Agricultural import protection and its costs in Finland

The study examines the costs of maintaining the high level of agricultural production in Finland and the effects of changes in trade policy.

Finnish agricultural production has been based on artificially high producer prices, maintained through import controls. This has led to a growing gap between domestic and world market prices. Approaching changes in trade policy – the Uruguay Round of GATT and possible EU membership – are forcing a reassessment of the sustainability of this policy.

The study assesses the economic effects of trade policy changes at two levels. A partial equilibrium model is used to examine changes in producer and consumer welfare under three scenarios: a reduction in border protection in accordance with a GATT agreement, adjustment of prices to the EU level, and a transition to free trade. A general equilibrium model, in turn, is used to assess the broader multiplier effects of agriculture, structural change, and changes in income distribution – a perspective that is essential in a country like Finland, where the significance of agricultural support is considerable. (AI translation)

• ISSN: 0358-5980
• ISBN: 951-9282-55-6