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Abstract
This paper analyses the effects of a rebalancing policy for the EC feed sector on the less
developed countries. The theoretical part of the study reveals that evaluation of changing world market
prices from the developing countries' perspective depends on the trade position of the LDCs in the relevant
markets, on home-made distortions in the poor countries, as well as an the degree of insulation of domestic
markets from the world market. These findings are supported by the empirical results presented in the
paper. Using the sequential approach based on the Hicksian compensated curves of the new welfare
economics, the efficiency effects due to a rebalancing policy in the EC feed sector are calculated for 16
developing countries/regions. These countries/regions cover about 98 percent of the developing world. The
results show that, depending on the assumed world price transmission elasticity as well as on the
application or absence of national agricultural policies in the countries considered, the developing world
as a group would have to bear new welfare losses of between US$519 million and US$789 million. These
welfare effects would not be spread evenly over the countries under consideration. While most developing
countries and regions would experience a substantial decrease in their net economic welfare, some
countries would enjoy considerable welfare gains.