2120 final report.pdf - Agra CEAS Consulting

THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSTable 7.6: Changes in import tariffs for EU-25Units 10% 20% 50%Mean SD 1 Mean SD Mean SDProducer Surplus Euro (millions) -100.31 1.48 -198.96 2.96 -484.70 7.74Consumer Surplus Euro (millions) 111.65 1.66 224.87 3.39 573.63 9.04Total Surplus Euro (millions) 11.34 0.25 25.90 0.82 88.93 4.53Quantity Shell % 1.01 0.12 2.02 0.24 5.06 0.59Quantity Processed % 2.02 0.26 4.05 0.52 10.11 1.27Quantity Alternative % -1.55 0.22 -3.10 0.45 -7.75 1.12Price Shell % -2.12 0.04 -4.24 0.08 -10.61 0.20Price Processed % -2.23 0.07 -4.46 0.13 -11.15 0.32Price Alternative % 0.61 0.29 1.22 0.58 3.04 1.49Quantity Shell 3rd Country % 1.26 0.14 2.52 0.28 6.29 0.70Quantity Processed 3rd Country % 1.95 0.21 3.90 0.42 9.73 1.02Source: Agra CEAS estimates.Note: 1 Standard Deviation.The results from the scenarios reducing the EU’s level of import protection indicatevery clearly that as a consequence of the reduction in import tariffs producers stand tolose substantially (up to €200 million across the EU-25 with a 20% reduction in tariffs or€485 million for a 50% tariff reduction). Conversely as would be expected consumersgain substantially as a result of an increase in supply at a lower price (up to €574 millionwith a 50% reduction in tariffs across the EU-25) with the net effect being a reasonablysubstantial increase in overall surplus of between €89 million (EU-25) and €61 million(EU-15). In line with a priori expectations the various levels of tariff reduction result in a rise in thequantity of imports (of up to just under 10% for processed egg imports in the EU-25 when tariffs arecut by 50%) and a decrease in price. This price decrease also generates higher demand and higherproduction levels to meet this demand.A further interesting feature of the model results is that there is a potential modest decrease in thedemand for alternatively produced shell eggs. This results from the fact that increasing imports willtend to reduce the price for caged shell and processed eggs and will therefore result in somesubstitution of demand from alternative produced shell eggs to caged shell eggs (again assuming thatpremium levels for eggs from alternative systems remain the same).7.2.4. Combined ScenariosAs part of the quantitative analysis, several combined scenarios have also been investigated. Theseresults provide insights into how multiple changes to the egg sector will tend to impact producersand consumers. As previously noted, it should be borne in mind that these estimates need to betreated with caution as the scenarios investigated are pushing the model to the bounds of meaningfulinterpretation.99