A MODEL OF THE COMMON AGRICULTURAL POLICY

Several efforts have been made since 1980 to estimate the costs and benefits of the European Community's Common Agricultural Policy (CAP). This paper summarises the approach and method adopted in developing one such effort, which aims to provide results at country, commodity and interest group level both for the CAP as a whole, and for changes in it. Economic analysis of the effects of price changes in the CAP is carried out with the use of direct and crossprice elasticities of supply and demand for sixteen major commodities, using base levels of production, consumption, and gross trade flows in each member state, along with rest-of-world data. A number of CAP instruments, such as subsidies, levies, quotas and ‘green’ exchange rates, are built into the calculations and can be varied, along with support prices, to produce new situations in domestic markets and in world price levels. Both financial (budgetary) and welfare (economic surplus) effects of such exogenous price changes can be calculated. Certain policy changes, such as a move to ‘free’ markets, involve endogenous calculation of equilibrium prices. Trend projections subject to a priori constraints are used to produce results for years beyond the extent of data currently available. The types of model run commonly carried out are discussed, along with several strategic judgments that became necessary in carrying out the research. Finally, questions concerning the future development and use of the model are addressed.     

INPUT-OUTPUT FORECASTING OF REGIONAL AGRICULTURAL POLICY IMPACTS

Input-output coefficients and multipliers based upon them are increasingly being used to evaluate the impact of changes in agricultural policies, yet there are a number of specific difficulties with regard to their use in this context. This paper articulates various criticisms which can be made, and tests their validity by comparing multiplier forecasts with out-turns from a series of eight input-output tables describing the Welsh agricultural sector. The predictive performance deteriorates rapidly as the time between base matrix and forecast year increases; more attention needs to be paid to the forecasting of final demand, spill-over effects into other sectors, and the functional relationship between labour input and gross output.     

GUARANTEE THRESHOLDS AND THE COMMON AGRICULTURAL POLICY

In recent years an important development in the Common Agricultural Policy of the European Community has been the acceptance of the principle that the price guarantees can no longer be unlimited in nature, and that, if production exceeds a certain level, action should be taken to ensure that producers share in the responsibility for additional production. In 1981 the term ‘guarantee threshold’ was introduced to denote this level of production. Different mechanisms have been introduced in the various market regulations to give effect to the guarantee thresholds, and it is necessary for policy makers to realise that these mechanisms have different economic consequences. The case of milk is particularly instructive, for here the European Community in 1984 made a radical change by switching from the mechanism of reducing price support, if the guarantee threshold is exceeded, to a system of quotas for milk deliveries. Guarantee thresholds also exist for other products (cereals, processed fruit and vegetables, oilseeds) and in other cases there are analogous measures (sugar, wine, fruit in syrup, cotton). In the future development of the CAP, guarantee thresholds will continue to play an important role. How far can the Community expect to succeed in controlling its agricultural production by price or quantitative action, and what accompanying measures will be necessary?     

THE COMMON AGRICULTURAL POLICY: THE IMPLICATIONS FOR ITALIAN AGRICULTURE

The relative importance of Italian agriculture in the EC, both in terms of net value added and of employment, has never been matched by a comparable impact on the CAP policymaking process. Mediterranean agricultural products in particular have been less favoured by the overwhelming common policy instrument of product price support, which has also a negative impact on the economy as a whole. The most relevant effects of the CAP are reviewed: the impact on resource allocation, including international income transfers, and the effects on the environment, as well as the effects on interpersonal income distribution. An evaluation of CAP is then made from different points of view: the likely perspective of present Italian farmers, a national perspective and an overall perspective, including the interests of non EC countries and future generations. Lower and more balanced price support, together with higher concern for structural and environmental policies especially in less favoured areas, are advocated.     

UK GOVERNMENT EXPENDITURE—IMPLICATIONS OF CHANGES IN AGRICULTURAL OUTPUT UNDER THE COMMON AGRICULTURAL POLICY

The change in government expenditure which accompanies change in agricultural land use and output is an important parameter in current policy decisions. This change is estimated in this paper using a simple accounting model which recognises the diversity of support schemes in operation and the interaction between them. Use of the model is illustrated by estimating the effects of changes in beef, sheepmeat and cereals output under alternative assumptions about market conditions, yield levels and land classes affected. The paper concludes by discussing other ways in which the model might be used.     

