Emerging Price Support Systems in Central European Agriculture: Examples from Hungary and Lithuania

The conventional wisdom on agricultural trade policy has been that trade barriers are primarily determined by domestic agricultural and food price policies. For example, European Union (EU) import levies and export subsidies were determined by intervention and threshold prices, and U.S. sugar import quotas were driven by the domestic price support level. This is why agricultural trade barriers escaped General Agreement on Tariffs and Trade (GATT) jurisdiction for so long and why even the modest liberalization of the Uruguay Round Agreement with respect to agricultural products was so difficult to achieve. Liberalization of agricultural trade in many countries required changes in the level and/or the mechanism of domestic support programs.