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This paper analyses the effects of a rebalancing policy for the EC feed sector on the lessdeveloped countries. The theoretical part of the study reveals that evaluation of changing world marketprices from the developing countries' perspective depends on the trade position of the LDCs in the relevantmarkets, on home-made distortions in the poor countries, as well as an the degree of insulation of domesticmarkets from the world market. These findings are supported by the empirical results presented in thepaper. Using the sequential approach based on the Hicksian compensated curves of the new welfareeconomics, the efficiency effects due to a rebalancing policy in the EC feed sector are calculated for 16developing countries/regions. These countries/regions cover about 98 percent of the developing world. Theresults show that, depending on the assumed world price transmission elasticity as well as on theapplication or absence of national agricultural policies in the countries considered, the developing worldas a group would have to bear new welfare losses of between US$519 million and US$789 million. Thesewelfare effects would not be spread evenly over the countries under consideration. While most developingcountries and regions would experience a substantial decrease in their net economic welfare, somecountries would enjoy considerable welfare gains.

Subject(s): Agribusiness

Agricultural and Food Policy

International Development

Issue Date: 1992

Publication Type: Conference Paper/ Presentation

PURL Identifier: Page range: 51-60

Total Pages: 10

Record appears in: International Association of Agricultural Economists (IAAE) > 1992 Occasional Paper Series No. 6

Autor: Hartmann, Monika ; Schmitz, Peter Michael


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