PRICE-SUPPORT EFFECTS ON EC PRODUCERS

This paper presents a new approach to assessing the impact of price-support policies on producer behaviour. This approach takes explicit account of the impact of such policies on a producer's uncertain production environment and includes a numerical procedure for calculating ex ante price variability from ex post producer price data. The method is applied to European Community agricultural industries in which intervention purchasing schemes operate. The results show the extent to which price support-policies distort the signals producers receive from world markets.