The Price Stabilization Effects of the EU Entry Price Scheme for Fruit and Vegetables

Abstract

The article assesses the stabilization effects of the EU import regime for fresh fruit and vegetables based on the entry price system (EPS). The analysis is carried out on the EU prices of tomatoes and lemons and those of imports from some of the main competing countries on the EU domestic markets: Morocco, Argentina, and Turkey. It is based on the estimation of a threshold vector autoregressive econometric model that is shown capable of taking the workings of the import regime into account. The model shows that prices behave differently when import prices are above/below the trigger entry price. This article allowed to highlight the cases for which the isolation effect of EPS seems reached and the resulting stabilization effects.

Keywords: Fruit and vegetables, Entry price system, Stabilization effects, TVAR

JEL Classification: F13, Q17, Q18