THE REAL RATE OF PROTECTION: THE STABILIZING EFFECT OF PRICE POLICIES AND DIRECT PAYMENTS

Traditional indicators of protection refer to the level effect of price policies on income and ignore the stabilizing effect. We derive a measure of the real rate of protection which incorporates these dual dimensions. The income stabilizing effects of price policy protection lead to a greater level of real protection than would be measured conventionally. Computed real protection rates for the European Union wheat market over the pre- and post-MacSharry reform periods were found to be some 3-5 percent greater than traditional indicators. Moreover, the compensatory payments to farmers following the 1992 reforms had a major risk reducing impact.


Issue Date:
2001
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/20503
Total Pages:
15
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-11-20

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