Turkey’s accession to the EU: what will the Common Agricultural Policy cost?

At the EU Council in December 2004, European heads of governments decided to start EU accession negotiations with Turkey in October 2005. Various recent analyses assess the cost of applying the Common Agricultural Policy of the EU (CAP) to Turkey; most of them without taking into account the specific structure of the agricultural sector in Turkey, which would determine the receipts from EU funds. This paper assesses potential budgetary effects resulting from the application of the CAP to Turkey. The analysis is based on macroeconomic projections, equilibrium modelling of the Turkish agricultural sector, and projections of the future development of the CAP. It is found that total EU budgetary outlays for the application of the CAP to Turkey could total about € 3.5 billion in 2015 and rise to € 5.4 billion in 2025 due to full phasing in of direct payments and rural development policies. The resulting net transfer under the CAP to Turkey would be about € 1.7 billion in 2015 and could increase to € 2.9 billion in 2025. Such sums take a backseat to projected transfers under the structural policy of the EU and the overall political project of including Turkey in the EU.Turkey, EU accession, CAP, budgetary effects, Agricultural and Food Policy,

Turkey's Accession to the EU: What Will the Common Agricultural Policy Cost?

At the EU Council in December 2004, European heads of governments will decide on a potential date for the start of EU accession negotiations with Turkey. Various recent analyses assess the cost of applying the Common Agricultural Policy of the EU (CAP) to Turkey without taking into account the specific structure of the agricultural sector in Turkey, which would determine the receipts from EU funds. This paper assesses potential budgetary effects resulting from the application of the CAP to Turkey, if Turkey should accede in 2014. The analysis is based on macroeconomic projections from the literature, equilibrium modelling of the Turkish agricultural sector, and projections of the future development of the CAP. It is found that total EU budgetary outlays for the application of the CAP to Turkey could total about €3.3 billion in 2014 and rise to €5 billion in 2024 due to full phasing in of direct payments and rural development policies. The resulting net transfer under the CAP to Turkey would be about €1.6 billion in 2014 and could increase to €2.6 billion in 2024. Such sums take a backseat to projected transfers under the structural policy of the EU and the overall political project of including Turkey in the EU. Key Words: Turkey, EU accession, CAP, budgetary effects Im Dezember 2004 wird der Europäische Rat über die Festlegung eines Zeitpunkts zur Aufnahme von Beitrittsverhandlungen mit der Türkei entscheiden. Die Diskussion über die aus der Gemeinsamen Agrarpolitik der EU (GAP) resultierenden Budgetwirkungen eines EUBeitritts basiert bisher meist auf Schatzungen, die die spezifische Struktur des turkischen Agrarsektors sowie zukunftige Anderungen der GAP bis zu einem Beitritt der Turkei kaum einbeziehen. In diesem Beitrag werden die aus der GAP resultierenden Budgetwirkungen eines potentiellen EU-Beitritts der Türkei im Jahr 2014 auf Grundlage der Literatur entnommener makrookonomischer Projektionen, Abschatzungen zukunftiger Anderungen der GAP sowie einem Gleichgewichtsmodell des turkischen Agrarsektors analysiert. Im Ergebnis ergeben sich EU-Zahlungen an die Türkei im Rahmen der GAP von insgesamt 3,3 Mrd. im Jahr 2014, die nach einer schrittweisen Einfuhrung des vollen Umfangs der GAP im Jahre 2024 etwa 5 Mrd. betragen. Der sich aus der GAP potentiell ergebende Netto-Transfer aus dem EU-Budget an die Türkei betragt 1,6 Mrd. im Jahr 2014 und steigt bis 2024 auf etwa 2,6 Mrd. an. Im Verhaltnis zu den sich voraussichtlich aus der europaischen Strukturpolitik ergebenden Transfers und dem politischen Gesamtvorhaben einer Integration der Turkei sind diese Summen eher unbedeutend. Schlusselworter: Turkei, EU-Beitritt, Gemeinsame Agrarpolitik, budgetwirkungenTurkey, EU accession, CAP, budgetary effects, Agricultural and Food Policy,

Climate Change and Agriculture in 2050: Assessing Prospects for European Cereal and Oilseed Markets

Replaced with revised version of paper 07/20/10.Food Consumption/Nutrition/Food Safety,

No cause for concern? Climate Change impacts on European Oilseed and Cereal markets in 2050

Crop Production/Industries, Food Consumption/Nutrition/Food Safety,

EFFECTS OF A POTENTIAL NEW BIOFUEL DIRECTIVE ON EU LAND USE AND AGRICULTURAL MARKETS

In its Progress Report on Biofuels the European Commission proposes a more restrictive biofuel directive which sets a mandatory minimum share of biofuels in total fuel consumption in the transport sector of 10% per Member State by 2020. This is likely to have a strong impact on demand for biofuel inputs such as plant oils, cereals and sugar beet. To analyze the effects of this proposal on land use and agricultural markets, an extended version of the partial equilibrium model ESIM of the European agricultural sector is developed and applied which covers the production of and demand for biofuels. Two policy scenarios are simulated for the projection horizon until 2020: a baseline under which the share of biofuels in total transport fuels increases to 6.9% by 2020, and a scenario with a more demanding biofuel directive resulting in a 10% share. Results show that a substantial part of the policy-induced demand for biofuels is covered by imports of biofuels and biofuel inputs. Especially after the implementation of a potential Doha agreement, EU production of bioethanol strongly decreases, while almost all bioethanol demand is covered by imports.Biofuels, EU Biofuels Directive, agricultural markets, partial equilibrium modeling, Land Economics/Use, Resource /Energy Economics and Policy,

How effective is the EU Entry Price System for Fresh Fruits and Vegetables?

