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Environmental and Economic Effects of a Fall in Cereal Prices in the EU Internal Market: the Case of Denmark

Author

Listed:
  • Mette Wier
  • Berit Hasler
  • Johnny Andersen
  • Jørgen Jensen

Abstract

Reform of the EuropeanCommon Agricultural Policy (the CAP) willreduce cereal prices in the Internal Marketwhile simultaneously increasing direct supportto farmers (Agenda 2000). This paper examinesthe possible effects of liberalisation of theCAP by modelling the effects of a 10 per centreduction in cereal prices combined withcompensation to farmers. We applied anintegrated modelling system suitable forestimating both the economic and environmentalconsequences of agricultural and environmentalpolicy measures and calculated the effects of a10 per cent fall in cereal prices on nitrogenloading of the Danish marine waters, on privateconsumption, GDP, the balance of payments, andemployment. The results indicate that pricereductions do not have significant effects onnitrogen loading relative to the 50 per centreduction target, since a 10 per cent reductionin cereal prices only leads to a 2.4 per centreduction in loading. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Mette Wier & Berit Hasler & Johnny Andersen & Jørgen Jensen, 2001. "Environmental and Economic Effects of a Fall in Cereal Prices in the EU Internal Market: the Case of Denmark," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(1), pages 73-90, September.
    • Handle: RePEc:kap:enreec:v:20:y:2001:i:1:p:73-90
    DOI: 10.1023/A:1017922417931
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    References listed on IDEAS

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    1. Mette Wier, 2000. "An Environmental Macro-Economic Model for the Construction Sector," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(4), pages 323-341, April.
    2. Dam, Poul Uffe, 1986. "The Danish macroeconomic model ADAM : A survey," Economic Modelling, Elsevier, vol. 3(1), pages 31-44, January.
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    Cited by:

    1. Frits Møller & Dorte Grinderslev & Morten Werner, 2003. "Environmental Satellite Models for a Macroeconomic Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(3), pages 197-212, March.
    2. Wier, Mette & Andersen, Johnny M. & Jensen, Jorgen D. & Jensen, Thomas C., 2002. "The EU's Agenda 2000 reform for the agricultural sector: environmental and economic effects in Denmark," Ecological Economics, Elsevier, vol. 41(2), pages 345-359, May.
    3. FOUDI Sebastien, 2006. "Agriculture and Resource Exploitation: A Dynamic Bioeconomic Model of Agricultural Effort and Land Use Determination," LERNA Working Papers 06.25.218, LERNA, University of Toulouse.

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