POSSIBLE EFFECTS OF THE EC-PRODUCTION SUBSIDY ON THE MARKET FOR TOMATO CONCENTRATES

Since July, 1st, 1978, EC-producers of certain processed fruits and vegetables have been granted a production subsidy to improve their competitive position against producers from third countries.
In return the processors are obliged to pay the raw product producer a minimum price on a contract basis.
At the same time the import minimum price system, which was applied to tomato concentrates since 1975, was abolished.
The subsidy is given for a range of products, most of them are tomato products.
In the 1979 budget nearly 25o Mio European Account Units (EAU) are appropriated for this measure.

There is some indication, that in future the production subsidy system will be applied to additional products as a measure of income policy especially for Mediterraneum producers.
For this reason the possible effects on supply, demand, prices, trade and producer income are analyzed – taking the market for tomato concentrates as an example.

VI Symposium on Horticultural Economics

W. Elfring

https://doi.org/10.17660/ActaHortic.1979.97.27