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Analysis of the Impact on UK Sugar Production Efficiency of Reforming the EU Sugar Regime

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Author Info

  • Alan W. Renwick

    (Land Economy Research Group, Scottish Agricultural College, UK)

  • Cesar L. Revoredo Giha

    ()
    (Department of Land Economy, University of Cambridge)

Abstract

The purpose of the paper is examining the potential implications for the UK sugar beet sector of the EU sugar regime reform. Although the reform has yet to be formalised, the initial proposals centre on price and quota cuts. Using panel data from the Farm Business Survey for England, the paper estimates two cost functions: one for the sugar enterprise and another for the cropping part of the farm (i.e., excludes any livestock enterprise) and use them to analyse the impacts on profitability and costs of three possible reform scenarios: a 25 per cent cut in UK quota, a 25 per cent cut in price, a 40 per cent cut in price. The results show that the largest gains in terms of economic efficiency would be achieved under the 40 per cent price cut; however, the models suggest that this would also lead to the greatest reduction in production if the fixed costs of producing sugar were not adjusted.

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Bibliographic Info

Paper provided by University of Cambridge, Department of Land Economics in its series Environmental Economy and Policy Research Working Papers with number 07.2005.

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Date of creation: 2005
Date of revision: 2005
Handle: RePEc:lnd:wpaper:200507

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Related research

Keywords: EU sugar reform; UK agriculture; UK sugar beet production; Multi-output cost function.;

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