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Extended summary

The main objective of the work package 4 is to examine the impact of pesticides reduction from a consumer point of view. Consumers' willingness to pay (WTP) for the reduced use of pesticides in the production of fresh and processed foods, are measured. In addition, this work package analyses the efficient way to disseminate the information on pesticides reduction to consumers (brands, signals of quality, different labels, etc.). Experimental markets are carried out in Portugal, France (for the period May 2008 to October 2009) and then in Greece and Holland (2010).

The literature shows that exist segments of the population willing to pay more for the products that present a label identifying specific credence attributes. Labels signalling a country-oforigin (PGI, PDO, CSC), a production system (organic, IPM, eco-labels) or fair trade have been studied to know if they are a very important mean to convey information to consumers.

Specifically, the eco-labels have been analyzed and compared to others labels (mandatory labels, organic labels) to understand if they are the right way to encourage both producers and consumers to make environmental improvements.

To evaluate the different instruments for signalling the reduction of pesticides, we used an experimental market and we determined consumer's willingness to pay (WTP) for produce grown with different pesticide levels. For our experimental markets conducted in Portugal (February, 2009) and France (May, 2009), consumers' WTP were estimate using the apple example, for three levels of pesticide reduction: i) "Regular": apples produced in the respect of the legal legislation. These apples don't have any cue. ii) Integrated Pest Management (IPM): apples produced with a decrease of the pesticides' use. In our experimental markets, IPM strategy involved three different signals with a "generic" IPM certification, a retailer brand and a protected designation of origin, (iii) "Organic": apples produced without any synthesis pesticides.

We show that there is a consumer WTP for pesticides use reduction (a premium for product with specific signal) and that a specific information on pesticide use increases this WTP for organic product but not for IPM product. However, the most important result is that the specific information decreases the WTP for the regular product. Then it seems more rigorous to treat the results in terms of "premium against the regular product", anticipating the loss of market share for the regular product.

Furthermore, we showed that the most valuated cues for pesticide reduction is organic label.

In Portugal, the premium for organic is 96.4% and for France is 72.5%. IPM certifications have also a high premium. However, producer's guarantee is more credible than retailer's.

After showing that consumers' premium for pesticide reduction is not independent from the product's sensory attributes, we give the quantitative results for the consumers WTP for a pesticide reduction. In addition the estimation of demand elasticities can provide essential results for other WP within TEAMPEST.

For the socio economic impact of our research, we explain why consumer's awareness of food safety and social preferences for improving the environmental sustainability of agriculture has led to the design and application of new policy instruments such as eco-labelling of fresh produce. However, the availability of detailed and disaggregated monetary estimates of individuals' WTP for pesticide risk seem to be crucial to implement such policies successfully. Indeed, WTP information provides a basis for price differentiation according to the type and severity of pesticides risks involved in production. Moreover, environmental voluntary agreements (VAs) between regulators and polluters are becoming an increasingly relevant environmental policy instrument, thanks to their flexibility and consensual character.

These agreements can assume a wide variety of forms and aims. Efficiency conditions and effectiveness in their use depend crucially on the environmental WTP (producers adhere more easily to the VAs if the WTP is high).

Introduction

Survey of the literature about the role of extrinsic cues which include the pesticide reduction in their production requirements for improving the WTP Extrinsic cues, such as brand, store name, price, certification and labels, interfere with both the consumers' perceived quality and perceived risk as they are attached to an array of characteristics that must be processed and understood by the consumers at the moment of purchase. Thus, the ways companies and/or governments use to provide information to consumers are crucial for helping them in their choices. For [START_REF] Miyazaki | The Effect of Multiple extrinsic cues on quality perceptions: a matter of consistency[END_REF] they must all present consistent information in order to be significantly predictive of the product's quality. What is the consumers' reaction to all this different extrinsic cues provided to them? Do they read this cues properly and act accordingly? Is there a best cue to signal, for instance, a pesticide reduction?

Labelling appears as a well-known procedure to convey information as any consumer comes across multiple examples in his routine purchases.

