Bridging Micro- and Macro-Analyses of the EU Sugar Program: Methods and Insights

econometric estimates. We then include such a specification in a GE model including a detailed
representation of the sugar sector.

Our simulations suggest that the 2005 reform of the EU sugar sector will lead to the end of C sugar
exports, and that the fall in prices will provide significant degree of freedom for coping with the need
to reduce significantly the EU sugar tariffs under the WTO negotiations. The reform should also make
it possible to cope with short run constraints imposed by the WTO panel such as the cut of refunds by
an amount corresponding to the sum of ACP sugar imports and the C sugar. The losses for sugar beet
producers and processors will be significant, although they are partially compensated. The reform
should also result in savings for taxpayers and consumers. Overall, the reform should result in a
higher welfare for the EU15, even though cheaper sugar might raises some public health issues that
are not accounted for in the model. However, our simulations suggest that the 2005 reform is not
sufficient to address longer term commitments such as a complete elimination of export subsidies. It
is difficult to predict future world prices for sugar, in particular given the possible development of non
food use of sugar cane and beets. However, it is likely that the extra pressure added by preferential
imports under the EBA will make larger cuts in EU prices or/and in production quotas necessary.

References

Adenauer, M. and Heckelei T. (2005). Economic Incentives to Supply Sugar Beets in Europe. 89^th
European Association of Agricultural Economists seminar, Modeling Agricultural Policies, Parma, 3-5
February.

Adenauer, M., Louhichi, K., Henry de Frahan, B. and Witzke, H.P. (2004). Impact of the "Everything
but Arms" initiative on the EU sugar sub-sector. International Conference on Policy Modelling
(EcoMod2004), Paris, 30 June - 2 July, 2004.

Ball, V.E., Bureau, J.C., Butault, J.P. and Witzke, H.P. (1993). The Stock of Capital in European
Community Agriculture. European Review of Agricultural Economics, n°14, pp 12 23.

Bouët, A., Bureau, J.C., Decreux, D. and Jean, S. (2005). Multilateral Agricultural Trade
Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round. The World
Economy, 28, 9, pp 1329-1354.

Bureau, J.C., Guyomard H., Morin, L. and Réquillart, V. (1997). Quota mobility in the European sugar
regime. European Review of Agricultural Economics, 24: 1-30.

Chau N. and De Gorter H. (2005). Disentangling the Conssequences of Direct Payments Schemes in
Agriculture on Fixed Costs, Exit Decisions and Output. American Journal of Agricultural Economics,
87 (Number 5, 2005): 1174-1181

El-Obeid, A. and Beghin, J. (2005). Multilateral Trade and Agricultural Policy Reforms in Sugar
Markets. Working Paper 04-WP 356, Center for Agricultural and Rural Development, Iowa State
University,

EU Commission (2005). Reforming the EU sugar policy. Update of impact asseessment SEC (203
10022). Commission Staff Working Document COM(2005)263 final. Brussels 22.06.225.

EU Commission (2004). Accomplishing a sustainable agricultural model for Europe through the
reformed CAP - Sugar sector reform, COM(2004) 499 final, Communication from the Commission to
the Council and the European Parliament, Bruslles 14.7.2004.

22

<<   19   20   21   22   23   24   25   >>

More intriguing information