Price and Trade Policy in the Grain Sector in Bulgaria and Food Security

Food security is an important agricultural policy objective in most countries. In Bulgaria food security is achieved by measures focused on self-sufficiency. These policy measures in the grain sector result in substantial efficiency losses and lower growth. Partial equilibrium analysis was used to quantify the welfare effects and losses from different policy measures for the period 1991-1994. The results show that, during the whole period, consumers of farm products have been better off but the producers of cereals have been penalised. Bulgarian foreign exchange earnings have been reduced and net economic loss, resulting from misallocation of resources, have ranged from 220 m to 730 m leva per year. As a result, the short-term gains to consumers achieved by price and trade measures in the period were at expense of long-term gains to Bulgaria as a whole