REVIEWS

Book reviews in this article: KJELDAHL, R. and TRACY, M. (eds.) (1994). Renationalisation of the Common Agricultural Policy? Copenhagen TRACY, M. (ed.) (1994). East-West European Agricultural Trade: The Impact of Association Agreements. La Hutte (Genappe) MARCHANT, M. A. (1993). Political Economic Analysis of US Dairy Policies and European Community Dairy Policy Comparisons O'DONNELL, C. (1993). Commodity Price Stabilisation: An Empirical Analysis PHIMISTER, E. (1993). Savings and Investment in Farm Households: Analysis Using Life Cycle TIFFEN, M., MORTIMORE, M. AND GICHUKI, F. (1994). More People, Less Erosion. Environmental Recovery in Kenya POATE, C.D. and DAPLYN, P. F. (1993). Data for Agrarian Development. Wye Studies in Agricultural and Rural Development RUTTAN, V. W. (ed.) (1993). Why Food Aid? VAN ATTA, D. (ed.) (1993). The “Farmer Threat”: The Political Economy of Agrarian Reform in Post-Soviet Russia     

E.E.C. FISHERIES POLICY

This paper looks at the special characteristics of the fishing industry which distinguish it from the rest of the ‘agricultural’ sector and which have made its organisation at E.E.C. level both politically and economically difficult. It examines the reasons for the moves behind the creation of a common fisheries policy, the difficulties which the Community of nine (and subsequently ten) countries had in adapting to rules worked out previously by the Six, the subsequent protracted negotiations and the eventual achievement of the new policy which was agreed in January, 1983. The details of the new Common Fisheries Policy are then outlined with possible future problems in the implementation of the policy as well as the opportunities it provides described by way of conclusion.     

Regional Growth and Policies in the European Union: Does the Common Agricultural Policy Have a Counter-Treatment Effect?

This article investigates the impact of both the Common Agricultural Policy and structural policies on European regions by estimating a conditional growth convergence model. The Common Agricultural Policy influences the convergence process by affecting regional aggregate productivity, eventually conflicting with the structural policies designed to promote growth in lagging regions. The conditional convergence model is specified in a dynamic panel data form and applied to 206 regions observed from 1989 to 2000. A GMM estimation is applied in order to obtain consistent estimates of both the convergence parameter β and the impact of the conditioning variables, policy measures in particular.     

REBALANCING EC CEREALS PROTECTION AND THE GATT URUGUAY ROUND

This paper considers the proposals put forward by the EC at the GATT Uruguay Round in December 1990. The EC's objective of rebalancing the Common Agricultural Policy in the context of a partial liberalisation of agricultural support on the world cereals market is assessed, as is the choice of base year from which liberalisation would have been initiated. The US's proposal for more significant reduction in agricultural support is also considered. The results show that the EC would not necessarily have benefited from rebalancing, since the effects would have depended on the choice of base period. For example, with 1986 (1988) as the base year, net welfare changes would have been 20 (50) percent higher (lower) with rebalancing, relative to the case without. Not surprisingly, the more substantial liberalisation proposed by the US would have resulted in greater net welfare gains even if rebalancing was conceded by the US.     

REVIEWS

Book reviewed in this article: Investment Projects in Agriculture. By McDONALD P. BENJAMIN. Longman Group, Harlow. A Rural Policy for fhe EEC? By HUGH CLOUT. Methuen A Theory of Adaptive Economic Behaviour. By JOHN G. CROSS Agriculture and Economic Development. By SUBRATAG HATAK and KEN INGERSENT. Rural Land Uses and Planning: A Comparative Study of the Netherlands and the United Stales. By R. BURNELLH ELDa nd DIRK W. VISSER. An Introduction to Agricultural Geography. By DAVID GRIGG. Rural Britain: A Social Geography. By DAVIDP HILLIPS and ALLAN WILLIABM. The Common Agricultural Policy; Past, Present and Future. By BRIAN E. HILL. Economics of African Agriculture. By JOHNL EVI and MICHAELH AVINDEN Beef in Japan: Politics, Production, Marketing and Trade. By JOHN W. LONGWORTH Issues in Third World Development. Edited by KENNETH C. NOBE and RAJAN K. SAMPATH Agricultural Trade with Developing Countries International Finance for Food Security. By BARBARAH UDDLESTOND,. GALE JOHNSONS, HLOMOR EUTLINGER and ALBERTOV ALDES Agriculture: Foundations, Principles and Development. By J. R. RAEBURN Protecting Farmlands. Edited by FREDERICRK. STEINER and JOHN E. THEILAC Price and Market Policies in European Agriculture. Edited by K. J. THOMSON and R. M. WARREN Selected Writings on Agricultural Policy and Economic Analysis. By FREDERICVK. WAUCH. Edited by JAMES P. HOUCK and MARTIN E. ABEL The Common Fisheries Policy of the European Community. By MARK WISE     

