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The impact of the CAP reform and exchange rates on Slovak agriculture

Author

Listed:
  • P. Ciaian

    (Slovak Agricultural University in Nitra)

  • J. Pokrivčák

    (Slovak Agricultural University in Nitra)

  • L. Bartová

    (Slovak Agricultural University in Nitra)

  • D. Drabik

    (Slovak Agricultural University in Nitra)

Abstract

This paper uses a dynamic, partial equilibrium econometric model to analyze the impact of the 2003 CAP reform and changes of exchange rate on agricultural markets and agricultural incomes in Slovakia. We evaluate three scenarios: (1) baseline scenario with no change in agricultural policies (Single Area Payment Scheme and top-ups are assumed until 2015), (2) CAP reform scenario with full decoupling from 2007 and with modulation from 2013, and (3) exchange rate scenario. In the baseline scenario, production increases. Consumption increases with some exceptions (like pork). Agricultural income rises significantly in the baseline scenario. The full decoupling has a minor impact on agricultural markets relative to the baseline. Weak Euro would lead to higher prices and higher production but lower consumption. Change in the exchange rate causes substitution in consumption of certain commodities due to the relative price changes.

Suggested Citation

  • P. Ciaian & J. Pokrivčák & L. Bartová & D. Drabik, 2007. "The impact of the CAP reform and exchange rates on Slovak agriculture," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 53(3), pages 111-122.
    • Handle: RePEc:caa:jnlage:v:53:y:2007:i:3:id:456-agricecon
    DOI: 10.17221/456-AGRICECON
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    References listed on IDEAS

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    1. Ciaian, Pavel & Swinnen, Johan F.M., 2006. "AJAE Appendix: Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 88(4), pages 1-10, November.
    2. Banse, Martin & Münch, Wolfgang & Tangermann, Stefan, 2000. "Eastern Enlargement of the European Union: General and Partial Equilibrium Analysis," 2000 Conference, August 13-18, 2000, Berlin, Germany 197223, International Association of Agricultural Economists.
    3. Hertel, Thomas W & Brockmeier, Martina & Swaminathan, Padma V, 1997. "Sectoral and Economy-Wide Analysis of Integrating Central and Eastern Europe Countries into the EU: Implications of Alternative Strategies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 24(3-4), pages 359-386.
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