IDEAS home Printed from https://ideas.repec.org/p/ags/aaea01/20503.html
   My bibliography  Save this paper

The Real Rate Of Protection: The Stabilizing Effect Of Price Policies And Direct Payments

Author

Listed:
  • Thompson, Stanley R.
  • Schmitz, P. Michael

Abstract

Traditional indicators of protection refer to the level effect of price policies on income and ignore the stabilizing effect. We derive a measure of the real rate of protection which incorporates these dual dimensions. The income stabilizing effects of price policy protection lead to a greater level of real protection than would be measured conventionally. Computed real protection rates for the European Union wheat market over the pre- and post-MacSharry reform periods were found to be some 3-5 percent greater than traditional indicators. Moreover, the compensatory payments to farmers following the 1992 reforms had a major risk reducing impact.

Suggested Citation

  • Thompson, Stanley R. & Schmitz, P. Michael, 2001. "The Real Rate Of Protection: The Stabilizing Effect Of Price Policies And Direct Payments," 2001 Annual meeting, August 5-8, Chicago, IL 20503, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20503
    DOI: 10.22004/ag.econ.20503
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/20503/files/sp01th01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.20503?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bureau, Jean Christophe & Butault, Jean-Pierre & Hoque, Anwarul, 1992. "International Comparisons of Costs of Wheat Production in the EC and United States," Staff Reports 278676, United States Department of Agriculture, Economic Research Service.
    2. Atanu Saha & C. Richard Shumway & Hovav Talpaz, 1994. "Joint Estimation of Risk Preference Structure and Technology Using Expo-Power Utility," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 173-184.
    3. Schmitz, Michael, 1997. "Cap and Food Security," 1997 Occasional Paper Series No. 7 198056, International Association of Agricultural Economists.
    4. Cuddy, John D A & Della Valle, P A, 1978. "Measuring the Instability of Time Series Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 40(1), pages 79-85, February.
    5. Tyers,Rod & Anderson,Kym, 2011. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521172318, January.
    6. Stanley R. Thompson & Roland Herrmann & Wolfgang Gohout, 2000. "Agricultural Market Liberalization and Instability of Domestic Agricultural Markets: The Case of the CAP," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 718-726.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Harsche, J., 2007. "Räumlich differenzierte Stabilisierungswirkungen der Europäischen Agrarpolitik in unterschiedlich konditionierten Erzeugerregionen in Hessen," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 42, March.
    2. Harsche, Johannes, 2006. "Räumlich Differenzierte Stabilisierungswirkungen Der Europäischen Agrarpolitik In Unterschiedlich Konditionierten Erzeugerregionen In Hessen," 46th Annual Conference, Giessen, Germany, October 4-6, 2006 14949, German Association of Agricultural Economists (GEWISOLA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thompson, Stanley R. & Gohout, Wolfgang, 2000. "Cap Reform, Wheat Price Instability And Producer Welfare," 2000 Annual meeting, July 30-August 2, Tampa, FL 21780, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Berger, Jurij & Dalheimer, Bernhard & Brümmer, Bernhard, 2021. "Effects of variable EU import levies on corn price volatility," Food Policy, Elsevier, vol. 102(C).
    3. Stanley Thompson & P. Michael Schmitz & Nobuyuki Iwai & Barry Goodwin, 2004. "The real rate of protection: the income and insurance effects of agricultural policy," Applied Economics, Taylor & Francis Journals, vol. 36(16), pages 1851-1858.
    4. Hansen, Heiko, 2006. "Destabilising Farmers' Revenues by Shifting to Direct Payments? The Case of EU's Common Agricultural Policy," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25731, International Association of Agricultural Economists.
    5. Alfons Oude Lansink, 1999. "Area Allocation Under Price Uncertainty on Dutch Arable Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 93-105, January.
    6. Harvey, David R., 2003. "Policy Dependency And Reform: Economic Gains Versus Political Pains," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25865, International Association of Agricultural Economists.
    7. Li, Chenguang & Sexton, Richard J., 2009. "Impacts of Retailers’ Pricing Strategies for Produce Commodities on Farmer Welfare," 2009 Conference, August 16-22, 2009, Beijing, China 51720, International Association of Agricultural Economists.
    8. François Facchini, 2006. "Des effets de la libéralisation des marchés agricoles," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01286774, HAL.
    9. Balié, Jean & Valera, Harold Glenn, 2020. "Domestic and international impacts of the rice trade policy reform in the Philippines," Food Policy, Elsevier, vol. 92(C).
    10. Unnevehr, Laurian J., 2000. "Food safety issues and fresh food product exports from LDCs," Agricultural Economics, Blackwell, vol. 23(3), pages 231-240, September.
    11. Lips, Markus & Rieder, Peter, 2002. "Endogenous adjusted Output Quotas - The Abolishment of the Raw Milk Quota in the European Union," Conference papers 330980, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Kym Anderson, 2006. "Reducing Distortions to Agricultural Incentives: Progress, Pitfalls, and Prospects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1135-1146.
    13. Valdes, Alberto & Zietz, Joachim, 1995. "Distortions in world food markets in the wake of GATT: Evidence and policy implications," World Development, Elsevier, vol. 23(6), pages 913-926, June.
    14. Kim, Tae-Hun, 2008. "The measurement of farmers' risk attitudes using a non-structural approach," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 31(2), pages 1-18, May.
    15. Harvey, David R., 2004. "Policy dependency and reform: economic gains versus political pains," Agricultural Economics, Blackwell, vol. 31(2-3), pages 265-275, December.
    16. Zsolt Hollósy & Muhammad Imam Ma’ruf & Zsuzsanna Bacsi, 2023. "Technological Advancements and the Changing Face of Crop Yield Stability in Asia," Economies, MDPI, vol. 11(12), pages 1-24, December.
    17. Richard Wamalwa Wanzala & Lawrence Ogechukwu Obokoh, 2024. "Sustainability Implications of Commodity Price Shocks and Commodity Dependence in Selected Sub-Saharan Countries," Sustainability, MDPI, vol. 16(20), pages 1-26, October.
    18. World Bank, 2005. "Managing Food Price Risks and Instability in an Environment of Market Liberalization," World Bank Publications - Reports 8264, The World Bank Group.
    19. Alan Matthews, 2010. "Perspectives on Addressing Market Instability and Income Risk for Farmers," The Institute for International Integration Studies Discussion Paper Series iiisdp324, IIIS, revised Apr 2010.
    20. Cabrini, Silvina M. & Stark, Brian G. & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes, 2005. "Portfolios of Agricultural Market Advisory Services: How Much Diversification is Enough?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(01), pages 1-14, April.

    More about this item

    Keywords

    International Relations/Trade;

    Statistics

    Access and download statistics

    Corrections

    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:ags:aaea01:20503. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.