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Multilateral Trade and Agricultural Policy Reforms in Sugar Markets

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  • Elobeid, Amani E.
  • Beghin, John C.

Abstract

We analyze the removal of current market interventions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. We analyze the impact of trade liberalization and the removal of production subsidies and consumption distortions. The removal of trade distortions alone induces a 27 percent price increase by the end of the decade relative to the baseline level for sugar. The removal of all trade and production distortions induces a 48 percent price increase by the end of the outlook period. Aggregate trade expands moderately, but location of production and trade patterns are substantially affected. Protectionist countries of the Organisation for Economic Cooperation and Development (OECD) (the European Union, Japan, and, to a lesser extent, Mexico and the United States) experience an import expansion or export reduction and significant contraction in production in unfettered markets. World beet production decreases by 21 percent by the end of the decade, whereas world cane production increases by 8 percent. Brazil, Australia, Cuba, Indonesia, and Turkey expand production when all distortions are removed. Aggregate world sugar production and use decrease by 2 percent. We discuss the significance of these results in the context of the mounting pressures to reform U.S. and E.U. sugar policies and increase market access in OECD countries.

Suggested Citation

  • Elobeid, Amani E. & Beghin, John C., 2004. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," 2004 Annual meeting, August 1-4, Denver, CO 20045, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea04:20045
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    References listed on IDEAS

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    1. Amani Elobeid & John Beghin, 2006. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 23-48, March.
    2. M. Ataman Aksoy & John C. Beghin, 2005. "Global Agricultural Trade and Developing Countries," World Bank Publications, The World Bank, number 7464.
    3. Dominique van der Mensbrugghe & John C. Beghin & Don Mitchell, 2003. "Modeling Tariff Rate Quotas in a Global Context: The Case of Sugar Markets in OECD Countries," Food and Agricultural Policy Research Institute (FAPRI) Publications 03-wp343, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    4. S¯ren E. Frandsen & Hans G. Jensen & Wusheng Yu & Aage Walter-J¯rgensen, 2003. "Reform of EU sugar policy: price cuts versus quota reductions," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 30(1), pages 1-26, March.
    5. John C. Beghin & Barbara El Osta & Jay R. Cherlow & Samarendu Mohanty, 2003. "The Cost Of The U.S. Sugar Program Revisited," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 106-116, January.
    6. Elobeid, Amani & Beghin, John C., 2005. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (Revised)," Staff General Research Papers Archive 12419, Iowa State University, Department of Economics.
    7. Mitchell, Donald, 2004. "Sugar policies opportunity for change," Policy Research Working Paper Series 3222, The World Bank.
    8. Babcock, Bruce A. & Beghin, John C. & Fuller, Frank H. & Mohanty, Samarendu & Fabiosa, Jacinto F. & Kaus, Phillip J. & Fang, Cheng & Hart, Chad E. & Matthey, Holger & de Cara, Stephane & Kovarik, Kare, 2001. "FAPRI 2001 U.S. and World Agricultural Outlook," Staff Reports 32052, Food and Agricultural Policy Research Institute (FAPRI).
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    Cited by:

    1. David Abler & John C. Beghin & David Blandford & Amani Elobeid, 2006. "U.S. Sugar Policy Options and Their Consequences under NAFTA and Doha," Food and Agricultural Policy Research Institute (FAPRI) Publications 06-wp424, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    2. Surabhi Mittal & Jeffrey J. Reimer, 2008. "Would Indian farmers benefit from liberalization of world cotton and sugar markets?," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 301-312, May.
    3. Fabiosa, Jacinto F. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Tokgoz, Simla & Yu, Tun-Hsiang, 2010. "The Global Bioenergy Expansion: How Large Are the Food−Fuel Trade-Offs?," Staff General Research Papers Archive 31603, Iowa State University, Department of Economics.
    4. John C. Beghin & Amani Elobeid, 2015. "The Impact of the U.S. Sugar Program Redux," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 37(1), pages 1-33.
    5. Dominique van der Mensbrugghe & John C. Beghin & Don Mitchell, 2003. "Modeling Tariff Rate Quotas in a Global Context: The Case of Sugar Markets in OECD Countries," Center for Agricultural and Rural Development (CARD) Publications 03-wp343, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Moyo, Sibusiso & Spreen, Thomas H., 2011. "An Update on the Consequences of EU Sugar Reform," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(1).
    7. Amani Elobeid & John Beghin, 2006. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 23-48, March.
    8. World Bank, 2009. "Land Reform, Rural Development, and Poverty in the Philippines : Revisiting the Agenda," World Bank Other Operational Studies 18545, The World Bank.
    9. Lee, Young-Jae, 2008. "Theoretical Examination of the Conditions of Best Management Practices Adoption and the Easing of Trade Distortion for Sugar," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6826, Southern Agricultural Economics Association.
    10. Elobeid, Amani & Tokgoz, Simla, 2008. "AJAE Appendix for “Removing Distortions in the U.S. Ethanol Market: What Does It Imply for the United States and Brazil?â€," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 90(4), November.
    11. Jo Lorentzen & Anton Cartwright & Charles Meth, 2010. "Trade Liberalization, Rural Poverty and the Environment: A Case Study of Sugarcane Production in the Incomati River Basin in Mpumalanga, South Africa," Chapters,in: Vulnerable Places, Vulnerable People, chapter 6 Edward Elgar Publishing.
    12. Zhuang, Renan & Koo, Won W., 2006. "Impacts of Sugar Free Trade Agreements on the U.S. Sugar Industry," 2006 Annual meeting, July 23-26, Long Beach, CA 21486, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Schmitz, Troy G. & Lewis, Karen E., 2015. "Impact of NAFTA on U.S. and Mexican Sugar Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(3), August.
    14. Lee, Dae-Seob & Kennedy, P. Lynn, 2005. "Demand behavior of U.S. high fructose corn syrup (HFCS) and its implication for the U.S. sweetener market: a cointegration analysis," 2005 Annual meeting, July 24-27, Providence, RI 19564, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Nolte, Stephan, 2008. "The Future Of The World Sugar Market--A Spatial Price Equilibrium Analysis," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6663, European Association of Agricultural Economists.
    16. Osman, Rehab Osman Mohamed, 2012. "The EU Economic Partnership Agreements with Southern Africa: a computable general equilibrium analysis," Economics PhD Theses 0412, Department of Economics, University of Sussex.
    17. Gohin, Alexandre & Bureau, Jean-Christophe, 2005. "Sugar Market Liberalization: Modeling the EU Supply of "C" Sugar," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24740, European Association of Agricultural Economists.
    18. Argent,Jonathan Thompson & Begazo Gomez,Tania Priscilla, 2015. "Competition in Kenyan markets and its impact on income and poverty : a case study on sugar and maize," Policy Research Working Paper Series 7179, The World Bank.
    19. Grethe, Harald & Nolte, Stephan & Banse, Martin, 2008. "Modelling The Effects Of Eu Sugar Market Liberalization On Area Allocation, Production And Trade," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6329, European Association of Agricultural Economists.
    20. repec:wsi:medjxx:v:03:y:2011:i:02:n:s1793812011000405 is not listed on IDEAS

    More about this item

    Keywords

    Agricultural and Food Policy; International Relations/Trade;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • F10 - International Economics - - Trade - - - General

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