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A Differentiated Goods Model of the Effects of European Policies in International Poultry Markets

Published online by Cambridge University Press:  28 April 2015

Julian M. Alston
Affiliation:
Victorian Department of Agriculture and Rural Affairs, Australia
Grant M. Scobie
Affiliation:
New Zealand
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Abstract

The Common Agricultural Policy increases European poultry production costs, prohibits imports, increases domestic prices, and subsidizes exports. This policy has displaced some U.S. exports. However, the net impact in the U.S. has been quite modest, even assuming poultry is homogeneous, independent of source country. Costs to U.S. producers are almost entirely offset by gains to U.S. consumers. Effects in the U.S. are even smaller when imperfect substitutability between poultry from different countries is accounted for. A retaliatory U.S. export subsidy would have more dramatic effects in U.S. markets.

Type
Submitted Articles
Copyright
Copyright © Southern Agricultural Economics Association 1987

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