IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04702290.html
   My bibliography  Save this paper

Ensuring farm minimum prices: Economic impacts of trade vs competition policies

Author

Listed:
  • Alexandre Gohin

    (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Alan Matthews

    (Trinity College Dublin)

Abstract

French and European farmers vigorously protest in early 2024 against perceived poor economic conditions, increased paperwork burden as well as stringent environmental constraints. The initial policy responses by both national and EU authorities failed to completely calm them, leading the French president Emmanuel Macron to surprisingly propose minimum farm prices. This paper develops an original computable general equilibrium model framework to assess two policy options to reach these minimum prices for livestock industries. The first relies on trade policy instruments and the second on a new competition policy with price discrimination and motivated by the Egalim laws. We find that the first option is unlikely to support French and European farm and food incomes, particularly if third countries reply with similar trade instruments. By contrast, the price discrimination option can support farm incomes, but partly at the expense of the domestic consumption of livestock products.

Suggested Citation

  • Alexandre Gohin & Alan Matthews, 2024. "Ensuring farm minimum prices: Economic impacts of trade vs competition policies," Post-Print hal-04702290, HAL.
    • Handle: RePEc:hal:journl:hal-04702290
    DOI: 10.1016/j.inteco.2024.100549
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Allain, Marie-Laure & Chambolle, Claire & Turolla, Stéphane, 2022. "The Effect of Input Price Discrimination on Retail Prices: Theory and Evidence from France," Working Papers 327329, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    2. Femenia, Fabienne, 2019. "A Meta-Analysis of the Price and Income Elasticities of Food Demand," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(2), June.
    3. Fontaine, François & Martin, Julien & Mejean, Isabelle, 2020. "Price discrimination within and across EMU markets: Evidence from French exporters," Journal of International Economics, Elsevier, vol. 124(C).
    4. Ina Simonovska, 2015. "Income Differences and Prices of Tradables: Insights from an Online Retailer," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(4), pages 1612-1656.
    5. Peterson, Everett B. & Lee, Huey-Lin, 2009. "Implications of incorporating domestic margins into analyses of energy taxation and climate change policies," Economic Modelling, Elsevier, vol. 26(2), pages 370-378, March.
    6. Bouamra-Mechemache, Z. & Chavas, J.P. & Cox, T. & Réquillart, V., 2001. "Price discrimination and EU dairy policy : an economic evaluation of policy options," Economics Working Paper Archive (Toulouse) 23, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    7. Edward J. Balistreri & David G. Tarr, 2022. "Welfare gains in the Armington, Krugman and Melitz models: Comparisons grounded on gravity," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1681-1703, October.
    8. Peterson, Everett B & Hertel, Thomas W & Preckel, Paul V, 1994. "A General Equilibrium Framework for the Food Marketing System," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 21(1), pages 37-57.
    9. Matthews Alan, 2024. "Farmer Protests and the 2024 European Parliament Elections," Intereconomics: Review of European Economic Policy, Sciendo, vol. 59(2), pages 83-87, March.
    10. Beckman, Jayson & Burfisher, Mary & Mitchell, Lorraine & Arita, Shawn, 2021. "Hidden obstacles to trade: The case of the EU’s Ban on beef hormones," Journal of Policy Modeling, Elsevier, vol. 43(6), pages 1332-1343.
    11. Fontagné, Lionel & Guimbard, Houssein & Orefice, Gianluca, 2022. "Tariff-based product-level trade elasticities," Journal of International Economics, Elsevier, vol. 137(C).
    12. James Markusen, 2023. "Incorporating Theory-Consistent Endogenous Markups into Applied General-Equilibrium Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 8(2), pages 60-99, December.
    13. Céline Bonnet & Pauline Leveneur, 2023. "Loi EGAlim : quels effets pour les consommateurs et la grande distribution ?," Revue économique, Presses de Sciences-Po, vol. 74(5), pages 805-831.
    14. Iaria Fusacchia & Anna Giunta & Marianna Mantuano & Enrico Marvasi & Silvia Nenci & Luca Salvatici & Davide Vurchio, 2024. "Microfoundation of ICIO Tables through Firm-Level Data: Enhancing GVC Participation and Positioning Indicators," Departmental Working Papers of Economics - University 'Roma Tre' 0279, Department of Economics - University Roma Tre.
    15. Emanuele Ferrari & Christian Elleby & Beyhan DE JONG & Robert M'barek & Ignacio PEREZ DOMINGUEZ, 2024. "Cumulative economic impact of upcoming trade agreements on EU agriculture," JRC Research Reports JRC135540, Joint Research Centre.
    16. Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The Effects of Retail Regulations on Prices: Evidence from the Loi Galland," Economic Journal, Royal Economic Society, vol. 123(12), pages 1279-1312, December.
    17. Harris, Richard, 1984. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," American Economic Review, American Economic Association, vol. 74(5), pages 1016-1032, December.