Structural Breaks and the Relationship between Barley and Wheat Futures Prices on the London International Financial Futures Exchange

Co-movement between futures prices can arise when commodities are substitutes. Counterintuitively, Dawson and White fail to find a significant long-run link between feed barley and wheat prices on the London International Financial Futures Exchange. This relationship is re-examined using  Johansen, Mosconi, and Nielsen's co-integration procedure that permits structural breaks. Results show evidence of co-integration and hence price discovery. There is a significant break in October 2000 following Common Agricultural Policy intervention price reductions, the barley–wheat futures market is perfectly integrated, and the barley price Granger-causes the wheat price. Modeling structural breaks in price relationships appears important.     

REVIEWS

Book reviewed in this article: The Changin Countryside. Edited by JOHN BLUNDEN and NIGEL CURRY. The Countryside Handbook, Edited by ALAN ROGERS, JOHN BLUNDEN and NIGEL CURRY Agriculture and Environment: The Physical Geography of Temperate Agricultural System. By DAVID BRIGGS and FRANK CURTUNY Rural Resource Management. BY PAUL J. CLOKE and CHRIS C. PARK The Food Manufacturing Industries: Structure, Strategies, Performance and Policies. By JOHN M. CONNORR Simulation and Systems Analysis in A riculture. By CSABAC SAKIE Agricultural Credit: A Global. Enima. By JACK D. HARTMAN Undermining Rural Development with Cheap Credit. Edited by DALE W. ADAMS, DOUGLAS H. GRAHAM AND J. D. VON PISCHKEB Fertiliscrs in LIK Forming. By J. L. JOLLANS. Centre for Agricultural Strategy Agricultural Policies and World Markets. By ALEX F. MCCALLA and TIMOTHY E. JOSLINC The Common Agricultural Policy and the Less Developed Countries. By ALAN MATTHEWSG New Directions in Econometric Modelling and Forecastin in US Agriculture. Edited by GORDON C. RAUSSERN Indigenous Agricultural Revolution: Ecology and Food Production in West Africa. By PAUL RICHARDS Research in Rural Sociology and Development. Volume I: Focus on Agriculrure. Edited by HARRY K. SCHWARZWELLER Law of the Common Agricultural Policy. By FRANCIS G. SNYDER.     

THE EEC SHEEPMEAT MARKET AND VOLUNTARY EXPORT RESTRAINT AGREEMENTS

Voluntary export restraint agreements are an increasingly common measure used to restrict international trade in particular commodities. They have been applied to the EEC sheepmeat market since 1980 as part of the Common Agricultural Policy. In this paper, theoretical implications of voluntary export restraints are analysed and compared with alternative trade barriers, such as variable levies. The effects of the various trade barriers which the EEC could impose on sheepmeat imports are quantified using an econometric model of the world sheepmeat market. From the exporters' viewpoint, voluntary export restraints are shown to be the least harmful form of providing protection against imports into the EEC.     

A multicriteria model for the assessment of rural development plans in Greece

In the last decades rural communities face the problems of ageing of population, high share of elder farmers and imbalanced distribution of farmers across age classes. The Rural Development Plans (RDPs) of Common Agricultural Policy (CAP) in European Union (EU) are the policy instruments that affect agriculture and the people living in rural areas. The RDP measure “Setting up Young Farmers” aims to fight the demographic problems of these areas. This study is an attempt to highlight the role and the impacts of RDPs and especially of the “Setting up Young Farmers” measure in the prefecture of Thessaloniki in Greece. To this end, a multicriteria mathematical programming model was implemented. This methodology was chosen using the Knowledge Brokerage Approach in the context of the LIAISE project, which proposes a set of support modules that are linked to the impact assessment process with a final goal to support future policies and design. The results showed that the “Setting up young farmers” measure achieved its goals to transfer land to young, trained farmers, to offset the set-up costs faced by young people when establishing themselves in farming.     

