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How Distorted Have Agricultural Incentives Become in EuropeÂ’s Transition Economies?

Kym Anderson () and Johan Frans Maria Swinnen ()

No 2009-03, Centre for International Economic Studies Working Papers from University of Adelaide, Centre for International Economic Studies

Abstract: Over the past two decades, earnings from farming in the former communist countries of Eastern Europe and Central Asia have been altered hugely by government sectoral and trade policy reforms. This paper summarizes evidence on the changing extent of distortions to markets for farm products since the transition away from planned prices began. In particular, it examines the extent to which, following the initial shocks, there has been a gradual improvement in farmer incentives. This new evidence is not inconsistent with that past pattern of earlier-developing countries, but the speed of assistance increase is relatively rapid and is linked with actual or desired accession to the European Union. The final section focuses on future prospects, and in particular on what might be done to avoid agricultural protection levels becoming excessive.

Keywords: Distorted farmer and consumer incentives; agricultural price and trade policy reforms; agricultural development; European transition economies (search for similar items in EconPapers)
JEL-codes: F13 F14 Q17 Q18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-tra
Date: 2009-12
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