ABSTRACT
Agriculture is a controversial policy area for the European Union and Norway because it is concerned with food supply and is heavily regulated. The Common Agricultural Policy (CAP) is governed by Article 39 of the Treaty of Rome which states that ‘there should be a rational development of production and the optimum utilisation of the factors of production, in particular, of labour’. In Norway farm prices are higher than those in the European Union. Despite the harsh climate, especially in the regions close to the Arctic Circle, Norway is self-sufficient in certain agricultural products due to the protectionism and high prices encouraging production. Norway is also sensitive to the issue of maintaining its arctic agriculture because of its importance for employment within its remote Northern communities. The problem that Norway faces is not only to reduce prices to levels comparable to CAP norms but also to meet the even stricter requirements of the General Agreement on Tariffs and Trade (GATT) (Barnes 1996:215).
