EFFICIENCY LOSSES AS A RESULT OF INSUFFICIENT STRUCTURAL ADJUSTMENTS DUE TO THE EC SUGAR REGIME - THE CASE OF GERMANY

Comparison of the current structure with an optimal structure of the G erman sugar sector indicates large potential for efficiency gains. Imp osition of EC sugar quotas at the firm level created inefficiencies th at have been maintained by the design of the EC sugar regime which hin ders an adjustment to the long term optimum. As a result of simultaneo us examination of regional beet supply functions, transportation and p rocessing costs, total efficiency losses amount to more than 20 per ce nt of current production cost of sugar. Welfare losses of this extent accrue as benefits to a small pressure group and could be reduced if q uotas are eliminated or made tradeable.