THE REAL RATE OF PROTECTION: THE STABILIZING EFFECT OF PRICE POLICIES AND DIRECT PAYMENTS

Stanley Thompson () and P. Michael Schmitz

No 20503, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Traditional indicators of protection refer to the level effect of price policies on income and ignore the stabilizing effect. We derive a measure of the real rate of protection which incorporates these dual dimensions. The income stabilizing effects of price policy protection lead to a greater level of real protection than would be measured conventionally. Computed real protection rates for the European Union wheat market over the pre- and post-MacSharry reform periods were found to be some 3-5 percent greater than traditional indicators. Moreover, the compensatory payments to farmers following the 1992 reforms had a major risk reducing impact.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 15
Date: 2001
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20503

DOI: 10.22004/ag.econ.20503

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