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Measuring the Effects of Alternative Support Policy Instruments on Beef Supply

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  • Benjamin, Catherine
  • Piot-Lepetit, Isabelle
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    Abstract

    The European Union beef market regulation is largely influenced by the Common Agricultural Policy (CAP). With the 1992 CAP reform, there was a partial shift by the EU from product price support to a more direct form of income support by way of direct payments. For beef there was a move to direct payments on intermediate products which was essentially a direct payment for the possession of various categories of animals and these were linked to a land resource base. The Agenda 2000 reform consists in a further price decrease associated with an increase in direct payments. The objective of this paper is to assess how the behaviour of beef producers is sensitive to changes in production prices and to changes in premiums. The analysis relies on an analytical framework which allows to take into account the dynamic feature of beef production and the subsidies provided by the Common Agricultural Policy. We studys how the beef supply response is modified when various exogenous variables like prices or premiums are changed. The application focuses on the dynamics of beef supply response in the French beef sector.

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    File URL: http://purl.umn.edu/24781
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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24781.

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    Date of creation: 2002
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    Handle: RePEc:ags:eaae02:24781

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    Related research

    Keywords: beef supply; dynamic modelling; expectations; direct payments; Common Agricultural Policy; Agricultural and Food Policy; C61; Q12; Q18;

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    1. Jarvis, Lovell S, 1974. "Cattle as Capital Goods and Ranchers as Portfolio Managers: An Application to the Argentine Cattle Sector," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 489-520, May/June.
    2. Foster, Kenneth A & Burt, Oscar R, 1992. "A Dynamic Model of Investment in the U.S. Beef-Cattle Industry," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(4), pages 419-26, October.
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