opment resulted in rapid adoption of new and improved technologies on farms, relatively heavy investments in non-farm produced inputs, increased production efficiency and a rapid rate of growth in aggregate production capacity which exceeded aggregate demand (Cochrane, 1987).
     There are several shortcomings of these farm programs. First is the failure to understand the structural excess ca­pacity problem confronting commercial agriculture during the period between the end of the Korean War and the in­crease of the demand for agricultural exports at the begin­ning of the 1970s. This problem was largely understood as a temporal one. That led to various weaknesses in the farm programs: for instance, unwillingness to impose strict production controls and the tendency to impose production controls over only the commodity in most serious oversup-ply while permitting the released resources to shift into the production of other commodities. This last weakness was not seriously addressed until the 1980s. Another important shortcoming of the farm programs was the almost complete reliance on acreage controls as a means of controlling sup­ply which induced the substitution of fertilizer, pesticides, machinery and power for land and labor, contributing to the land and water pollution of modern agriculture (Debailleul and Deleage, 2000). In addition, while acreage diversion was also considered as a means to reduce the soil erosion, farmers tended to divert the less productive parts of their land and to intensify the agricultural practices on the most fertile part of their land, often the most vulnerable to the erosion. The farm policy was supposed to protect farmers against sharp declines in agricultural prices and in the same time to contribute to provide consumers with declining prices for food, what was possible due to the improvement in farm productivity. But experience shows that in periods of rapidly increasing farm prices, such as occurred during 1972 to 1975, consumers were not protected against the rise of food prices.

2.2.2 Canada: A bipolar farm policy
In the five decades following WWII, a highly complex set of programs and institutions were implemented as Canadian farm policy. This uncommon situation was due to two rea­sons. First, the federal government as well as provincial gov­ernments have the jurisdiction to intervene in the agricultur­al field, so some provinces, like Quebec, have adopted a set of farm programs in the last few decades. The second major reason was the bipolar structure of Canadian agriculture: an export-oriented western agriculture devoted to grain and oil-seed crops and a domestic-market oriented agriculture in Ontario and Quebec specialized in dairy, poultry and egg production. In these latter systems, supply management and border protection have been implemented as instruments to adjust the supply to the domestic demand. Beginning in the 1930s, marketing boards were implemented in the western provinces; their monopoly on marketing grain outside of the country was considered the best way to assure good prices for farmers. However, during the 1950s and 1970s some other programs were implemented, including a pro­gram to subsidize the transportation of grain from prairies to the central and eastern provinces and the implementation of minimum prices for several crops.
     During the 1990s, the federal government undertook a drastic reform of its farm programs. Because of budgetary

deficits, combined with trade liberalization and free-trade agreements, the legitimacy of such programs was questioned. Due to budgetary constraints, some programs were phased out and the direct support of farm price programs was aban­doned in favor of programs which supported the net average farm income, thereby decoupling farm payments. The sup­ply management programs have been maintained but the future for these programs is still uncertain.

2.2.3 Common Agricultural Policy and the building of a single market
As with North American agriculture, European agriculture was greatly affected by the economic crisis of the 1930s. Af­ter WWII, most Western European countries pursued pro­tectionist policies in order to increase self-sufficiency and re­duce their agricultural trade deficits. As a consequence, food prices were maintained at a high level. Production responses to high food prices differed from country to country. In sev­eral countries, the agricultural sector began to modernize and become more competitive, while in other countries, ag­ricultural structures were still inefficient, leading to greatly different agricultural systems among those countries work­ing to form the European Community.
     The implementation of Common Agricultural Policy (CAP) was supposed to be divided in two periods; the period from 1958 to 1970, the "transitional period," was supposed to experiment with new instruments and the "permanent period" beginning in 1970 was devoted to the achievement of a single agricultural market. Actually, the transition to the permanent phase was completed in 1968.
     The CAP was designed with several different objectives, including increasing agricultural production through the development of technological progress as well the efficient use of factors of production, in particular labor; ensuring equitable standards in living for farm people particularly through an increase of personal income; stabilizing markets; securing the food supply and ensuring reasonable prices for consumers. This domestically oriented farm policy was based on three major principles:
•     A unified market in which there is a free flow of agricul­tural commodities within the EEC;
•     Product preference in the internal market over foreign imports through common customs tariffs; and
•     Financial solidarity through common financing of agri­cultural programs.

Thus, individual nations were supposed to gradually leave their decision-making power in agricultural matters, both at the domestic and international levels, in the hands of the Community. Decisions made in Brussels were to be appli­cable equally to all member states. Today the CAP's main instruments include agricultural price supports, direct pay­ments to farmers, supply controls and border measures. Major reform packages have significantly modified the CAP over the last decade. The first reform, adopted in 1992, began the process of shifting farm support from prices to direct payments. The 1992 reforms reduced support prices and created direct payments based on historical yields and introduced new supply control measures. These reforms af­fected the grain, oilseed, protein crop (field peas and beans), tobacco, beef and sheep meat markets. The second reform,