Macedonia at the doorstep of the European Union : a partial equilibrium analysis of the implications for the feed-livestock complex

Abstract: Macedonia, which applied for membership in the European Union in March 2004 and was granted candidate status in December 2005, is likely to become a member, if and when the next enlargement takes place. Now, at the doorstep of the European Union and before real accession negotiations start, it is a good idea for policy makers and the general public in Macedonia to carefully analyze the likely effects of membership and to consider what can be done to dampen the negative aspects and to get the most out of the good ones. In this thesis the implications of Macedonia's possible accession to the European Union is analyzed. Focus is on the effects on Macedonia's agriculture in general and the feed-livestock complex in particular. The method used is twofold and consists of a qualitative and a quantitative assessment. The qualitative analysis includes an introduction to Macedonia and Macedonia's agriculture. The use of models in economic trade analysis is also discussed in connection with a review of relevant literature. The quantitative analysis is based on a comparative static analysis of a set of scenarios related to a possible future accession. In order to carry out this analysis, a synthetic single-country partial equilibrium model for the feed and livestock complex in Macedonia has been constructed, calibrated, and used for scenario analysis. The scenario analysis allows for some general conclusions to be drawn but its strength lies in its impact assessment of individual commodities in the feed-livestock complex. The model simulation indicates that EU-Accession "today" would have a significant impact on the feed-livestock complex in Macedonia. However, these impacts will vary from one commodity to another in both magnitude and signs as the rates of support to individual commodities in the EU and in Macedonia diverge. The adjustment of Macedonian support levels to EU standards will therefore imply both raises and cuts.