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On The Optimal Implementation Of Agricultural Policy Reforms


  • Femenia, Fabienne
  • Gohin, Alexandre


Economic analyses of farm policies generally focus on the long run, steady state impacts while the transition dynamics are often overlooked. In this paper we develop a determinist dynamic computable general equilibrium analysis allowing agents to form imperfect versus pefect expectations. Using an illustrative CAP reform scenario, we simulate an abrupt versus a gradual implementation of this reform. Our results show that if economic agents are able to perfectly anticipate the impacts of the reform, then delaying its implementation is never optimal. On the other hand, if agents gradually learn from market developments, then we find some cases where a gradual implementation of this reform is welfare improving. Such gradual implementation allows minimizing adjustment costs.

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  • Femenia, Fabienne & Gohin, Alexandre, 2010. "On The Optimal Implementation Of Agricultural Policy Reforms," Proceedings Issues, 2010: Climate Change in World Agriculture: Mitigation, Adaptation, Trade and Food Security, June 2010, Stuttgart- Hohenheim, Germany 91285, International Agricultural Trade Research Consortium.
  • Handle: RePEc:ags:iatr10:91285

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    References listed on IDEAS

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    Cited by:

    1. Owen, P. Dorian & Winchester, Niven, 2014. "The impact of US fresh milk production standards on dairy trade," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 1008-1021.
    2. Feil, Jan-Henning & Musshoff, Oliver & Roeren-Wiemers, Tobias, 2014. "Farm level effects of policy reforms in Germany: First empirical evidence," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 1036-1047.
    3. Gohin, Alexandre & Zheng, Yu, 2015. "Assessing the Market Impacts of the Common Agricultural Policy: Does Farmers’ Risk Attitude Matter?," Proceedings Issues, 2014: Trade and Societal Well-Being, December 13-15, 2015, Clearwater Beach, Florida 229235, International Agricultural Trade Research Consortium.

    More about this item


    Dynamics; Transition; Farm Policies; Welfare; Agricultural and Food Policy; Political Economy;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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