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Interview with Fabio Santeramo from the University of Foggia

Is the EU's Entry Price System effective?

The European fresh produce import system is rather complex and changes depending on product, partner country and season. This is because the EU is the main importer, and one of the leading producers of fresh produce in the world, at the same time.

What are the effects of a regime based on an Entry Price System? We asked this question to Fabio Santeramo (in the photo), professor of Agricultural Economics and Politics at the University of Foggia. 

From the analyses carried out on the European price of tomatoes, lemons and apples cultivated in Europe and on the price of produce imported from countries like Morocco, Argentina, Turkey and China, it emerged that quotations behave differently when import prices are above (or below) the entry price.

An econometric model that understands the functioning of the import regime and explains the role played by entry prices was used to analyse different cases.

"The Entry Price System is part of the complex system that regulates the trade flow between the European Union and partner countries. The positive aspect is that it establishes a (minimum) price threshold above which the price of imported produce should remain. However, this tool has not proven very effective in stabilising the internal market."

"The Entry Price System is rather expensive, as it is based on a daily assessment of the quotations of imported products and a comparison between these quotations and threshold prices (which vary on a seasonal basis). This process is just too complex. In addition, numerous international scholars agree on its lack of effectiveness."

For many products and partner countries, the entry price value is far below the cost of imported products - this alone is a testament to the uselessness of this system. But what could be done to improve it? "I do not believe improving this system would be a solution. It should be abolished, especially considering that the import quota system is already an effective tool to protect the internal market."

"Our producers are protected by the quota system, as it impedes the entry of large quantities of produce. The money saved by abolishing the Entry Price System could be used to improve food safety checks, which would help both producers and consumers."

For further information:
1)Antonio Cioffi, Fabio Gaetano Santeramo, Cosimo Damiano Vitale, 'The price stabilization effects of the EU entry price scheme for fruit and vegetables', 2011, Agricultural Economics, Vol. 42, pag. 405418.
2)Fabio Gaetano Santeramo, Antonio Cioffi, 'The entry price threshold in EU agriculture: Deterrent or barrier?', 2012, Journal of Policy Modeling, Vol. 34, pag. 691704.

Contacts:
Fabio Gaetano Santeramo, PhD
Dipartimento di Scienze Agrarie, degli Alimenti e dell'Ambiente
University of Foggia
Via Napoli 25, 71122 - Italy
Email: fabio.santeramo@unifg.it

Publication date: 2/6/2017


 


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