REVIEWS*

Book reviewed in this article: BOTOS, E. P. (ed.) (1991). Vine and Wine Economy: Proceedings of the International Symposium held at Kecskemet CAIRNCROSS, F. (1991). Costing the Earth. London: Business Books and Economist Books CLAY, E. and STOKKE, O. (eds.) (1991). Food Aid Reconsidered: Assessing the Impact on Third World Countries GILG, A. W. (1991). Countryside Planning Policies for the 1990s. Wallingford: CAB International HANLEY, N. (ed.) (1991). Farming and the Countryside - An Economic Analysis of External Costs and Benefits HENDRIKS, G. (1991). Germany and European Integration; The Common Agricultural Policy - An Area of Conflict MIDMORE, P. (ed.) (1991). Input-Output Models in the Agricultural Sector RITSON, C. and HARVEY, D. (eds.) (1991). The Common Agricultural Policy and the World Economy: Essays in Honour of John Ashton WILLIAMS, J. C. and WRIGHT, B. D. (1991). Storage and Commodity Markets DAVIS, J. (1991). The Competitiveness of the Northern Ireland Dairy Sector: An Analysis of Industry Structure and Performance HEIJMAN, W. J. M. and KRABBE, J. J. (eds.) (1992). Issues of Environmental Economic Policy HODGE, I. and MONK, S. (1991). Targeting Rural Areas for Special Assistance: The RDAs and Alternative Approaches HOLDEN, D., HAZELL, P. and PRITCHARD, A. (eds.) (1991). Risk in Agriculture: Proceedings of the Tenth Agriculture Sector Symposium MARSHALL, B. J. (ed.) (1992). Sustainable Livestock Farming into the 21st Century. CAS Paper 25. Reading: University of Reading, Centre for Agricultural Strategy OECD (1991). The Soviet Agro-Food System and Agricultural Trade: Prospects for Reform. Paris: Organisation for Economic Co-operation and Development OECD (1992). Agricultural Policies, Markets and Trade: Monitoring and Outlook 1992. Paris: Organisation for Economic Co-operation and Development     

Book Reviews

Book reviewed in this article:
Optimal Stockpiling of Grain by Bruce L. Gardner, Lexington Books, D.C. Heath and Company
The Common Agricultural Policy of (he European Community by Rosemary Fennell, Granada Publishing     

Reviews

Book reviewed in this article: Poverty and Progress: An Ecological Model of Economic Development. By R. G. WILKINSON Land Use and Water Resources. By H. C. PEREIRA Farm Management in Africa - the principles of production and planning. By MARTIN UPTON The Common Agricultural Policy and Britain. Edited by S. J. ROGERS and B. H. DAVEY. The Agricultural Adjustment Unit Agriculture and the Common Market. By STANLEY ANDREWS The Private Sector in Soviet Agriculture. By KARL-EUGEN WÄDEKIN (edited by George Karcz. Enlarged and revised edition of Privatproduzenten in der sowjetischen Landwirtschaft translated by Keith Bush) Productivity Trends in a Sectoral Macro-Economic Model - a study of American agriculture and supporting industries, 1919–1964. By W. F. GOSSLING Operations Research Methods for Agricultural Decisions. By R. C. AGRAWAL and E. O. HEADY Agricultural Projection Techniques. O.E.C.D. Soybeans and Their Products - markets, models and policy. By J. P. HOUCK, M. E. RYAN and A. SUBOTNIK The Classical Tradition in West European Farming. By G. E. FUSSELL, David & Charles British Agriculture, 1875–1914. Edited by P. J. PERRY. Methuen     

THE ECONOMIC IMPLICATIONS OF RISING FOOD PRICES: FRIEDMAN AND THE PRICE OF STEAKS

The rationale for anti-inflationary policies (at least in the UK) arises from a theory that higher rates of inflation lead to a greater variability in the dispersion of prices and market distortions. This is because economic agents do not fully anticipate what future rates of inflation will be. Little or no empirical work has been directed to the agricultual sector for this model. The economic implications of the prices of some varieties of beef steaks are considered by testing the model for UK data over the period 1968 to 1984. The effects of real earnings and the Common Agricultural Policy are also considered.     