    18. Zhang, Wei, 2021. "California's Climate Policy and the Dairy Manufacturing Industry: How Does a Federal Milk Marketing Order Matter?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 46(3), September.
    19. Jongeneel, Roel & Gonzalez-Martinez, Ana Rosa, 2022. "The role of market drivers in explaining the EU milk supply after the milk quota abolition," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 194-209.
    20. Thomas L. Cox & Jean-Paul Chavas, 2001. "An Interregional Analysis of Price Discrimination and Domestic Policy Reform in the U.S. Dairy Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 89-106.
    21. Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The Effects of Retail Regulations on Prices: Evidence from the Loi Galland," Economic Journal, Royal Economic Society, vol. 123(12), pages 1279-1312, December.
    22. Bouyssou, Clara G. & Jensen, Jørgen Dejgård & Yu, Wusheng, 2024. "Food for thought: A meta-analysis of animal food demand elasticities across world regions," Food Policy, Elsevier, vol. 122(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Martimort & Jérôme Pouyet, 2024. "Promotional Allowances: Loss Leading as an Incentive Device," Working Papers hal-04758824, HAL.
    2. Céline Bonnet & Pierre Dubois, 2010. "Inference on vertical contracts between manufacturers and retailers allowing for nonlinear pricing and resale price maintenance," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 139-164, March.
    3. Bonnet, Céline & Réquillart, Vincent, 2013. "Sugar Policy Reform, Tax Policy and Price Transmission in the Soft Drink Industry," TSE Working Papers 13-373, Toulouse School of Economics (TSE).
    4. Nobunori Kuga & Nobuhiro Suzuki & Harry M. Kaiser, 2010. "Trade implications of price discrimination in a domestic market," Agribusiness, John Wiley & Sons, Ltd., vol. 26(1), pages 64-82.
    5. Patrick Rey & Thibaud Vergé, 2010. "Resale Price Maintenance And Interlocking Relationships," Journal of Industrial Economics, Wiley Blackwell, vol. 58(4), pages 928-961, December.
    6. Christos Genakos & Mario Pagliero & Lorien Sabatino & Tommaso Valletti, 2025. "Cultural exception? The impact of price regulation on prices and variety in the market for books," CEP Discussion Papers dp2085, Centre for Economic Performance, LSE.
    7. Stéphane Turolla, 2016. "Spatial Competition in the French Supermarket Industry," Annals of Economics and Statistics, GENES, issue 121-122, pages 213-259.
    8. Robert C. Feenstra, 2010. "Measuring the gains from trade under monopolistic competition," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(1), pages 1-28, February.
    9. Nagengast, Arne J. & Bursian, Dirk & Menz, Jan-Oliver, 2021. "Dynamic pricing and exchange rate pass-through: Evidence from transaction-level data," European Economic Review, Elsevier, vol. 133(C).
    10. Réquillart, Vincent & Simioni, Michel & Varela-Irimia, Xose-Luis, 2008. "Imperfect Competition in the Fresh Tomato Industry," IDEI Working Papers 498, Institut d'Économie Industrielle (IDEI), Toulouse, revised 25 Feb 2009.
    11. Juan Esteban Carranza & Robert Clark & Jean-François Houde, 2015. "Price Controls and Market Structure: Evidence from Gasoline Retail Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 152-198, March.
    12. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia B. Villas-Boas, 2017. "Retail Mergers and Food Prices: Evidence from France," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 469-509, September.
    13. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia Villas-Boas, 2013. "The Impact of Retail Mergers on Food Prices: Evidence from France," Working Papers hal-00920460, HAL.
    14. Rebecca Cleary & Lauren Chenarides, 2022. "Food retail profits, competition, and the Great Recession," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 557-578, July.
    15. Clémence Berson, 2012. "Does Competition Induce Hiring Equity ?," Post-Print halshs-00718627, HAL.
    16. Kuga, Nobunori & Vavra, Pavel & Anton, Jesus & Dewbre, Joe, 2003. "Trade And Welfare Effects Of Dairy Price Support Measures," 2003 Annual meeting, July 27-30, Montreal, Canada 21951, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. repec:ags:aaea22:335985 is not listed on IDEAS
    18. Luca Macedoni & Elena Mattana, 2024. "Pricing in firm-to-firm trade: evidence from a Danish multinational," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(2), pages 311-375, May.
    19. Eliana Viviano & Luciana Aimone Gigio & Emanuela Ciapanna & Daniele Coin & Fabrizio Colonna & Federica Lagna & Raffaele Santioni, 2012. "The retail trade sector and the food industry in Italy," Questioni di Economia e Finanza (Occasional Papers) 119, Bank of Italy, Economic Research and International Relations Area.
    20. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    21. Xavier D’Haultfoeuille & Pauline Givord, 2014. "La régression quantile en pratique," Économie et Statistique, Programme National Persée, vol. 471(1), pages 85-111.

    More about this item

    Keywords

    Farm crisis; Price; Computable general equilibrium; Trade; Competition;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04702290. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.