Economic Impacts of Adopting the Common Agricultural Policy of the European Union: A CGE Approach to the Case of Romania

This paper evaluates potential economic impacts of incorporating Romania into EU's Common Agricultural Policy. A CGE model of Romania is employed to model likely changes in trade, production and welfare patterns with a focus on fifteen local agro-food activities. Three main findings emerge. Fir...

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Bibliographic Details
Published in:Journal of economic integration 2007-06, Vol.22 (2), p.407-438
Main Author: Scrieciu, S. Serban
Format: Article
Language:English
Subjects:
Agricultural economics
Agricultural policy
Agriculture
Common Agricultural Policy
Computable equilibrium models
Economic growth
Economic impact
Economic models
Economic reform
Equilibrium
EU membership
European Union
Farm economics
Farm exports
Global economy
Imports
International trade
Payments
Studies
Sustainability
Sustainable agriculture
Trade policy
Transition economies
Trends
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Summary:This paper evaluates potential economic impacts of incorporating Romania into EU's Common Agricultural Policy. A CGE model of Romania is employed to model likely changes in trade, production and welfare patterns with a focus on fifteen local agro-food activities. Three main findings emerge. First, the adoption of the CAP expands agro-food output and trade, promotes higher farm incomes, and increases economic welfare. Second, CAP application results in production specialisation effects, particularly for sugar and sugar beet, bovine meat products, ruminant live animals, dairies, and cereal grains. Third, the identified impacts are driven by changes in trade-related measures, particularly enhanced access to EU markets, and less by alterations in production-related domestic support. The paper concludes that EU accession and CAP adoption may bring potentially realisable growth in Romania's agro-food sector, though in practice this will depend on producers' ability to respond to the supply incentives being offered.
ISSN:1225-651X
1976-5525
DOI:10.11130/jei.2007.22.2.407