The EU protects EU growers of 15 kinds of fresh fruits and vegetables against international competition not only by the means of ad valorem tariffs of up to 20%, but also by the EU entry-price system (EPS), which is designed to restrict imports below the product-specific, politically designated entry price level. This study investigates the influence of the EPS on import prices of fruits and vegetables per product and country of origin. We utilise a unique data set comprising about 60,000 observations of daily synthetic import prices. We develop two indicators for the effectiveness of the EPS, which serve as variables in a cluster analysis identifying four classes differing in the relevance of the EPS. Results suggest that the relevance of the EPS is heterogeneous among products as well as countries of origin for most fruits and vegetables. Thus, an adequate assessment of the importance of the EPS requires not only a product-specific but also a country-specific analysis. Overall, our results indicate that the effectiveness of the EPS is highest for the import of artichokes, courgettes, cucumbers, lemons, plums and tomatoes. The influence of the EPS on apples, clementines and pears is significantly lower, and of least relevance for EU imports of apricots, mandarins, oranges, peaches and nectarines and table grapes. The EPS has the greatest effect on countries which neighbour the EU, whereas it is of minor importance for exports from far-away countries with the exception of China and South Africa.threshold cointegration, spatial price transmission, vector error correction model, Agricultural and Food Policy, Demand and Price Analysis,

Trade reform, migration, and a Chinese village economy

Replaced with revised version of paper 09/27/11.International Relations/Trade, Labor and Human Capital,

The EU's Import Regime for Oranges - Much Ado about Nothing?

EU imports of oranges are restricted not only by ad valorem tariffs but also by the entry price system establishing a minimum import price. In addition, the EU applies a comprehensive system of trade preferences. The hypothesis of this paper is that, in contrast to its complexity, the effectiveness of the EU import system for oranges is low with respect to its goals, i.e. protecting EU producers on the one hand an d creating imports from preference receiving countries on the other. The comparison of import prices for oranges from extra-EU countries with the EU entry price shows that the former are about 40% higher than the latter on average. Also, it is pointed out that at least 72% of extra-EU orange imports during the EU harvest season en ter the EU tariff free. As a conclusion, the contribution of the import regime to the protection of EU producers is low. Concordantly, the preferential entry price is not utilized by orange preference receiving countries. Besides, although orange quotas increased from 1991 to 2003, actual exports from Mediterranean countries and thus quota filling rates have decreased o ver the same period. It is shown that EU trade preferences for oranges were not decisive for the development of Mediterranean countries' orange exports to the EU. In the light of the low effectiveness of the entry price system for oranges along with high transaction costs involved, its abolishment should be co nsidered. Yet, results cannot be generalized, even not for citrus fruit, as is demonstrated for mandarins.trade preferences, oranges, tariff rate quota, entry price, International Relations/Trade, F13, Q13, Q17, Q18,

The adoption of the Eurepgap Standard by Mango Exporters in Piura, Peru

The significance of standards in international agricultural trade is continuously rising. Due to their complexity, especially private industry standards are often expected to have a negative impact on agricultural export sectors in developing countries. The successful adoption of standards by a broad number of producers can be seen as a condition to limit negative socioeconomic consequences. This case study for the mango export sector in Piura, Peru, analyzes the adoption of the Eurepgap standard, based on a theoretical framework of a compliance process of three stages (information stage, decision stage, implementation stage). The empirical part is based on interviews with farmers. A comparison between certified producers and a control group identifies the mechanisms that lead to an adoption of the standard. A first major barrier to adoption is the access to information on the standard. Exporting enterprises are the most important source of information. Analysis at the decision stage shows that vertical integration is the most important factor in the adoption of the standard. A contemplation of the implementation stage shows that the costs of compliance are at 9.51 US$/ton on average or 3.8% of the product price. Factors that influence the costs of compliance are the starting point, the target level and the involvement of exporter enterprises. Consequently, the activities of exporter enterprises can be identified as the key factor for the adoption of the standard in the sector. Furthermore, the standard involves the risk of exclusion of certain producer groups.standards, costs of compliance, Eurepgap, developing countries, international, trade, mango, Peru, International Relations/Trade, F13, Q13, Q17, Q18,

How effective is the EU's import regime for oranges?

EU imports of oranges are restricted not only by ad valorem tariffs but also by the entry price system establishing a minimum import price. In addition, the EU applies a comprehensive system of trade preferences. The hypothesis of this paper is that, in contrast to its complexity, the effectiveness of the EU import system for oranges is low with respect to its goals, i.e. protecting EU producers and creating imports from preference receiving countries. The comparison of import prices for oranges from extra-EU countries with the EU entry price shows that the former are about 40% higher than the latter on average. Also, it is pointed out that at least 72% of extra-EU orange imports during the EU harvest season enter the EU tariff free. As a conclusion, the contribution of the import regime to the protection of EU producers is low. Concordantly, the preferential entry price is not utilized by orange preference receiving countries. Besides, although orange quotas increased from 1991 to 2003, actual exports from Mediterranean countries and thus quota filling rates have decreased over the same period. It is shown that EU trade preferences for oranges were not decisive for the development of Mediterranean countries' orange exports to the EU. In the light of the low effectiveness of the entry price system for oranges along with high transaction costs involved, its abolishment should be considered. Yet, results cannot be generalized, even not for citrus fruit, as is demonstrated for mandarins.trade preferences, oranges, tariff rate quota, entry price, International Relations/Trade,