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European Review of Agricultural Economics 2007 34(1):21-52; doi:10.1093/erae/jbm001
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© Oxford University Press and Foundation for the European Review of Agricultural Economics 2007; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org

Farm-based modelling of the EU sugar reform: impact on Belgian sugar beet suppliers

Jeroen Buysse1, Bruno Fernagut2, Olivier Harmignie3, Bruno Henry de Frahan3, Ludwig Lauwers2, Philippe Polomé3, Guido Van Huylenbroeck1, and Jef Van Meensel2

1 Ghent University, Belgium
2 Institute for Agricultural and Fisheries Research, Merelbeke, Belgium
3 Université catholique de Louvain, Belgium

Corresponding author: Guido Van Huylenbroeck, Department of Agricultural Economics, Coupure Links 653, B-9000 Ghent, Belgium. E-mail: Guido.VanHuylenbroeck{at}UGent.be

Received November 2004; final version received December 2006

A mathematical programming model, calibrated on individual farm data, is used to analyse the reform of the common market organisation (CMO) in the sugar sector of the European Union. The model includes a precautionary farm supply function for out-of-quota sugar beet that is estimated as part of a simultaneous system of first-order conditions. Simulation results from a sample of Belgian sugar beet farms show that the sugar CMO reform induces different supply and income effects across farms depending on their share of out-of-quota sugar beet relative to their total beet supply and their quota rent. A further cut in the minimum price of sugar beet initiates structural change in the farm sector.

Keywords: Positive mathematical programming, farm model, sugar reform, Common Agricultural Policy, European Union

JEL classification: Q12, Q18


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