Community Research and Development Information Service - CORDIS

International trade and social welfare effects of the ban

The ban is expected to decrease the productivity of the pig and poultry sectors of the EU. The software package MISS (world trade simplified simulation model) has been used to simulate the international market effects of the ban on fifteen commodities which are produced or used in agriculture in four big countries: EU-15, USA, new EU-members, rest of the world.

EU-15 pig farmers will bear most of the cost of the ban with the loss of international market shares, despite the decrease in EU feed prices that derives from the current reforms of the Common Agricultural Policy (CAP). Other farmers than pig producers will benefit from higher world prices of agricultural products than without the ban. Theoretically, the world consumers will face a welfare loss but it might not be statistically significant because they also will adjust their food bundle according to relative price changes (with a little more of beef meat and vegetal oils), and EU consumers' benefit from the CAP reforms. Eventually a loss of social welfare is associated to higher manure per pig in the EU. Whether this social cost will be born by pig producers, taxpayers or directly by the EU consumers as a negative externality will depend on the environmental rules and on their enforcement modalities.

Reported by

National Institute of Agronomic Research, Dept. of Economics
INRA-ESR, 4 allée A. Bobierre, CS61103
35011 Rennes Cedex
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