Publication

This paper analyzes the effects of the European Union's Common Agricultural Policy (CAP) on price volatility in developing countries. The authors find that, while the CAP mechanisms help stabilizing EU farmers’ incomes, they boost price volatility at world level. It is argued, therefore, that the abolition of CAP instruments will help stabilize prices in world commodity markets, and that the CAP reform proposal to abolish the sugar quota is a step in the right direction.