Swedish Agriculture without European Agricultural Subsidies
Informations
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The purpose of this study is to investigate the welfare effects in the market of one agricultural product in Sweden after a hypothetical abolishment of the Common Agricultural Policy (CAP) direct payments (subsidies). In this study, the market for table potatoes is analysed. The results of the analysis are then used to draw possible conclusions about the effects of an abolishment of direct payments in the Swedish agricultural sector in general. A simple demand and supply model is used to analyse the effects. Three possible outcomes are investigated in which either consumers, retailers or producers (farmers) bear the burden of an abolishment. In monetary values, retailers incur the biggest loss if they would have to bear the burden of an abolishment. Still, it is more probable that either consumers and/or producers bear the burden of an abolishment. The abolishment of direct payments would lead to a smaller amount of farm holdings which results in higher social security and environmental costs. In general, the study shows that the abolishment of direct payments incurs costs for the Swedish table potato market and agricultural sector.
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http://uu.diva-portal.org/smash/get/diva2:700633/FULLTEXT01.pdf