QUOTA MOBILITY IN THE EUROPEAN SUGAR REGIME

We develop an analytical framework for evaluating the consequences of a market of quota rights in the European Union sugar sector. Three par ticularities of the sugar regime, i.e., the distinction between 'A' an d 'B' quotas, the levy mechanism and the possibility of producing 'C' sugar at the world price, are modelled. The empirical objective is to assess how cross-border quota transferability would influence producti on in the various regions of the European Union. It appears that rough ly 45 per cent of the production could be reallocated. Some of the sug ar production is likely to shift from Southern Europe and the Benelux mainly towards France, Germany and Denmark. However, substantial trans fers would take place between producers in different regions within th e same country.