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Market Stabilization and the Reform of the Common Agricultural Policy

Author

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  • Anderson, Ronald W.

Abstract

I solve numerically for stationary rational-expectations equilibria of a two-country, non-linear model of a storable commodity. With constant tariffs, price volatilities in both countries increase with an increase in the tariff rate of one country or with an increase in the storage cost in one country. When one country (`the EC') uses a variable import levy and export subsidy to defend a fixed price floor, increases in the floor (a) increase mean price and decrease price volatility in the EC and (b) decrease mean price, increase volatility and increase private stockholding in the rest of the world. The volatility of farm incomes in the EC are relatively insensitive to increases in the floor.

Suggested Citation

  • Anderson, Ronald W., 1992. "Market Stabilization and the Reform of the Common Agricultural Policy," CEPR Discussion Papers 740, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:740
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    Citations

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    Cited by:

    1. Femenia, Fabienne, 2012. "Should private storage be subsidized to stabilize agricultural markets once price support schemes are removed? A General Equilibrium analysis applied to European reforms," Conference papers 330253, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Femenia, Fabienne, 2011. "To Subsidize or Not to Subsidize Private Storage? Evaluation of the Effects of Private Storage Subsidies as an Instrument to Stabilize Agricultural Markets After CAP Reforms," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114360, European Association of Agricultural Economists.
    3. Femenia, Fabienne, 2010. "Impacts of Stockholding Behaviour on Agricultural Market Volatility: A Dynamic Computable General Equilibrium Approach," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(03), pages 1-15, September.
    4. Féménia, Fabienne & Gohin, Alexandre, 2010. "Faut-il une intervention publique pour stabiliser les marchés agricoles ? Revue des questions non résolues," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 91(4).
    5. Larry Karp & Spiro Stefanou, 1994. "Domestic and trade policy for Central and East European agriculture1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(3), pages 345-371, September.
    6. Femenia, Fabienne, 2010. "Impacts of Stockholding Behaviour on Agricultural Market Volatility: A Dynamic Computable General Equilibrium Approach," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
    7. Femenia, Fabienne, 2012. "Should private storage be subsidized to stabilize agricultural markets after price support schemes are removed?:," IFPRI discussion papers 1205, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Commodities; Common Agricultural Policy; Stabilization; Storage;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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