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Automatic Tool for Policy Simulation Scenarios in Agricultural products liberalization

Automatic Tool for Policy Simulation Scenarios in Agricultural products liberalization. Dr. Rafael de Arce and Dr. Ramón Mahía Professors in Econometrics UAM. July, 28th 2005. Project Objectives.

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Automatic Tool for Policy Simulation Scenarios in Agricultural products liberalization

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  1. Automatic Tool for Policy Simulation Scenarios in Agricultural products liberalization Dr. Rafael de Arce and Dr. Ramón Mahía Professors in Econometrics UAM July, 28th 2005

  2. Project Objectives • Political and entrepreneurships decisions: building a benchmark simulator for more efficient alternatives • Academical robustness and Automatic tool for the evaluation of policy alternatives • Studies to be used in a real context: • One product • Quantitative and Qualitative considerations • Bilateral outlook (“two sea-lands view”) • Equivalent Tariff: key issue in political negotiations

  3. World tomato market: production • 100 Mt per year • China:21,8% • Spain, Netherlands, Belgium, Italy and Greece: 14% • Morocco: 1%

  4. Yield of Tomato Harvested Area

  5. World tomato market analysis: prices

  6. World tomato market: international flows

  7. World tomato market: distribution • Integrated chain: 60% • 60-85% Germany, France, Switzerland • 45% Spain, Italy, Greece • Market changes: • Market power • Asymmetrical relationship • Prices down-pressure • Few demanders for a lot of suppliers

  8. Price implications in international trade between EU and Morocco • Exports-price elasticity estimation: 0.78 • Equivalent tariff-only estimation: price gap method

  9. Tomato exports increase in Morocco: • Evidence about production output gap • Market substitution of EU suppliers • Effects in revenues and employment in Morocco

  10. Substitution and output gap With a proper investment effort, the Moroccan production could be three times the current one. The seasonal market share of Spain and Morocco implies a potential friction of both suppliers.

  11. Effects in revenues and employment

  12. Some policy considerations • Poverty reduction in agricultural population • Migration policies implications • Compensation measures in “losers countries” • Quality requirements in EU • Distribution Chains ownership: added value benefits

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