Advanced Search
MyIDEAS: Login

Decoupled Payments to EU Farmers, Production, and Trade: An Economic Analysis for Germany

Contents:

Author Info

  • von Witzke, Harald
  • Noleppa, Steffen
  • Schwarz, Gerald
Registered author(s):

    Abstract

    After an extended process of reform the European Union has introduced direct payments to farmers which are decoupled from production decisions as a central element of its Common Agricultural Policy. They are also referred to as Single Farm Payments. In this paper we analyze the production and trade effects of this policy and its compatibility with WTO international trade rules. A survey of the literature suggests that the system of direct payments in its present form has effects which are analogous to a subsidization of agricultural land. Thus, they act to increase production and trade. Furthermore we quantify the total economic cost of production of selected commodities in the European Union and compare them to the price at which EU production is sold in foreign markets. Our analysis suggests that the costs of production in the European Union for key agricultural commodities are below international prices. It can be established that commodities for which the European Union is a net exporter are sold below cost, for extended periods of time and in substantial quantities. The EU system of decoupled payments to farmers, thus, acts to inflict economic injury to third countries. Under WTO rules, dumping can only occur when a country is an exporter. In this paper we demonstrate that on the markets included in the analysis dumping occurs on the market for wheat. The extent of injury is exemplified for Australia.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://purl.umn.edu/59853
    Download Restriction: no

    Bibliographic Info

    Paper provided by Humboldt University Berlin, Department Agricultural Economics in its series Working Paper Series with number 59853.

    as in new window
    Length:
    Date of creation: Mar 2010
    Date of revision:
    Handle: RePEc:ags:huiawp:59853

    Contact details of provider:
    Postal: Philippstr. 13, 10115 Berlin
    Phone: +49 (0)30 2093 6305
    Fax: +49 (0)30 2093 6497
    Web page: http://www.agrar.hu-berlin.de/fakultaet/departments/daoe
    More information through EDIRC

    Related research

    Keywords: European Union; Common Agricultural Policy; WTO rules; decoupled payments; Agribusiness; Agricultural and Food Policy; Food Security and Poverty; International Development; International Relations/Trade; Risk and Uncertainty;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Maurice J. Roche, 2004. "Riskier product portfolio under decoupled payments," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(2), pages 111-123, June.
    2. Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovacik, Karen & Matthey, Holger & Saak, Alexander E. & Tokgoz, Simla & Chavez, Eddie C. , 2004. "FAPRI 2004 U.S. and World Agricultural Outlook," Staff Reports 32046, Food and Agricultural Policy Research Institute (FAPRI).
    3. Ahearn, Mary Clare & Collender, Robert N. & Diao, Xinshen & Harrington, David H. & Hoppe, Robert A. & Korb, Penelope J. & Makki, Shiva S. & Morehart, Mitchell J. & Roberts, Michael J. & Roe, Terry L. , 2004. "Decoupled Payments In A Changing Policy Setting," Agricultural Economics Reports 33981, United States Department of Agriculture, Economic Research Service.
    4. Roche, M. & McQuinn, K., 2003. "Efficient allocation of land in a decoupled world," Economics, Finance and Accounting Department Working Paper Series n1190103, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ags:huiawp:59853. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.