IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01931641.html
   My bibliography  Save this paper

The Luxembourg Common Agricultural Policy reform and the European food industries: what's at stake?

Author

Listed:
  • Alexandre Gohin

    (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

  • Laure Latruffe

    (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

Abstract

On June 26, 2003, the European Union (EU) adopted a new reform of its Common Agricultural Policy (CAP). Its boldest measure is the creation of a Single Farm Payment that will replace most of the present direct payments. We address quantitatively three issues raised by this new reform, using a computable general equilibrium model that allows us to measure the impacts on the food industries as well as their role in the transmission of impacts along the food chain. The first issue examined is whether this reform helps the EU15 to remove the controversial export subsidies. Our numerical results show that this reform effectively reduces the amount of export subsidies but without removing them. Our second concern lies with the production and trade distortion impacts of CAP direct payments. We investigate this issue in the case of full decoupling, as well as partial decoupling as chosen by EU15 member states. We find that they have rather similar effects on production and trade. Finally, we explore the employment effects, and findings indicate that this reform leads to a significant decline of farm labor and, by contrast, to a very modest impact on the employment level by food processors. Generally, food industries are only marginally affected by this CAP reform.

Suggested Citation

  • Alexandre Gohin & Laure Latruffe, 2006. "The Luxembourg Common Agricultural Policy reform and the European food industries: what's at stake?," Post-Print hal-01931641, HAL.
    • Handle: RePEc:hal:journl:hal-01931641
    DOI: 10.1111/j.1744-7976.2006.00044.x
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hertel, Thomas W. & Keeney, Roman & Valenzuela, Ernesto, 2004. "Global Analysis Of Agricultural Trade Liberalization: Assessing Model Validity," 2004 Annual meeting, August 1-4, Denver, CO 20199, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Alexandre Gohin & Hervé Guyomard, 1999. "Agenda 2000, dairy policy instruments and farm milk price," Post-Print hal-01931591, HAL.
    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. Gohin, Alexandre & Bureau, Jean-Christophe, 2006. "WTO Discipline and the CAP: the Constraints on the EU Sugar Sector," Working Papers 18872, TRADEAG - Agricultural Trade Agreements.
    2. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    3. Psaltopoulos, Demetris & Balamou, Eudokia & Skuras, Dimitris & Ratinger, Tomas & Sieber, Stefan, 2011. "Modelling the impacts of CAP Pillar 1 and 2 measures on local economies in Europe: Testing a case study-based CGE-model approach," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 53-69, January.
    4. Ratinger, Tomas & Kristkova, R., 2012. "Rural Economies and ahe Pillar 2 Budget Debate: A Regional Perspective," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4), pages 1-11, December.
    5. Fogarasi, József & Kristkova, Zuzana & Ratinger, Tomáš & Rokicki, Bartłomiej & Tóth, Kristóf & Wieliczko, Barbara, 2013. "Assessment of the impact of the EU "agricultural budget" for the period 2014-2020 on the financial situation of the national agriculture and the entire economy," Multiannual Program Reports 179499, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    6. Psaltopoulos, Dimitrios & Phimister, Euan & Ratinger, Tomas & Roberts, Deborah & Skuras, Dimitris & Santini, Fabien & Gomez y Paloma, Sergio & Balamou, Eudokia & Espinosa, Maria & Mary, Sebastien, 2011. "An Ex-ante Rural/Urban Analysis of Common Agricultural Policy Options," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114780, European Association of Agricultural Economists.
    7. Gracia, Azucena & de Magistris, Tiziana & Casado, Jose Maria, 2008. "The Effect Of The New Single Farm Payment In Irrigated Agriculture: The Case Of Spain," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6590, European Association of Agricultural Economists.
    8. Jindrich SPICKA & Zdenka NAGLOVA & Martin GURTLER, 2017. "Effects of the investment support in the Czech meat processing industry," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(8), pages 356-369.
    9. Gelan, Ayele & Schwarz, Gerald, 2011. "Estimating the effects of single farm payments on multi-output agricultural production function," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(2).
    10. Rude, James, 2007. "Production Effects of the European Union’s Single Farm Payment," Working Papers 7335, Canadian Agricultural Trade Policy Research Network.
    11. Cécile Détang-Dessendre & Jean-Noel Depeyrot & Laurent Piet, 2021. "CAP and agricultural employment: a European outlook [PAC et emploi agricole : un regard européen]," Post-Print hal-04395194, HAL.
    12. Antonioli, Federico & Santeramo, Fabio Gaetano, 2022. "On Policy Interventions and Vertical Price Transmission: The Italian Milk Supply Chain Case," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(2), May.
    13. Karine Daniel & Maureen Kilkenny, 2009. "Agricultural Subsidies and Rural Development," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 504-529, September.
    14. Antonioli, Federico & Santeramo, Fabio, 2017. "Vertical Price Transmission in Milk Supply Chain: Market Changes and Asymmetric Dynamics," 2017 Sixth AIEAA Conference, June 15-16, Piacenza, Italy 261256, Italian Association of Agricultural and Applied Economics (AIEAA).
    15. James Rude, 2008. "Production Effects of the European Union's Single Farm Payment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 457-471, December.
    16. Loizou, Efstratios & Karelakis, Christos & Galanopoulos, Konstantinos & Mattas, Konstadinos, 2019. "The role of agriculture as a development tool for a regional economy," Agricultural Systems, Elsevier, vol. 173(C), pages 482-490.
    17. Gohin, Alexandre & Bureau, Jean-Christophe, 2006. "Bridging Micro- and Macro-Analyses of the EU Sugar Program: Methods and Insights," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25799, International Association of Agricultural Economists.
    18. Gohin, Alexandre, 2006. "Assessing the 2003 CAP Reform: Sensitivity to the Decoupling of Agenda 2000 Direct Payments," Working Papers 18868, TRADEAG - Agricultural Trade Agreements.
    19. Štefan Bojnec & Imre Fertő, 2008. "European Enlargement and Agro‐Food Trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 563-579, December.

    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. Monika Verma & Thomas W. Hertel & Ernesto Valenzuela, 2011. "Are The Poverty Effects of Trade Policies Invisible?," The World Bank Economic Review, World Bank, vol. 25(2), pages 190-211, May.
    2. Valenzuela, Ernesto & Hertel, Thomas W., 2006. "Poverty Vulnerability and Trade Policy: Are the Likely Impacts Discernable?," 2006 Annual meeting, July 23-26, Long Beach, CA 21397, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    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:hal:journl:hal-01931641. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.