Agricultural production in the European Union (EU) has increased dramatically since the early 1950’, but at a considerable environmental cost. Artificially high commodity prices maintained through the Common Agricultural Policy (CAP) have encouraged heavy investment in improved technologies and reinforced intensive use of such agricultural inputs as fertilizers and pesticides. Environmental degradation has included nitrate pollution of drinking water and loss of wildlife species. However, major reform of the CAP in May 1992 included direct payments to farmers, increased measures to limit production, and programs specifically designed to produce environmental benefits. Input use in U.S. agriculture is only a fraction of that in Europe and arable land area much more extensive. In the future, American farmers will face less severe tradeoffs between productivity and environmental preservation than their EU counterparts.