The agricultural support policies of major industrial countries have resulted in large imbalances and excess production. These policies have reduced market access for efficient agricultural exporters, many of which are developing countries, and the disposal of surplus production on world markets has had a depressing effect on world food prices. Between 1980 and 1987 the Fund’s food commodities price index has fallen by one third in nominal terms and is almost half the 1980 level in real terms. Agricultural trade policies have led to an escalation of friction in the international trade of agricultural products during the 1980s, imposed a high cost on taxpayers and consumers in industrial countries, and adversely affected their macroeconomic performance. These factors underlie the prominence given to agricultural trade policy reform in the OECD and in the Uruguay Round negotiations.