Estimating the Effects of the EEC Common Grain Policy

Abstract

The EEC common grain policy is expected to alter world production and trade. In an investigation of the forthcoming changes, linear programming models were used to estimate production, trade, and resource use in 1970 for the major feed grain and wheat producing and trading nations of the world. Comparison of the estimates with the 1959–60 to 1961–62 base period indicates that EEC feed grain import requirements will increase substantially. Under the assumed conditions of the analysis, the United States will be the major beneficiary of the increased demand for feed grain. The prospects for wheat trade with the EEC, however, are less favorable. Except for quality hard wheat and durum wheat, United States and Canadian wheat exports to the EEC will be virtually eliminated by 1970. Nevertheless, the results indicate that gross revenue from United States wheat and feed grain exports to the EEC will be substantially greater in 1970 than during the base period. These results are considerably more optimistic than those reached by other researchers. Recent trends in production and trade tend to support the major findings of this sudy.