Modelling The Cap Arable Crop Regime Under Uncertainty
In this paper we evaluate empirically the absolute and relative size of risk-related effects of a farm policy change, with specific reference to the CAP arable crop regime. We adopt a dual framework under non linear mean-variance risk preferences, which incorporates the impact of price uncertainty in the specific decision-making structure of EU arable crop producers. A system of output supply, input demand and land allocation equations has been estimated on a sample of Italian specialised arable crop farms, which allows us to derive elasticities with respect to all the relevant exogenous variables, including those related to risk. The simulation of the impact of an Agenda 2000-type of shock confirms that the size of risk effects is important in evaluating farmer's output responses. This may have important implications for the revision of "green box" criteria in the context of the current WTO negotiations. Keywords: Risk effects; Common Agricultural Policy; Decoupling; Duality.
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- David A. Hennessy, 1998.
"The Production Effects of Agricultural Income Support Policies under Uncertainty,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 80(1), pages 46-57.
- Hennessy, David A., 1998. "The Production Effects of Agricultural Income Support Policies Under Uncertainty," Staff General Research Papers Archive 1207, Iowa State University, Department of Economics.
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- Barry T. Coyle, 1999. "Risk Aversion and Yield Uncertainty in Duality Models of Production: A Mean-Variance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 553-567.
- Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
- Guyomard, Herve & Baudry, Marc & Carpentier, Alain, 1996. "Estimating Crop Supply Response in the Presence of Farm Programmes: Application to the CAP," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(4), pages 401-420.
- Elie Appelbaum & Aman Ullah, 1997. "Estimation Of Moments And Production Decisions Under Uncertainty," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 631-637, November.
- Elie Appelbaum & Aman Ullah, 1996. "Estimation of moments and production decisions under uncertainty," Working Papers 1996_9, York University, Department of Economics.
- Lansink, Alfons Oude & Peerlings, Jack, 1996. "Modelling the New EU Cereals and Oilseeds Regime in the Netherlands," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(2), pages 161-178. Full references (including those not matched with items on IDEAS)
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