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Sugar Quotas and Crop Production Efficiency

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  • Bjerre, Markus
  • Jensen, Jorgen Dejgaard

Abstract

The paper deals with problems concerning the current sugar policy within the Common Agricultural Policy, especially the efficiency losses due to the combination of high prices and quota on subsidised sugar production. Based on a simple econometric model, the total economic costs of the current policy setting, compared with an unregulated setting, are estimated to be in the area of 20 per cent of the total sugar production, valued at world market prices. Of these costs, some 10 per cent are due to inefficiency in the crop production, as the opportunity costs of land are not taken into account because the sugar price support within the quota overrules these opportunity costs. However, according to the estimates obtained in the present study, the main economic gains by reducing the internal prices are to be found in terms of reduced

Suggested Citation

  • Bjerre, Markus & Jensen, Jorgen Dejgaard, 2002. "Sugar Quotas and Crop Production Efficiency," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24840, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae02:24840
    DOI: 10.22004/ag.econ.24840
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    References listed on IDEAS

    as
    1. Bureau, Jean-Christophe, et al, 1997. "Quota Mobility in the European Sugar Regime," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 24(1), pages 1-30.
    2. Poonyth, Daneswar & Westhoff, Patrick & Womack, Abner & Adams, Gary, 2000. "Impacts of WTO restrictions on subsidized EU sugar exports," Agricultural Economics, Blackwell, vol. 22(3), pages 233-245, April.
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