IDEAS home Printed from
   My bibliography  Save this paper

Abolishing green rates : the effects on cereals, sugar, and oilseeds in West Germany


  • Larson, Donald F.
  • Glance, Simon
  • Borrell, Brent
  • Ingco, Merlinda
  • Coleman, Jonathan


In 1987 the European Community began the ambitious task of forging a single market for goods and services across the national borders of its member states by 1992. Substantive reform of the Community's Common Agricultural Policy - necessary for the full integration of existing markets - has not yet been accomplished and has proven difficult to achieve. Creating a truly"common"agricultural policy in the European Community requires, at a minimum, eliminating price differences resulting from country- and commodity-specific exchange rates, known as"green rates."The authors discuss the various policy instruments that complicate the effects of these policy-determined price differences on crop production and the demand for inputs. They present a model that estimates the cross-commodity biases created by multiple policy instruments and that quantifies the effects of removing green-rate differentials in what was West Germany. The effects of price changes on domestic production are statistically significant in the model, although quantitatively small. This result suggests that eliminating green rates would lead primarily to a decline in farm income and a devaluation of fixed agricultural assets - which complicates the difficult task of attaining reform.

Suggested Citation

  • Larson, Donald F. & Glance, Simon & Borrell, Brent & Ingco, Merlinda & Coleman, Jonathan, 1991. "Abolishing green rates : the effects on cereals, sugar, and oilseeds in West Germany," Policy Research Working Paper Series 607, The World Bank.
  • Handle: RePEc:wbk:wbrwps:607

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. McFadden, Daniel, 1978. "Cost, Revenue, and Profit Functions," Histoy of Economic Thought Chapters,in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 1 McMaster University Archive for the History of Economic Thought.
    2. Ramon E. Lopez, 1984. "Estimating Substitution and Expansion Effects Using a Profit Function Framework," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 358-367.
    3. Moschini, GianCarlo, 1988. "Model of Production with Supply Management for the Canadian Agricultural Sector, A," Staff General Research Papers Archive 11269, Iowa State University, Department of Economics.
    4. Gallant, A Ronald & Holly, Alberto, 1980. "Statistical Inference in an Implicit, Nonlinear, Simultaneous Equation Model in the Context of Maximum Likelihood Estimation," Econometrica, Econometric Society, vol. 48(3), pages 697-720, April.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Arnade, Carlos Anthony & Kelch, David R. & Leetmaa, Susan E., 2002. "Supply Response In France, Germany, And The Uk: Technology And Price," 2002 Annual meeting, July 28-31, Long Beach, CA 19702, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).


    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:wbk:wbrwps:607. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.