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Economic Transition and the Distribution of Policy Rents: The Case of the Wheat-Flour-Bread Chain in Bulgaria

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  • Swinnen, Johan F M

Abstract

Ivanova et al. (1994) calculate disaggregated PSE/CSE transfers between different stages of the agro-food chain in Bulgaria since 1990. Some of their results appear counter-intuitive given the stylised facts. This note attempts to explain these results, using a more detailed study of the wheat-flour-bread chain. The first conclusion is that transitional excess profits and product quality improvements may explain part of the calculated transfers in favour of retailers but that this explanation is insufficient. A second conclusion is that the large net transfers to "retailers" are mostly rents collected by flour wholesale trading enterprises. A third conclusion is that transition business practices, including monopolistic and collusive behaviour in the agro-food chain, create rents which are not included in the calculated transfers. Fourth, including indirect transfers caused by exchange rates substantially affects the results. Finally, our analysis supports the previous conclusions on the inefficiency of Bulgarian policies. Copyright 1998 by Oxford University Press.

Suggested Citation

  • Swinnen, Johan F M, 1998. "Economic Transition and the Distribution of Policy Rents: The Case of the Wheat-Flour-Bread Chain in Bulgaria," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(2), pages 243-258.
    • Handle: RePEc:oup:erevae:v:25:y:1998:i:2:p:243-58
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    Cited by:

    1. Elena Briones Alonso & Jo Swinnen, 2015. "A value chain approach to measuring distortions to incentives and food policy effects (with application to Pakistan’s grain policy)," Working Papers of LICOS - Centre for Institutions and Economic Performance 493428, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    2. Rizov, Marian, 2006. "Rural development perspectives in enlarging Europe: The implications of CAP reforms and agricultural transition in accession countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(2), pages 219-238.
    3. Elena Briones Alonso & Johan Swinnen, 2015. "A Value Chain Approach to Measuring Distortions to Incentives and Food Policy Effects (with application to Pakistan’s grain policy)," Working Papers id:6895, eSocialSciences.
    4. Gow, Hamish R & Swinnen, Johan F M, 1998. "Up- and Downstream Restructuring, Foreign Direct Investment, and Hold-Up Problems in Agricultural Transition," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(3), pages 331-350.
    5. Guba, Ferenc Zoltán, 2001. "Transzferek és hatékonyságzavarok az élelmiszer-termékpályákon [Transfers and disturbances to efficiency in food product paths]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 44-62.
    6. Briones Alonso, Elena & Swinnen, Johan, 2016. "Who are the producers and consumers? Value chains and food policy effects in the wheat sector in Pakistan," Food Policy, Elsevier, vol. 61(C), pages 40-58.
    7. repec:lic:licosd:36615 is not listed on IDEAS

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