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Subsidies in Global Value Chains or Where Does the Money Go?

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  • Flaig, Dorothee
  • Boysen-Urban, Kirsten

Abstract

Domestic support to agriculture constitutes an important part of European Union (EU) policies. With trade and especially in the framework of global value chains (GVCs) the question arises as to what extend each part of the value chain benefits from a subsidy. We track subsidy flows by combining techniques of value added decomposition originating from GVC analysis with detailed agricultural domestic support data for the EU. This allows us not only to track subsidy flows inside the EU, but also those that are incorporated in exports to the rest of the world. EU domestic support is often blamed to hurt African farmers. To get an idea on the importance of this argument from the demand side, we analyse the contribution of European agricultural domestic support for final demand in African countries. Results show that EU subsidies are “traded” substantially within the EU, but an unneglectable share is also captured by non-EU countries.

Suggested Citation

  • Flaig, Dorothee & Boysen-Urban, Kirsten, 2019. "Subsidies in Global Value Chains or Where Does the Money Go?," 59th Annual Conference, Braunschweig, Germany, September 25-27, 2019 292300, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi19:292300
    DOI: 10.22004/ag.econ.292300
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    Keywords

    Agricultural and Food Policy; International Relations/Trade;

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