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CAP Reform and the WTO: Potential Impacts on EU Agriculture

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  • Binfield, Julian C.R.
  • Donnellan, Trevor
  • Hanrahan, Kevin F.
  • Hart, Chad E.
  • Westhoff, Patrick C.

Abstract

In 2003 an agreement was finalized to instigate arguably the most significant reform of the European Union's (EU) Common Agricultural Policy (CAP) since its inception. In the Luxembourg Agreement many of the direct payments that have been linked to production are decoupled and instead provided in the form of a land-based payment. The reforms did not include any significant changes to either EU border support or the ability of the EU to utilize export subsidies that have been widely criticized by other nations. Even though the reforms do not directly address trade in agricultural products it is argued that World Trade Organization (WTO) concerns played a significant role in the designs of the reforms. In this paper an analysis of the Luxembourg reforms and the European proposal for agriculture under the WTO is presented. The results are used as the basis for a discussion of the interaction of the WTO and CAP reform and the implications for the agricultural sector in the EU.

Suggested Citation

  • Binfield, Julian C.R. & Donnellan, Trevor & Hanrahan, Kevin F. & Hart, Chad E. & Westhoff, Patrick C., 2004. "CAP Reform and the WTO: Potential Impacts on EU Agriculture," 2004 Annual meeting, August 1-4, Denver, CO 20020, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20020
    DOI: 10.22004/ag.econ.20020
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    References listed on IDEAS

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    1. David A. Hennessy, 1998. "The Production Effects of Agricultural Income Support Policies under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 46-57.
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    1. Balkhausen, Oliver & Banse, Martin & Grethe, Harald & Nolte, Stephan, 2005. "Modellierung der Auswirkungen einer Entkopplung der Direktzahlungen in der EU auf die Flächenallokation und Wiederkäuerproduktion: Eine Analyse unterschiedlicher Modellergebnisse," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(08), pages 1-15.
    2. Oliver Balkhausen & Martin Banse & Harald Grethe, 2008. "Modelling CAP Decoupling in the EU: A Comparison of Selected Simulation Models and Results," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 57-71, February.
    3. Catherine C. Benjamin & Magalie Houée Bigot & Isabelle Piot-Lepetit, 2005. "Accession of the East-European countries to the European Union and the impacts on arable world and European markets : a WEMAC analysis [L'adhésion des nouveaux membres et les impacts sur les marché," Post-Print hal-02832416, HAL.
    4. James Rude, 2008. "Production Effects of the European Union's Single Farm Payment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 457-471, December.
    5. Halmai, Peter & Elekes, Andrea, 2005. "CAP Reform in the Light of the WTO Doha Round Negotiations," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24693, European Association of Agricultural Economists.
    6. Gracia, Azucena & de Magistris, Tiziana & Casado, Jose Maria, 2008. "The Effect Of The New Single Farm Payment In Irrigated Agriculture: The Case Of Spain," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6590, European Association of Agricultural Economists.
    7. Gelan, Ayele & Schwarz, Gerald, 2011. "Estimating the effects of single farm payments on multi-output agricultural production function," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(2).
    8. Frédéric Courleux & Hervé Guyomard & Fabrice Levert & Laurent Piet, 2008. "How the EU Single Farm Payment should be modelled: lump-sum transfers, area payments or… what else?," Working Papers SMART 08-01, INRAE UMR SMART.
    9. Rude, James, 2007. "Production Effects of the European Union’s Single Farm Payment," Working Papers 7335, Canadian Agricultural Trade Policy Research Network.
    10. Binfield, Julian C.R. & Donnellan, Trevor & Hanrahan, Kevin F. & Westhoff, Patrick C., 2009. "WTO Doha Round: Impact of an Agreement on Agriculture and the Importance of Sensitive Products," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 50936, Agricultural Economics Society.
    11. Gelan, Ayele & Schwarz, Gerald, 2006. "A Policy Impact Evaluation Model For Scotland: Decoupling Single Farm Payments," MPRA Paper 1491, University Library of Munich, Germany.
    12. Acs, Szvetlana & Armsworth, Paul R & Dallimer, Martin & Gaston, Kevin J & Hanley, Nicholas & Robertson, Philip & Wilson, Paul, 2008. "The effect of decoupling on marginal agricultural systems: implications for farm incomes, land use and upland ecology," Stirling Economics Discussion Papers 2008-18, University of Stirling, Division of Economics.
    13. Sahrbacher, Christoph, 2011. "Regional structural change in European agriculture: Effects of decoupling and EU accession," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 60, number 60.
    14. Frédéric Courleux & Herve Guyomard & Fabrice Levert & Laurent Piet & . Inra & . Société Française d'Economie Rurale, 2007. "How the EU single farm payment should be modelled: lump-sum transfers, area payments or… something else ?," Post-Print hal-02282245, HAL.
    15. Balkhausen, O. & Banse, M. & Grethe, H., 2006. "Modellierung der Auswirkungen einer Entkopplung der Direktzahlungen in der EU - Modellansätze, Ergebnisse und Ausblick," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 41, March.
    16. Tranter, R.B. & Swinbank, A. & Wooldridge, M.J. & Costa, L. & Knapp, T. & Little, G.P.J. & Sottomayor, M.L., 2007. "Implications for food production, land use and rural development of the European Union's Single Farm Payment: Indications from a survey of farmers' intentions in Germany, Portugal and the UK," Food Policy, Elsevier, vol. 32(5-6), pages 656-671.

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