Institutional Agreements and Evolution of the Spanish Maize Sector

Spain's accession to the EC in 1986 turned out to prove soon enough, in practical terms, the logic of the Customs Union Theory. Substantial reductions in maize imports by Spain, mainly from the USA and, to a lesser extent, from Argentina, fuelled the world agricultural trade conflict. Under GA TI Article 24/6, the USA and EC agreed on a quota of 2 million tons to be purchased by Spain from non-EC sources at lower prices. This institutional agreement, together with regulations contained in the Accession Treaty, were considered in the analysis of expected trends of the Spanish maize sector during the transition period. Although only crop producers, livestock producers, and taxpayers were considered, the analysis seems to support the view that the last two groups will suffer welfare losses whereas crop producers will obtain welfare gains. However, differences between positive benefits (crop producers) and negative benefits (livestock producers) due to the gap between world prices and Spanish policy prices will become gradually smaller as the transition period (1986-92) comes to an end.