The paper describes the evolution of the European Union’s Common Agricultural Policy from the perspective of political economics. This important EU policy is analyzed in the context of political and social mechanisms, policy objectives and instruments, as well as the division of benefits. The paper shows that there are growing differences between individual EU member states in agricultural policy objectives, instruments and the amount of funds available. The author focuses on the latest attempts to reform CAP and highlights the need to reorient the policy to improve the competitiveness of European agriculture and pursue other priorities important for EU citizens.