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The Economics of Planting Rights in Wine Production

Author

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  • Koen Deconinck
  • Johan Swinnen

Abstract

Almost half of the world’s vineyards are in the EU and the EU produces around 60% of the world’s wine. The EU is also the world’s most regulated wine market. In 2007, the European Union decided on a major reform of its wine policy, the so-called Common Market Organization (CMO) for wine. A crucial element was the abolishment of a system of planting rights to regulate planting of vineyards in the EU. However, before its implementation opponents of the liberalization of planting rights are lobbying EU governments to reverse the decision. Our paper provides the first theoretical analysis of the economic effects and the welfare implications of planting rights. Our model integrates the markets for land, planting rights and wine to analyze the efficiency and distributional effects. We analyze the impact of enforcement problems, trade restrictions, and the use of government reserves in the planting rights system.

Suggested Citation

  • Koen Deconinck & Johan Swinnen, 2013. "The Economics of Planting Rights in Wine Production," LICOS Discussion Papers 32513, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:32513
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    File URL: http://feb.kuleuven.be/drc/licos/publications/dp/dp325new
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    References listed on IDEAS

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    1. Alston, Julian M., 1981. "A Note on the Effects of Non-Transferable Quotas on Supply Functions," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 49(03), December.
    2. Alexandre Gohin & Jean-Christophe Bureau, 2006. "Modelling the EU sugar supply to assess sectoral policy reforms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(2), pages 223-247, June.
    3. Bourgeon, Jean-Marc & Jayet, Pierre-Alain & Picard, Pierre, 1995. "An incentive approach to land set-aside programs," European Economic Review, Elsevier, vol. 39(8), pages 1487-1509, October.
    4. James Fogarty, 2010. "The Demand For Beer, Wine And Spirits: A Survey Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 428-478, July.
    5. Gisser, Micha, 1993. "Price Support, Acreage Controls, and Efficient Redistribution," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 584-611, August.
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    Cited by:

    1. repec:fan:ecaqec:v:html10.3280/ecag2017-001004 is not listed on IDEAS
    2. repec:col:000129:015685 is not listed on IDEAS

    More about this item

    Keywords

    planting rights; wine; Common Agricultural Policy; Common Market Organization; policy analysis;

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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