need to win acceptance for Community farm subsidies in the Doha Round of WTO negotiations. This article examines the new law of the Common Agricultural Policy against the background of the domestic support reduction commitments contained in the 1994 Uruguay Round Agreement on Agriculture. It questions the extent to which the single farm payment scheme fulfils the requirements for 'green box' exemption from such commitments. Options for the re-negotiation of the Agreement on Agriculture are discussed, including measures to improve the justiciability of its terms and to exclude discriminatory and trade-distorting domestic support. The article also considers the implications of the recent WTO Appellate Body Decisions inUnited States—Subsidies on Upland Cotton and European Communities-Export Subsidies on Sugar. It concludes that the Community will have difficulty gaining acceptance for its reforms among WTO Members. Whatever the legitimacy of its subsidy regime within the framework of the current Agreement on Agriculture, the emergence of a strong negotiating position among developing countries, posited on opposition to the volume of farm support maintained by the Community and United States, may present even greater obstacles to the conclusion of a new Agreement on Agriculture in the Doha Round.