The EU's grains, oilseeds, livestock and feed related market complex : Welfare measurement, modelling and policy analysis

This study focuses on the grains, oilseeds, livestock and feed (GOLF)-complex, which represents a complex of heavily interrelated markets comprising several agricultural subsectors like the arable sector, the cattle-dairy sector and the intensive livestock sector.The study consists of three parts. In part I the role of welfare economics in agricultural policy analysis is discussed. In particular welfare measurement in a related market context and in case of incompletely modelled agents is paid attention to. Part II addresses the econometric modeling of the economic behaviour of consumers and producers. Models, based on micro economic duality theory are formulated and estimated, using a mixed estimation procedure. This procedure combines both sample (aggregate time series) and non-sample information.The estimated models are transformed into a simulation model, Part III, which is used to run three policy simulations: 1) the MacSharry reform, 2) the Agenda 2000 reform, and 3) a WTO trade liberalization scenario. All analysed reform scenarios satisfied the compensation criteria. Some selected results are that:<ol TYPE="a"><li>taking into account the social costs of public funds significantly reduced the efficiency gain of the MacSharry reform;</li><li>the support reduction obtained by implementing Agenda 2000 is 18% (measured in terms of AMS); and</li><li>the delayed reform in the dairy sector will be still necessary to achieve the assumed stylized Millennium Round compromise.</li>