Recent reforms of the European Union’s Common Agricultural Policy
(CAP) have set in motion a process of increased market orientation in the agricultural sector, a process that will be intensified by trade liberalization if an agreement is reached under the World Trade Organization (WTO). It is widely expected that both CAP reforms and a WTO agreement will also lead to a more environmentally friendly European agriculture. It is conceivable, however, that market demand would instead provide renewed incentives for intensive agricultural production. Opening European agriculture to more competition in the world market could increase pressure to slacken regulatory requirements on agriculture. Thus, the question of whether liberalization will hinder or promote environmentally sustainable production methods in agriculture is unresolved. This paper analyses different scenarios of agricultural policy development and examines their consequences for the promotion of environmentally sustainable
agriculture in the EU.