How effective is the EU Entry Price System for Fresh Fruits and Vegetables?

The EU protects EU growers of 15 kinds offresh fruits and vegetables against international competitionnot only by the means of ad valorem tariffs of up to 20%,but also by the EU entry-price system (EPS), which isdesigned to restrict imports below the product-specific,politically designated entry price level. This studyinvestigates the influence of the EPS on import prices offruits and vegetables per product and country of origin. Weutilise a unique data set comprising about 60,000observations of daily synthetic import prices.We develop two indicators for the effectiveness of theEPS, which serve as variables in a cluster analysisidentifying four classes differing in the relevance of theEPS. Results suggest that the relevance of the EPS isheterogeneous among products as well as countries of originfor most fruits and vegetables. Thus, an adequateassessment of the importance of the EPS requires not only aproduct-specific but also a country-specific analysis.Overall, our results indicate that the effectiveness of theEPS is highest for the import of artichokes, courgettes,cucumbers, lemons, plums and tomatoes. The influence ofthe EPS on apples, clementines and pears is significantlylower, and of least relevance for EU imports of apricots,mandarins, oranges, peaches and nectarines and tablegrapes. The EPS has the greatest effect on countries whichneighbour the EU, whereas it is of minor importance forexports from far-away countries with the exception of Chinaand South Africa.