Files
Abstract
Between 1981 and 1988, the drachma has devalued by 62.5% against the ECU. Until
mid-1985 any devaluation of the drachma was followed by a corresponding devaluation of
the 'green drachma'. After that period, the green rate either remained unchanged or
changed by a substantially smaller percentage, resulting in farmers' income loss and
consumers' gain.
The aim of this paper is to investigate the welfare effects on production/producer,
consumption/consumer and budgetary flows from and to FEOGA assuming that an
adjustment of the green drachma to its current exchange rate was realized. For this purpose
partial analysis methodology is employed.
The main findings are that, following a simultaneous adjustment of both rates, the gains
to producers and in exchange flows more than make up for the corresponding consumers'
losses for all products except beef.