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The determinants of European agricultural trade interference

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  • Gerken, Egbert

Abstract

First World politicians ascribe an exceptionally high social value to the well-being of domestic farmers, apparently without being penalized by political setbacks. In the European Community (EC) , they fix domestic prices on most agricultural commodities above world market prices, sustain these prices through variable import levies and export restitutions, subsidize production and factor use and dampen price fluctuations, all with the purpose of raising the levels and improving the stability of farmers1 incomes. While agricultural policymakers in the United States (US) and in most other OECD countries do not always intervene in the same commodity markets, they generally rely on the same set of instruments . Given the fairly inelastic demand and supply responses among Second World planners and the limited flexibility among Third World producers and consumers, the effect of agricultural policies adopted in the First World is to lower the levels of world agricultural prices and to amplify their oscillations . World welfare' is reduced as a result.

Suggested Citation

  • Gerken, Egbert, 1986. "The determinants of European agricultural trade interference," Kiel Working Papers 254, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:254
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    References listed on IDEAS

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    1. Vincent, David P & Dixon, Peter B & Powell, Alan A, 1980. "The Estimation of Supply Response in Australian Agrucilture: The CRESH/CRETH Production System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 221-242, February.
    2. Alexander H. Sarris & John Freebairn, 1983. "Endogenous Price Policies and International Wheat Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(2), pages 214-224.
    3. Christopher Ritson & Stefan Tangermann, 1979. "The economics and politics of monetary compensatory amounts," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 6(2), pages 119-164.
    4. Kirkpatrick, Grant, 1984. "A continuous time cyclical growth model for the Federal Republic of Germany: Construction, estimation and analysis," Kiel Working Papers 219, Kiel Institute for the World Economy (IfW Kiel).
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    1. Dimitrios G. Demekas & Kasper Bartholdy & Sanjeev Gupta & Leslie Lipschitz & Thomas Mayer, 1988. "The Effects of the Common Agricultural Policy of the European Community: A Survey of the Literature," Journal of Common Market Studies, Wiley Blackwell, vol. 27(2), pages 113-145, December.

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