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European Sugar Policy Reform and Agricultural Innovation

Author

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  • Koen Dillen
  • Matty Demont
  • Eric Tollens

Abstract

"In July 2006, the European Union's (EU) Common Market Organization (CMO) for sugar underwent the first radical reform since its establishment in 1968. In this article, we study the incentives for adoption of new technologies before and after the policy reform. We build a stochastic partial equilibrium model and use it to analyze the effect of the policy reform on the adoption incentives of genetically modified herbicide tolerant sugar beet. Our findings show that the adoption incentives of high-cost sugar beet farmers are significantly reduced under the new CMO. Medium-cost producers, in contrast, have greater incentives to adopt new technologies, while low-cost producers are largely left unaffected. The reduced adoption incentives of high-cost farmers lead to lower flexibility and competitiveness of these farmers and therefore coincides with the goals of the reform to crowd out high-cost producers and increase competitiveness of the European sugar market." Copyright (c) 2008 Canadian Agricultural Economics Society.

Suggested Citation

  • Koen Dillen & Matty Demont & Eric Tollens, 2008. "European Sugar Policy Reform and Agricultural Innovation," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 533-553, December.
  • Handle: RePEc:bla:canjag:v:56:y:2008:i:4:p:533-553
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    References listed on IDEAS

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    1. Cheryl S. DeVuyst & Cheryl J. Wachenheim, 2005. "American Crystal Sugar: Genetically Enhanced Sugarbeets? ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(1), pages 105-116.
    2. Jeroen Buysse & Bruno Fernagut & Olivier Harmignie & Bruno Henry de Frahan & Ludwig Lauwers & Philippe Polomé & Guido Van Huylenbroeck & Jef Van Meensel, 2007. "Farm-based modelling of the EU sugar reform: impact on Belgian sugar beet suppliers," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(1), pages 21-52, March.
    3. Devadoss, Stephen & Kropf, Jurgen, 1996. "Impacts of trade liberalizations under the Uruguay round on the world sugar market," Agricultural Economics, Blackwell, vol. 15(2), pages 83-96, November.
    4. Giancarlo Moschini & Harvey Lapan, 1997. "Intellectual Property Rights and the Welfare Effects of Agricultural R&D," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1229-1242.
    5. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
    6. George C. Davis & Maria Cristina Espinoza, 1998. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 868-879.
    7. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics, Blackwell, vol. 22(3), pages 233-245, April.
    8. Dillen, Koen & Demont, Matty & Tollens, Eric, 2008. "Modelling heterogeneity to estimate the ex ante value of biotechnology innovations," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43945, European Association of Agricultural Economists.
    9. William Griffiths & Xueyan Zhao, 2000. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 236-240.
    10. Andrei Sobolevsky & GianCarlo Moschini & Harvey Lapan, 2005. "Genetically Modified Crops and Product Differentiation: Trade and Welfare Effects in the Soybean Complex," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 621-644.
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    12. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary M., 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 22(3), April.
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    16. Devadoss, Stephen & Kropf, Jurgen, 1996. "Impacts of trade liberalizations under the Uruguay Round on the world sugar market," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 15(2), November.
    17. Matty Demont & Marie Cerovska & Wim Daems & Koen Dillen & József Fogarasi & Erik Mathijs & Frantisek Muska & Josef Soukup & Eric Tollens, 2008. ""Ex Ante" Impact Assessment under Imperfect Information: Biotechnology in New Member States of the EU," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(3), pages 463-486, September.
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    Cited by:

    1. Andrew Schmitz & Troy G. Schmitz & Paul Schure, 2008. "High Commodity Prices and the EU's Single Payment Scheme: Some Consequences of Double-Dipping," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 523-531, December.
    2. Dillen, Koen & Tollens, Eric & Wesseler, Justus, 2010. "The Barroso Proposal Of Nationalizing Gmapproval: A Look At Ht Sugar Beets Under Changed European Sugar Policy," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188086, International Consortium on Applied Bioeconomy Research (ICABR).
    3. Svatoš, M. & Maitah, Mansoor & Belova, Anna, 2013. "World Sugar Market – Basic Development Trends and Tendencies," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 0(Number 2), pages 1-16, June.
    4. Tillie, Pascal & Dillen, Koen & Rodríguez-Cerezo, Emilio, 2014. "Modelling ex-ante the economic and environmental impacts of Genetically Modified Herbicide Tolerant maize cultivation in Europe," Agricultural Systems, Elsevier, vol. 127(C), pages 150-160.
    5. Hosseini, S.S. & Hassanpour, E. & Sadeghian, S.Y., 2009. "An economic evaluation of Iranian public agricultural R&D policy: The case of sugarbeet," Research Policy, Elsevier, vol. 38(9), pages 1446-1452, November.

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