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WTO Discipline and the CAP: the Constraints on the EU Sugar Sector

  • Gohin, Alexandre
  • Bureau, Jean-Christophe

The various assessments of the effects of a liberalization of world sugar markets are inconsistent with each other. One cause seems to be the modeling of the EU supply response. We investigate three possible linkages between sugar production under quota and the out-of-quota or "C" sugar supply: i/ the existence of fixed costs covered by the in-quota sugar; ii / the "overshooting" behavior as prevention against poor yields; iii/ the production of C sugar as "reference building" in view of expected reforms. Modeling these effects results in the introduction of an implicit crosssubsidy between in-quota sugar and C sugar. The resulting specification is included in a detailed model of the EU agricultural sector so as to account for intersectoral linkages. We simulate the effects of the 2005 reform of the sugar sector and the effects of a ban on sugar export subsidies.

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Paper provided by TRADEAG - Agricultural Trade Agreements in its series Working Papers with number 18872.

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Date of creation: 2006
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Handle: RePEc:ags:tragwp:18872
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  1. Witzke, Heinz Peter & Heckelei, Thomas, 2002. "Eu Sugar Policy Reform: Quota Reduction And Devaluation," 2002 Annual meeting, July 28-31, Long Beach, CA 19807, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Antoine Bouët & Jean-Christophe Bureau & Yvan Decreux & Sébastien Jean, 2004. "Multilateral Agricultural Trade Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round," Working Papers 2004-18, CEPII research center.
  3. Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990. "Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?," Papers 8905, Michigan State - Econometrics and Economic Theory.
  4. 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.
  5. Peterson, Everett B & Hertel, Thomas W & Preckel, Paul V, 1994. "A General Equilibrium Framework for the Food Marketing System," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 21(1), pages 37-57.
  6. Gohin, Alexandre & Moschini, GianCarlo, 2006. "Evaluating the Market and Welfare Impacts of Agricultural Policies in Developed Countries: Comparison of Partial and General Equilibrium Measures," Staff General Research Papers 12727, Iowa State University, Department of Economics.
  7. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 22(3), April.
  8. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics, Blackwell, vol. 22(3), pages 233-245, April.
  9. Alexandre Gohin & Laure Latruffe, 2006. "The Luxembourg Common Agricultural Policy Reform and the European Food Industries: What's at Stake?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(1), pages 175-194, 03.
  10. Nancy H. Chau & Harry de Gorter, 2005. "Disentangling the Consequences of Direct Payment Schemes in Agriculture on Fixed Costs, Exit Decisions, and Output," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1174-1181.
  11. Jean-Christophe Bureau & Herve Guyomard & Laurent Morin & Vincent Réquillart, 1997. "Quota mobility in the European sugar regime," Working Papers 152347, Institut National de la Recherche Agronomique, France.
  12. Alan W. Renwick & Cesar L. Revoredo Giha & Mark A. Reader, 2005. "UK Sugar Beet Farm Productivity under Different Reform Scenarios: A Farm Level Analysis," Environmental Economy and Policy Research Working Papers 04.2005, University of Cambridge, Department of Land Economics, revised 2005.
  13. Rozakis, S. & Sourie, J. -C., 2005. "Micro-economic modelling of biofuel system in France to determine tax exemption policy under uncertainty," Energy Policy, Elsevier, vol. 33(2), pages 171-182, January.
  14. Ball, V Eldon, et al, 1993. "The Stock of Capital in European Community Agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 20(4), pages 437-50.
  15. 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.
  16. Jean-Claude Sourie & David Tréguer & Stelios Rozakis, 2005. "L'ambivalence des filières biocarburants," INRA Sciences Sociales, INRA Department of Economics.
  17. Mahler, Peter, 1994. "Efficiency Losses as a Result of Insufficient Structural Adjustments Due to the EC Sugar Regime: The Case of Germany," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 21(2), pages 199-218.
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