The Estimated Economic Impact of Alternative Levels of Harmonized Farm Commodity Price Supports in the European Community

James Gleckler and Luther Tweeten

No 233049, Occasional Papers from Regional Research Project NC-194: Organization and Performance of World Food Systems

Abstract: The so-called "Europe 1992" plan will attempt to harmonize standards and regulations and eliminate nontariff barriers which continue to restrain trade among EC countries. According to results from the world trade model used in this study, American agriculture has up to a $6 billion stake in seeing that EC farm price supports are set at the low rather than at the high end of prices in individual countries of the EC. If all EC prices are supported at the low U.K. level, U.S. wheat exports are projected to increase 528,000 tons, pork exports 413,000 tons, and beef exports 238,000 tons. U.S. cheese production is estimated to expand 5 percent, pork production 4 percent, and beef production 1 percent if prices are harmonized at the relatively low levels of the U.K. If prices are harmonized at the high levels of Italy, the U.S. is predicted to be considerably worse off. The big gainer from harmonization of EC prices at a lower common denominator is the EC itself. To be sure, EC producers are worse off. But gains to consumers and taxpayers more than offset producer loss. World welfare gain from harmonization at the U.K. level is $6,853 million.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 26
Date: 1990-05
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nc194o:233049

DOI: 10.22004/ag.econ.233049

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