ASSESSING THE EFFECTS OF THE REFORM OF THE EU RICE COMMON MARKET ORGANISATION

Abstract

The paper is aimed at assessing the effects of the reform of the Common Market Organisation for rice proposed by the EU Commission in 2000. AGLINK, the OECD partial model, is employed to simulate the effects for the EU as a whole, both in terms of deviations from the standard baseline, and from a modified baseline that includes indica and japonica rice as two different products. Results in terms of change in market prices are introduced as exogenous price shocks in a Positive Mathematical Programming Model, run for Italian rice-producing provinces on the basis of the Farm Accounting Data Network data, in order to assess the effects on local supply. Results indicate a fall in EU rice prices ranging from 15% to 25% as a consequence of the proposed reform, under the assumption that this implies a reduction in the level of border protection. A similar percentage change would occur in Italian production as a whole, though supply reductions would be lower in more specialised rice-growing areas.Industrial Organization,