1. Dr. Rafael de Arce and Dr. Ramón Mahía Professors in Econometrics UAM
Automatic Tool for Policy Simulation Scenarios in Agricultural products liberalization
Dr. Rafael de Arce and Dr. Ramón Mahía
Professors in Econometrics UAM
July, 28th 2005

2. Project Objectives
Political and entrepreneurships decisions: building a benchmark simulator for more efficient alternatives
Academical robustness and Automatic tool for the evaluation of policy alternatives
Studies to be used in a real context:
One product
Quantitative and Qualitative considerations
Bilateral outlook (“two sea-lands view”)
Equivalent Tariff: key issue in political negotiations

3. World tomato market: production
Area
Percentage
  China
21,8%
European Union 15
14,4%
USA
10,7%
  Turkey
8,1%
  India
6,9%
  Italy
6,1%
  Egypt
  Spain
3,6%
  Islamic Rep of Iran
3,0%
  Brazil
  Mexico
2,1%
Morocco
1,0%
Others
12,6%
European Union 25
15,0%
Total
100,0%
100 Mt per year
China:21,8%
Spain, Netherlands, Belgium, Italy and Greece: 14%
Morocco: 1%

4. Yield of Tomato Harvested Area
Country
Position
Over mean
  Netherlands 1
11,23
  Canada 16
2,20
  Belgium 2
9,43
  Cyprus 17
1,84
  Sweden 3
7,94
  Palestine 18
1,81
  Norway 4
6,79
  Ireland 19
1,74
  Finland 5
6,49
USA 20
1,67
  Iceland 6
5,66
  Kuwait 21
1,51
  Denmark 7
4,98
  Chile 22
1,49
  Austria 8
4,74
  Korea Rep 23
  United Kingdom 9
4,02
  Spain 24
1,40
  New Zealand 10
3,13
  Brazil 25
1,34
  Germany 11
3,11
  Japan 26
  France 12
3,08
  Portugal 27
1,31
  Switzerland 13
2,94
  Lebanon 28
1,30
  Israel 14
2,70
  Morocco 29
1,25
  United Arab Emir. 15
2,36
  Italy 30

5. World tomato market analysis: prices
Country
1996
1997
1998
1999
2000
2001
2002
  Brazil
555,7
474,2
544,1
585,8
572,3
536,3
460,4
  China
496,5
462,2
447,7
420,3
455,8
469,2
451,9
  Egypt
284,5
285,0
277,9
275,8
265,3
267,9
269,0
  India
664,2
667,9
815,5
792,6
822,2
805,3
866,0
  Iran
266,2
439,0
585,7
201,5
261,8
366,3
260,3
  Italy
530,3
588,5
609,1
578,9
590,7
535,1
546,7
  Mexico
591,6
840,2
683,9
600,0
489,6
444,4
447,1
  Spain
426,8
554,7
598,6
544,4
635,3
469,4
483,5
  Turkey
687,6
733,2
701,7
548,5
633,4
488,8
463,8
Morocco
451,1
435,8
458,8
551,0
485,9
437,2
482,4

6. World tomato market: international flows
Exporter
Dollars
Percentage
Importer
Netherlands
24,7%
USA
26,0%
Spain
21,4%
Germany
24,0%
Mexico
19,3% UK
11,7%
Belgium
6,0%
France
8,3%
Canada
5,5%
5,1%
4,5%
4,2%
Italy
2,1%
3,9%
Sweden
2,0%
Morocco
2,8%
1,8%
Turkey
1,5%
Russian Feder.
Israel
1,2%
Austria
1,3%
Jordan
0,6%
Switzerland

7. World tomato market: distribution
Integrated chain: 60%
60-85% Germany, France, Switzerland
45% Spain, Italy, Greece
Market changes:
Market power
Asymmetrical relationship
Prices down-pressure
Few demanders for a lot of suppliers

8. Price implications in international trade between EU and Morocco
Exports-price elasticity estimation: 0.78
Equivalent tariff-only estimation: price gap method

9. Tomato exports increase in Morocco:
Evidence about production output gap
Market substitution of EU suppliers
Effects in revenues and employment in Morocco

10. Substitution and output gap
With a proper investment effort, the Moroccan production could be three times the current one. The seasonal market share of Spain and Morocco implies a potential friction of both suppliers.

11. Effects in revenues and employment
2006
2007
2008
2009
2010
SUM
Tariff Reduction
1,21
2,41
3,62
4,83
6,03 18
Tomato Exports Increase
12,6
25,2
37,7
50,3
62,9
189
New Added Value 13 27 40 53 67
200
New Employment
291
577
855
1.135
1.410
4.267

12. Some policy considerations
Poverty reduction in agricultural population
Migration policies implications
Compensation measures in “losers countries”
Quality requirements in EU
Distribution Chains ownership: added value benefits