This study, which covers the period from 1986 to 1995, describes the pre-reform situation in Latvia and the transition to a more market-oriented agro-food sector. It provides extensive background data, as well as detailed calculations of the level of assistance to the main agricultural commodities as measured by Producer and Consumer Subsidy Equivalents. The study concludes that having completed the primary process of privatisation and transformation of the agro-food sector, further restructuring towards more efficient agricultural structures is needed with a neutral policy towards the different forms and types of farms and structures. The report recommends that Latvia promote competition to reduce inefficiencies in the food chain and cautions against adopting market distorting agricultural policy measures.