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Efficiency of Alternative Policies for the EC's Common Agricultural Policy

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  • Harry de Gorter
  • Karl D. Meilke

Abstract

The Common Agricultural Policy (CAP) of the European Community (EC) is facing a crisis from budgetary and political pressures. This study analyzes the relative efficiency of four policy options discussed at the recent emergency summit in Brussels including a price reduction, coresponsibility levies, production controls, and a two-price plan. These are assessed in terms of their efficiency in achieving producer welfare. A two-price plan is superior to a production quota only at lower producer income goals. A price reduction policy is more efficacious than a coresponsibility levy, but both are shown to be inferior to either quotas or a two-price plan.

Suggested Citation

  • Harry de Gorter & Karl D. Meilke, 1989. "Efficiency of Alternative Policies for the EC's Common Agricultural Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 592-603.
    • Handle: RePEc:oup:ajagec:v:71:y:1989:i:3:p:592-603.
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    File URL: http://hdl.handle.net/10.2307/1242015
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    Cited by:

    1. Jerzy Michalek & Pavel Ciaian & d’Artis Kancs, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union," Land Economics, University of Wisconsin Press, vol. 90(2), pages 260-289.
    2. Carl GAIGNÉ & Cathie LAROCHE DUPRAZ & Alan MATTHEWS, 2015. "Thirty years of European research on international trade in food and agricultural products," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(1), pages 91-130.
    3. Ciaian, Pavel & Pokrivcak, Jan and Katarina Szegenyova, 2012. "Do agricultural subsidies crowd out or stimulate rural credit market institutions? The case of EU Common Agricultural Policy," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 16, November.
    4. Bouamra-Mechemache, Zohra & Chavas, Jean-Paul & Cox, Thomas L. & Requillart, Vincent, 2001. "Interregional Analysis Of The Impacts Of Eliminating European Union Milk Production Quotas," 2001 Annual meeting, August 5-8, Chicago, IL 20677, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Hofreither, Markus F., 2007. "The "Treaties of Rome" and the development of the Common Agricultural Policy," Discussion Papers DP-23-2007, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    6. Pavel Ciaian & D'Artis Kancs & Johan Swinnen, 2014. "The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(4), pages 643-673.
    7. Pavel Ciaian & d'Artis Kancs & Sergio Gomez y Paloma, 2010. "Distributional Effects of CAP Subsidies: Micro Evidence from the EU," EERI Research Paper Series EERI_RP_2010_05, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Baldoni, Edoardo & Ciaian, Pavel, 2023. "The capitalization of CAP subsidies into land prices in the EU," Land Use Policy, Elsevier, vol. 134(C).
    9. Streicher, Gerhard & Schmid, Erwin & Salhofer, Klaus, 2006. "Testing for the Efficiency of a Policy Intended to Meet Objectives: General Model and Application," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(2), pages 1-22, August.
    10. Alexandre Gohin & Patrice Gautier, 2008. "The phasing out of EU agricultural export subsidies : impacts of TWO management schemes," Working Papers hal-01931642, HAL.
    11. Ciaian, Pavel & Pokrivcak, Jan & Szegenyova, Katarina, 2011. "Do Agricultural Subsidies Crowd-out or Stimulate Rural Credit Market Institutions?: The Case of CAP Payments," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114289, European Association of Agricultural Economists.
    12. James, Jennifer S. & Alston, Julian M., 2002. "Seeds of Progress? French Wheat Production, Quality, and Policy," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125114, Australian Agricultural and Resource Economics Society.
    13. Pavel Ciaian & Johan F.M. Swinnen, 2007. "Credit Market Imperfections and the Distribution of Policy Rents: The Common Agricultural Policy in the New EU Member States," LICOS Discussion Papers 18307, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

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