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Economic Impacts of Adopting the Common Agricultural Policy of the European Union: A CGE Approach to the Case of Romania

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  • Scrieciu, S. Serban

    () (The University of Cambridge)

Abstract

This paper evaluates potential economic impacts of incorporating Romania into EU’s Common Agricultural Policy. A CGE model of Romania is employed to model likely changes in trade, production and welfare patterns with a focus on fifteen local agro-food activities. Three main findings emerge. First, the adoption of the CAP expands agro-food output and trade, promotes higher farm incomes, and increases economic welfare. Second, CAP application results in production specialisation effects, particularly for sugar and sugar beet, bovine meat products, ruminant live animals, dairies, and cereal grains. Third, the identified impacts are driven by changes in trade-related measures, particularly enhanced access to EU markets, and less by alterations in production-related domestic support. The paper concludes that EU accession and CAP adoption may bring potentially realisable growth in Romania’s agro-food sector, though in practice this will depend on producers’ ability to respond to the supply incentives being offered.

Suggested Citation

  • Scrieciu, S. Serban, 2007. "Economic Impacts of Adopting the Common Agricultural Policy of the European Union: A CGE Approach to the Case of Romania," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 407-438.
  • Handle: RePEc:ris:integr:0401
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    Cited by:

    1. Troy G. Schmitz & Christopher R. Giese & Clifford J. Shultz II, 2008. "Welfare Implications of EU Enlargement under the CAP," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 555-562, December.

    More about this item

    Keywords

    EU Eastern enlargement; Common Agricultural Policy; CGE model; Romania;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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