EU sugar policy: A sweet transition after 2015 ?
Alison Burrell (),
Benjamin Van Doorslaer,
Pavel Ciaian and
Shailesh Shrestha ()
No JRC76619, JRC Working Papers from Joint Research Centre (Seville site)
This report compares the production and market outcomes of two alternative policy scenarios, namely expiry of EU sugar quotas in 2015/16 and extension of the current sugar quota scheme. All other EU policy measures pertaining to the sugar sector, and to agriculture more generally, are assumed the same in both scenarios. The year of comparison is 2020. The CAPRI model was used for the simulations. The report begins with a description of sugar production within the EU, and outlines the policies applied in the sugar sector within the EUs Common Agricultural policy. This is followed by a description of the EU sugar market. A theoretical model is used to summarise the main functional relationships in the EU sugar market and related markets, and the EUs trade in sugar, from which a number of theory-based predictions about the impacts of quota expiry are derived. Isoglucose quotas will expire along with sugar quotas, and there is much speculation about the extent of potential competitive substitution between the two sweeteners. Sensitivity analysis was performed to obtain greater insight into this issue. Two additional quota-expiry scenarios were run, in which isoglucose was assumed to take a 10% and a 20% share of the sweetener market at the expense of sugar. The main findings are: production of sugar beet and white sugar increases by around 4%; there is little net impact on the production of cereals; total ethanol production hardly changes, but the importance of sugar as an ethanol feedstock declines by a few percentage points; raw sugar imports from high-cost third countries decline very substantially, but those from the low-cost producer Brazil decrease only slightly; EU sugar exports fall; EU human consumption of sugar increases only marginally, despite a fall of 15-16% in beet prices for sugar for internal human consumption; there is a very small positive welfare change, although income accruing to sugar beet producers falls by over 17%.
Keywords: Economic analysis; impact assessment; Common Agricultural Policy; sugar quota; agricultural trade; competitiveness (search for similar items in EconPapers)
JEL-codes: F14 Q02 Q11 Q18 (search for similar items in EconPapers)
Pages: 47 pages
New Economics Papers: this item is included in nep-agr, nep-cmp and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:iptwpa:jrc76619
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