The Markets of Cotton Seed and Maize in Greece: Welfare Implications of the Common Agricultural Policy

The model developed in this paper is applied to cotton seed and maize industries and examines the welfare implications of the Common Agricultural Policy (CAP) cotton and maize policy regimes in Greece, after its accession in the European Union (1981). The results of the quantitative analysis indicate that in both markets remarkable amounts have been transferred in favor of producers. Cotton farmers received, however, considerably higher amounts and their income protection levels rose faster than was the case for maize farmers. On the other hand, maize consumers have lost, in terms of economic welfare, during the whole period under consideration and particularly after the mid-80's. This was not the case for cotton seed consumers, since they were buying during the whole period at world market prices. Finally, and in terms of economic efficiency, it has been shown that the CAP cotton regime is by far the more efficient compared to the maize regime due to the kind of practiced policies and the differences in the elasticities of supply.