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The international repercussions of EC agricultural policy

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Intereconomics

Abstract

The importance of the EC in international agricultural markets has grown steadily since the establishment of the Community and will receive another boost following its southward enlargement. Nevertheless, agricultural policy has been inward-looking and has paid, little heed to the external effects it engenders. Prof. Schmitz shows that EC agricultural policy has tended to depress world market prices, has increased their volatility and artificially distorted the price structure in the world market.

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References

  1. In this regard, see I. Kiechle:…und grün bleibt unsere Zukunft, Stuttgart and Herford 1985, pp. 254 ff.

  2. W. von Urff, E. Weinmüller: Außenwirtschaftliche Aspekte der EG—Agrarpolitik, in: H. Priebe, W. Scheper, W. von Urff: Agrarpolitik in der EG—Probleme und Perspektiven, Baden-Baden 1984, pp. 125 ff.

  3. Ibid. W. von Urff, E. Weinmüller: Außenwirtschaftliche Aspekte der EG—Agrarpolitik, in: H. Priebe, W. Scheper, W. von Urff: Agrarpolitik in der EG—Probleme und Perspektiven, Baden-Baden 1984, pp. 129.

  4. Cf. A. Valdés, J. Zietz: Agricultural Protection in OECD Countries: Its Cost to Less-Developed Countries, Research Report 21, International Food Policy Research Institute, Washington 1980, p. 46; T. E. Josling: Developed-Country Agricultural Policies and Developing-Country Supplies: The Case of Wheat, Research Report 14, International Food Policy Research Institute, Washington 1980, pp. 25f.; S. Tangermann, W. Krostitz: Protectionism in the Livestock Sector with particular Reference to the international Beef Trade, in: Göttinger Schriften zur Agrarökonomie, No. 53, Göttingen 1982, pp. 19 ff.; U. Koester: Policy Options for the Grain Economy of the European Community: Implications for Developing Countries, Research Report 35, International Food Policy Research Institute, Washington 1982, pp. 27 ff.; U. Koester, P. M. Schmitz: The EC Sugar Market Policy and Developing Countries, in: European Review of Agricultural Economics, Vol. 9 (1982), pp. 185 ff.

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  5. U. Koester op. cit., p. 28; U. Koester, P. M. Schmitz, op. cit. The EC Sugar Market Policy and Developing Countries, in: European Review of Agricultural Economics, Vol. 9 (1982), p. 190.

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  6. See also U. Koester: Internationale Aspekte der EG-Agrarpolitik, in: Agrarwirtschaft, Vol. 33 (1984), p. 237.

  7. Examples for the beef market are to be found in P. M. Schmitz: Instability Effects of Non-Tariff Trade Barriers on World Beef Markets, in: Quarterly Journal of International Agriculture, Vol. 23 (1984), No. 2, pp: 119 ff.

  8. Cf. D. M. G. Newbery, J. E. Stiglitz: The Theory of Commodity Price Stabilization—A Study in the Economics of Risk, Oxford 1981, p. 274.

  9. Regarding the steps towards these conclusions and their impact, see P. M. Schmitz: Handelsbeschränkungen und Instabilität auf Weltagrarmärkten (Weltwirtschaftliche Studien des Instituts für Europäische Wirtschaftspolitik der Universität Hamburg, No. 21), Göttingen 1984, pp. 29–81; cf. also M. D. Bale, E. Lutz: The Effects of Trade Interventions on International Price Instability, in: American Journal of Agricultural Economics, Vol. 61 (1979), No. 3, pp. 512–516; S. J. Turnovsky: The Distribution of Welfare Gains from Price Stabilization: A Survey of some Theoretical Issues, in: F. G. Adams, S. A. Klein (eds.): Stabilizing World Commodity Markets, Toronto 1978, pp. 126 ff.

  10. P. M. Schmitz, U. Koester: The Sugar Market Policy of the European Community and the Stability of World Market Prices for Sugar, in: A. H. Sarris, A. Schmitz, G. G. Storey (eds.): International Agricultural Trade—Advanced Readings in Price Formation, Market Structure and Price Instability, Boulder 1984, pp. 243–259, and P. M. Schmitz: The Common Agricultural Policy and Instability on World Food Markets, in: K. J. Thomson, R. M. Warren (eds.): Price and Market Policies in European Agriculture, Proceedings of the 6th Symposium of the European Association of Agricultural Economists, 14–16th September 1983, Newcastle upon Tyne 1984, pp. 323–331.

  11. Cf. U. Koester: Policy Options… op. cit., p. 53 ff.

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  12. Cf. P. M. Schmitz: Handelsbeschränkungen … op. cit. und Instabilität auf Weltagrarmärkten (Weltwirtschaftliche Studien des Instituts für Europäische Wirtschaftspolitik der Universität Hamburg, No. 21), Göttingen 1984, pp. 125.

  13. On the significance of the so-called risk benefits, cf. ibid. Cf. P. M. Schmitz: Handelsbeschränkungen… op. cit. und Instabilität auf Weltagrarmärkten (Weltwirtschaftliche Studien des Instituts für Europäische Wirtschaftspolitik der Universität Hamburg, No. 21), Göttingen 1984, pp. 130 ff.

  14. Cf. U. Koester, P. M. Schmitz: The EC Sugar Market Policy … op. cit. The Sugar Market Policy of the European Community and the Stability of World Market Prices for Sugar, in: A. H. Sarris, A. Schmitz, G. G. Storey (eds.): International Agricultural Trade—Advanced Readings in Price Formation, Market Structure and Price Instability, Boulder 1984, p. 199; and P. M. Schmitz: European Community Trade Preferencès for Sugar and Beef, in: Deutsche Forschungsgemeinschaft and Institut für wissenschaftliche Zusammenarbeit mit Entwicklungsländern (eds.): Recent German Research in International Economics—Special Research Program 86, Hamburg/Kiel, Chairman: H. Giersch, Bonn and Tübingen 1984, pp. 108 ff.

  15. see ibid. Cf. U. Koester, P. M. Schmitz: The EC Sugar Market Policy … op. cit. The Sugar Market Policy of the European Community and the Stability of World Market Prices for Sugar, in: A. H. Sarris, A. Schmitz, G. G. Storey (eds.): International Agricultural Trade—Advanced Readings in Price Formation, Market Structure and Price Instability, Boulder 1984, p. 199; and P. M. Schmitz: European Community Trade Preferencès for Sugar and Beef, in: Deutsche Forschungsgemeinschaft and Institut für wissenschaftliche Zusammenarbeit mit Entwicklungsländern (eds.): Recent German Research in International Economics—Special Research Program 86, Hamburg/Kiel, Chairman: H. Giersch, Bonn and Tübingen 1984, pp. 108 ff.

  16. A detailed treatment of the model is to be found in R. Herrmann, P. M. Schmitz: Stabilizing Producers’ Revenue by fixing Agricultural Prices within the EC? in: European Review of Agricultural Economics, Vol. 11 (1984), No. 4, pp. 395–414.

  17. For an assessment of guarantee thresholds, see S. Tangermann: Guarantee Thresholds: A Device for Solving the CAP Surplus Problems?, in: European Review of Agricultural Economics, Vol. 11 (1984), No. 2, pp. 159–168.

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  1. Justus Liebig University, Giessen

    Peter Michael Schmitz

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  1. Peter Michael Schmitz
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Schmitz, P.M. The international repercussions of EC agricultural policy. Intereconomics 20, 261–267 (1985). https://doi.org/10.1007/BF02925466

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