ABSTRACT
This chapter provides the stylized policy mechanisms of the Common Agricultural Policy (CAP) and evaluates the agricultural situation and policies in the Central and Eastern European countries (CEECs). It examines a political economy model of agricultural support prices in the European Union (EU). The chapter also evaluates the alleged 'restaurant table' effect and determines the conditions under which EU CAP prices would be higher or lower than otherwise would have been the case. Many of the CEECs have voiced their desire to join the EU and the EU has decided that the countries shall become members of the EU in the future. Some of the CEECs avoid the accumulation of surpluses caused by high guaranteed prices by supply control. If the supranational character of the CAP is the cause of high agricultural protection in the EU, the inclusion of the CEECs would increase the overall protection to European agriculture.
