Environmental and economic effects of a fall in cereal prices in the EU internal market: The case of Denmark

Research output: Contribution to journalJournal articleResearchpeer-review

Reform of the European Common Agricultural Policy (the CAP) will reduce cereal prices in the Internal Market while simultaneously increasing direct support to farmers (Agenda 2000). This paper examines the possible effects of liberalisation of the CAP by modelling the effects of a 10 per cent reduction in cereal prices combined with compensation to farmers. We applied an integrated modelling system suitable for estimating both the economic and environmental consequences of agricultural and environmental policy measures and calculated the effects of a 10 per cent fall in cereal prices on nitrogen loading of the Danish marine waters, on private consumption, GDP, the balance of payments, and employment. The results indicate that price reductions do not have significant effects on nitrogen loading relative to the 50 per cent reduction target, since a 10 per cent reduction in cereal prices only leads to a 2.4 per cent reduction in loading.

Original languageEnglish
JournalEnvironmental and Resource Economics
Issue number1
Pages (from-to)73-90
Number of pages18
Publication statusPublished - Sep 2001

    Research areas

  • Agricultural policy, Environmental economics, Environmental effects, Integrated modelling, Nitrogen loading

ID: 210832375