Partial Market Liberalization and the Efficiency of Policy Reform: The Case of the European Dairy Sector

Bouamra‐Mechemache, Zohra; Chavas, Jean‐Paul; Cox, Thomas L.; Réquillart, Vincent

doi:10.1111/1467-8276.00363

Cited by 18 publications

(15 citation statements)

References 31 publications

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“…3 3 Bouamra‐Mechemache et al (2002) modeled the EU price support system. The difference is that the European policy clearly acts as a price support system in that government purchases can be sold into the international markets at lower prices than in the domestic market.…”

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confidence: 99%

Dairy Trade Liberalization Impacts in Canada

Abbassi¹,

Bonroy²,

Gervais³

2008

Canadian J Agri Economics

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"Supply management in Canada is facing broad trade liberalization pressures. This paper uses a spatial equilibrium trade model to simulate the impacts of various trade liberalization scenarios in the Canadian dairy industry. The results critically hinge on the relationship between increased market access and the market sharing quota (MSQ) at the farm level. Two different MSQ decision rules are simulated: (i) global output at the farm level remains unchanged following liberalization; and (ii) the MSQ is reduced to support the unit production quota rent at its preliberalization level. The results show that if the MSQ is held constant following a potential compromise in the Doha Round, retail prices of fluid milk and cheese would decrease by about 5%. These price movements can be negated by a 1.4% cut in the global MSQ at the farm level. Net welfare gains in the Canadian dairy sector following market access reforms range between $48.2 and $64.2 million when evaluated at the 2003-04 world prices." Copyright (c) 2008 Canadian Agricultural Economics Society.

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confidence: 99%

Dairy Trade Liberalization Impacts in Canada

Abbassi¹,

Bonroy²,

Gervais³

2008

Canadian J Agri Economics

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“…Another limitation of this analysis is that we are simulating the effects of a single policy measure Bouamra-Mechemache et al (2002). found that partial market liberalization is not necessarily welfare enhancing in a second-best world with multiple interrelated policies.14 This value is calculated as the discounted sum of the equilibrium rental value over the duration of the quota regime (until 2015, so far).…”

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confidence: 99%

Explaining Differences in Milk Quota Values: The Role of Economic Efficiency

Álvarez

Arias

Orea

2006

American J Agri Economics

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This article explores the relationship between milk quota values and economic efficiency in order to analyze government interventions in quota allocations among producers. For this purpose, we estimate quota values using a panel of Spanish dairy farms. Quota values are then decomposed into economic efficiency, price, and scale effects in order to assess the relative influence of these factors. We find that efficiency is important in explaining quota values but is uncorrelated with observable farm characteristics. This casts doubts on the government's ability to allocate quotas to efficient farms. Copyright 2006, Oxford University Press.

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“…We also consider domestic production quotas q yi restricting the production of the ith producer. The introduction of domestic production quotas is relevant, as they can affect the distortionary effects of trade policy (e.g., Bouamra-Mechemache et al, 2002). Again, for simplicity, we focus our analysis on output quotas, with q yi !…”

Section: Policy Distortions and Market Equilibriummentioning

confidence: 99%

“…This would identify secondbest conditions under which partial market liberalization is immiserizing. This is illustrated by Bouamra-Mechemache et al (2002) in an analysis of partial domestic and trade policy reform in the European Union (EU) dairy sector. The EU dairy sector is of interest because, even after the Uruguay round of GATT negotiations and recent EU policy reforms, it is still subject to significant policy distortions: domestic milk production quotas, domestic subsidies, as well as trade barriers (including import quotas and export subsidies).…”

Section: V3 a Special Case: When T* Is Differentiablementioning

confidence: 99%

“…This is of particular interest when domestic policy affects the distortionary effects of trade policy. For example, there are situations where domestic production quotas can help reduce the distortionary effects of export subsidies (e.g., Bouamra-Mechemache et al, 2002). This stresses the importance of an integrated analysis of the effects of domestic and trade policy.…”

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The Economic Efficiency of Policy Reform and Partial Market Liberalization under Transaction Costs

Chavas¹,

Mechemache²

2006

Bull Economic Research

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The article presents an integrated analysis of the effects of domestic and trade policy reform on resource allocation and welfare under transaction costs. It develops a general multiagent, multicommodity model, where transaction costs are the costs of resources used in the exchange process. The influence of domestic and trade policy (including both price and quantity instruments) on distorted market equilibrium is analysed. Alternative concepts of distorted equilibrium are presented and investigated. They provide a basis for evaluating the effects of multilateral partial market liberalization on resource allocation and welfare under transaction costs. New conditions are derived under which multilateral policy reforms generate Pareto improvements.

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Partial Market Liberalization and the Efficiency of Policy Reform: The Case of the European Dairy Sector

Cited by 18 publications

References 31 publications

Dairy Trade Liberalization Impacts in Canada

Dairy Trade Liberalization Impacts in Canada

Explaining Differences in Milk Quota Values: The Role of Economic Efficiency

The Economic Efficiency of Policy Reform and Partial Market Liberalization under Transaction Costs

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