Regional redistributive effects of common price support policies

S. Tarditi and Elisabetta Croci Angelini

European Review of Agricultural Economics, 1982, vol. 9, issue 3, 255-270

Abstract: The policy of price support sustained by import levies and export subsidies leads to a transfer of income from consumers to agricultural producers. This intersectoral transfer has a regional impact insofar as the amounts going to consumers and producers vary from region to region. As a result, income flows are created which pass from regions which are net consumers, to those which are net producers. Graphs are used to show the redistriburive effects arising from price support on regions within a customs union, taking possible effects on world market prices into account. A way of estimating interregional income transfers is proposed which seems to reflect the impact of the policy instruments used by CAP more realistically than under the ‘small country assumption’. Finally, an example is presented of the estimation of income redistribution between regions in Italy as a result of the olive oil price support.

Date: 1982
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