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Efficiency of Alternative Policies for the EC's Common Agricultural Policy
Author(s) -
Gorter Harry,
Meilke Karl D.
Publication year - 1989
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242015
Subject(s) - summit , common agricultural policy , economics , production (economics) , welfare , agriculture , public economics , economic policy , microeconomics , market economy , european union , ecology , physical geography , biology , geography
The Common Agricultural Policy (CAP) of the European Community (EC) is facing a crisis from budgetary and political pressures. This study analyzes the relative efficiency of four policy options discussed at the recent emergency summit in Brussels including a price reduction, coresponsibility levies, production controls, and a two‐price plan. These are assessed in terms of their efficiency in achieving producer welfare. A two‐price plan is superior to a production quota only at lower producer income goals. A price reduction policy is more efficacious than a coresponsibility levy, but both are shown to be inferior to either quotas or a two‐price plan.