EU Agricultural Domestic Support in Global Value Chains or Where Does the Money Go?

Dorothee Flaig and Kirsten Boysen-Urban

No 333054, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Domestic support to agriculture constitutes an important part of European Union (EU) policies. With trade and especially in the framework of global value chains (GVCs) the question arises as to what extend each part of the value chain benefits from a subsidy. We track subsidy flows by combining techniques of value added decomposition originating from GVC analysis with detailed agricultural domestic support data for the EU. This allows us not only to track subsidy flows inside the EU, but also those that are incorporated in exports to the rest of the world. EU domestic support is often blamed to hurt African farmers. To get an idea on the importance of this argument from the demand side, we analyse the contribution of European agricultural domestic support for final demand in African countries. Results show that EU subsidies are “traded” substantially within the EU, but an unneglectable share is also captured by non-EU countries.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333054

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