Analysing behavioural differences of farm households: An example of income diversification strategies based on European farm survey data

Different forms of income diversification represent important strategies of farmers to either cope with the changing economic framework conditions or to valorise given territorial potentialities. Nevertheless, the decision to diversify economic activities on or off the farm will heavily depend on the agricultural business and household characteristics. Our study used a survey of 2154 farms from eleven European regions to identify distinct farm types in order to investigate differences regarding the willingness to diversify in the future. Two scenario situations with continuation (baseline) and without any market intervention (“No CAP”) were tested. A factor and cluster analysis depicted six farm types both previously described and novel. The typology proved validity across all case studies, whereas single types occurred more frequently under specific site conditions. The six farm types showed strong variations in the stated future diversification behaviour. Young farm households with organic production are most likely to diversify activities particularly on-farm, whereas farm types characterised by intensive livestock holding and also already diversified and part-time farm households are least likely to apply this strategy. Results have further shown that under hypothetical conditions of termination of economic support by the Common Agricultural Policy (CAP) an increasing share of farmers – throughout all types – would apply income diversification, mainly off-farm diversification, as a survival strategy.     

Economic development, institutional change, and the political economy of agricultural protection An econometric study of Belgium since the 19th century

This empirical study uses 100 years of annual data on 11 agricultural commodities from Belgium to measure the impact of structural changes coinciding with economic development and changes in political institutions on agricultural protection. The analysis shows that changes in agricultural protection are caused by a combination of factors. Governments have increased protection and support to farmers when world market prices for their commodities fell, and vice versa, offsetting market effects on producer incomes. Other economic determinants were the share of the commodities in total consumer expenditures (negative effect) and in total output of the economy (positive effect). With Belgium a small economy, there was no impact of the trade position. Changes in political institutions have affected agricultural protection. Democratic reforms which induced a significant shift in the political balance towards agricultural interests, such as the introduction of the one‐man‐one‐vote system, led to an increase in agricultural protection. The integration of Belgian agricultural policies in the Common Agricultural Policy in 1968 coincided with an increase in protection, ceteris paribus. Both institutional factors, related to changes in access to and information about the decision‐making at the EU level, and structural changes in the agricultural and food economy may explain this effect.     

The impact of decoupled subsidies on productivity in agriculture: a cross‐country analysis using microdata

The decoupling of direct payments from production introduced in the reform of the Common Agricultural Policy is expected to make production decisions more market‐oriented and farmers more productive. However, ex‐post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish, and Dutch farm‐level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and farm product adjustment behavior. We find some evidence that the decoupling policy had significant positive effects on farm productivity and behavioral changes related to farm specialization.     

Towards Agricultural Policy 3.0 – an agenda for agricultural research

This article reviews the development from market‐based support measures (‘Agricultural Policy 1.0’) towards direct and decoupled payments (‘Agricultural Policy 2.0’) which are increasingly justified by environmentally friendly practices (‘Agricultural Policy 2.1’) to which payments are bound. It describes frequent problems connected with today's agri‐environmental programmes, particularly non‐compliance and a too indirect link between practices paid for and environmental effects. Other programmes have started to pay farmers more directly for environmental outputs on their fields, such as the number of valuable plants on their grassland. Transaction costs for the administration and control of these programmes have been shown to remain at an acceptable level, so that such output‐related policies may be effective and promising options. It is suggested to direct the work of agricultural researchers, including economists, into looking for a stronger link between environmental outputs and public support, something that could be termed Agricultural Policy 3.0. This could lend some more visibility, relevance and attractiveness to our discipline .     

Agricultural and Economy‐Wide Effects of European Enlargement: Modelling the Common Agricultural Policy

The economic impact of extending the Common Agricultural Policy to the Central and Eastern European countries (CEEC) has become a major issue in the European enlargement debate. This paper provides an assessment of the economy‐wide effects of European enlargement using a global general equilibrium model where special attention is given to modelling the instruments of the Common Agricultural Policy, the Agenda 2000 proposal and the EU budget. The results indicate a substantial potential for increasing agricultural production in the CEEC. The EU budget will increase significantly and the transfers from EU taxpayers to farmers in the CEEC result in significant welfare gains in the new member countries. In spite of these important transfers the macroeconomic costs for the EU are found to be limited.     

Farmers and Consumers: Towards Symbiosis?

Public declarations on the Common Agricultural Policy (CAP) have recently become more consumer-oriented, aiming at "transparency and defence of consumer interests". Even demonstrations have changed: fewer occupations of railways, motorways, and airports, and more free distribution of grilled steaks, milk, and fruit to citizens.