This paper outlines in very broad terms the current situation in the cereals market. The picture is one of a combination of high institutional prices and improved technology increasing industry output faster than it can be absorbed by Community markets. The result is increasing volume of exports onto world cereal markets and the possibility of rapidly escalating stocks. The budgetary implications of this are not politically viable and so changes in policy have been introduced and will continue to have effect. Other measures are being considered and the merits and demerits of these are briefly considered.