CANADIAN WHEAT EXPORTS IN THE INTERNATIONAL MARKET: AN EXPLORATORY ECONOMETRIC AND POLICY ANALYSIS

This study attempts to measure with a two-region model some of the key economic relationships for Canadian wheat in the world market. The excess demand function facing Canadian wheat exports was found to be price elastic. Dynamic policy multipliers were derived to calculate the effects on wheat exports and the world price of changes in policy instruments including the initial payment for wheat.
Cette étude a pour but de mesurer, au moyen d'un modèle portant sur deux régions, quelques-uns des principaux rapports économiques entre l'économie canadienne du blé et les marchés mondiaux. La fonction de demande excédentaire des exportations canadiennes de blé s'est vérifiée élastique par rapport au prix. Les effets de changements dans les instruments de la politique agricole, tels que le paiement initial du blé, sur les exportation canadiennes et sur le prix mondial du ble ont eté calcule au moyen de multiplicateurs dynamiques.     

IN SEARCH OF THE COMMON AGRICULTURAL POLICY'S ‘AGRICULTURAL COMMUNITY’

Although some aspects of the Common Agricultural Policy (CAP) are intended to improve the welfare of European society in general, its income support objective is aimed specifically at the ‘agricultural community’. This community has never been defined precisely. In consequence, it is difficult to assess the success of the CAP. Alternative ways of defining the agricultural community are considered and their implications for policy discussed. Existing data sources are used to illustrate the numbers of households and household members which various definitions produce.     

STANDARDS VERSUS PRICES REVISITED: THE CASE OF AGRICULTURAL NON-POINT SOURCE POLLUTION

This paper demonstrates that the conventional neoclassical arguments for recommending a uniform discharge tax in preference to a uniform discharge standard are founded on highly restrictive and unrealistic abstractions of the pollution process. Relaxation of the assumptions reveals that the uniform standard outperforms the uniform tax in controlling ambient pollution levels over a potentially wide range of parameter values. The results of a study on agricultural sediment control are reported. It is argued that this pollution process is predisposed to the conditions that favour the ‘cross-over’ in efficiency ranking between the two policies. These conditions are a high correlation between discharge abatement costs and pollution transport coefficients, and high variability in pollution transport coefficients relative to the interfirm abatement costs.     

AGRICULTURAL PROCESSING INDUSTRIES IN THE INTERNATIONAL DIVISION OF LABOUR*

Agricultural processing industries are sometimes recommended as being particularly suitable for industrialisation programmes in developing countries. In this article, however, it is argued that such a general statement does not appear to be warranted. In a short survey some of the criteria are first discussed by which suitability of agro-processing industries can be judged. It is concluded that the contribution to development objectives of some feasible sub-sectors can easily be overestimated. It also appears that the wide disparity of characteristics of sub-sectors that belong to the category of agricultural processing industries necessitate careful examination of individual sub-sectors before judgement as to their attractiveness for developing countries is pronounced. In order to illustrate this point evaluations of the cocoa and leather industries are briefly discussed.     

THE IAC'S APPROACH TO AGRICULTURAL POLICY*

The main recommendations contained in the IAC's reports on rural references are outlined. The Commission's reasoning on four issues that are widely viewed as important to the formulation of rural policy is examined. The four issues are: assistance to industry; terms of trade; uncertainty and instability; and adjustment policy. Criticisms are made of the IAC's argument on these issues, and some inconsistencies between reports are indicated. It is concluded that the IAC has made a valuable contribution to the discussion of rural policy in Australia even though its recommendations are sometimes sounder than the argument offered to support them.     

论原始农业起源过程中的“观念农业阶段”

本文认为在农业起源的过程中,存在着一个“观念农业阶段”。农业起源的内因是由于漫长的旧石器时代的进步,当时的人们已经能够相当熟练地使用石器等因素的作用;农业起源的外因则是受晚更世冰期的影响。由于当时气温大幅度下降,部分地区人们食物严重短缺,迫使人类对动植物有新的认识,逐渐了解到植物可以被种植,即出现了“农业观念”。不过,虽然当时的人们拥有一些有关从事农业所必备的知识,但是由于食物经常短缺,使得种值行为不能经常地、持续地进行,因而只能是处于“观念农业阶段”,即是一种拥有部分有关种植的知识,但没有相应的、有效地农业行为的阶段。“观念农业阶段”持续了很长的一段时间,直到全新世来临才结束。而这部分的人们有条件、也有必要把这种行为持续地进行下去。这样渐渐地结束了“观念农业阶段”,发现了实实在在的农业,进入了全新世、新石器时代。