A label can perform multiple roles -an instrument that reduces the asymmetric information between producers and consumers [START_REF] Loureiro | Assessing Consumer response to protected Geographical Identification Labeling[END_REF]; a risk-reduction strategy [START_REF] Aqueveque | Extrinsic cues ad perceived risk: the influence of consumption situation[END_REF][START_REF] Kim | Japanese Consumers' use of extrinsic and intrinsic cues to mitigate risky food choices[END_REF] or an input to perceived risk assessment [START_REF] Conchar | An integrated framework for the conceptualization of consumers' perceived risk processing[END_REF]; an extrinsic quality indicator [START_REF] Caswell | Unifying two frameworks for analyzing quality and quality assurance for food products[END_REF]; they can even be thought of as acting as both 'windows' and 'mirrors' -they mirror by giving consumers access to information about how a product was produced and they also reflect the aspirations and concerns of the purchaser and their peer group [START_REF] Zadek | Social labels:tools for ethical trade[END_REF]. They are, as [START_REF] Caswell | Toward a More Compreheensive Theory of Food Labels[END_REF] advocate, much more than consumers' "point-of-purchase" information. For these authors labels can play several third-party roles -a significant product-design influence; a public surveillance assurance; a public values definition; a nutrition and food safety education format.

Labels signalling a country-of-origin (PGI, PDO, CSC), a production system (organic, IPM, eco-labels) or fair trade are a very important mean to convey information to consumers since they deal mainly with credence attributes1 . For these the consumer has to rely on trust in the information provided [START_REF] Kim | Japanese Consumers' use of extrinsic and intrinsic cues to mitigate risky food choices[END_REF].

As [START_REF] Grolleau | Giving credence to environmental labeling of Agro-Food Products: Using search and experience attributes as an imperfect indicator of credibility[END_REF] point out search and experience attributes can be cheaper and easier indicators of credence attributes -because, for example, safety output may be too costly to measure (e.g. the absence of pesticides residues), it may be more cost effective to measure management practices (e.g. organic farming) instead of the final product characteristics. Already Noelke and Caswell, in 2000, developed a model of quality assurance for credence attributes that highlighted the practice of companies to employ extrinsic indicators and cues to transform intrinsic credence attributes into extrinsic search indicators [START_REF] Caswell | Unifying two frameworks for analyzing quality and quality assurance for food products[END_REF]. In fact consumers will use the cues readily available to them such as eco-seals of approval, logos of well-known environmental associations, price and brand name [START_REF] Grolleau | Giving credence to environmental labeling of Agro-Food Products: Using search and experience attributes as an imperfect indicator of credibility[END_REF].

One can find numerous studies dealing with consumers' preferences and WTP for various credence attributes associated with the processes used to produce foods and, even though the results vary, the general consensus has been that exist segments of the population willing to pay more for the products that present a label identifying specific credence attributes [START_REF] Umberger | Country-Of-Origin Labeling Of Beef Products: U.S. Consumers' Perceptions[END_REF]. It is the case of [START_REF] Loureiro | Assessing Consumer Preferences for Organic, Eco-labeled, and Regular Apples[END_REF] when assessing, through a survey data and contingent valuation, Oregon's (USA) consumers' preferences for organic, eco-labeled, and regular apples -eco-labeled apples were found less desirable than organic when food safety, the environment and childrens' needs were considered; of Rozan et al.

(2004) when performing, on French consumers, an experimental investigation of quality certification on bidding behaviour for apples, potatoes and bread, using either a second price auction or the BDM procedure -the buying prices for non-certified products (regarding heavy metal concentration) decreased when such information was released; of [START_REF] Lusk | Consumer Demand for Mandatory Labeling of Beef from cattle administered growth hormones or fed genetically modified corn[END_REF] when analysing, using a contingent valuation mail survey, the United States consumer demand for mandatory labelling of Beef from cattle administered growth hormones or fed genetically modified corn -85% of respondents desired mandatory labelling of beef produced with growth hormones and 64% preferred mandatory labelling of beef fed genetically modified corn; consumers would be willing to pay 17.0 percent and 10.6 percent higher prices for beef on average to obtain information provided via mandatory labelling about whether the beef is from cattle produced with growth hormones or fed genetically modified corn, respectively; of [START_REF] Bond | Understanding consumer interest in product and process-based attributes for fresh produce[END_REF] when studying in the USA, using factor and cluster added to the work of [START_REF] Stigler | The Economics of Information[END_REF]Stigler ( , 1962) ) and Nelson (1970) responsible for the first works that dealt with the categorization of the information provided to the consumer. The first named as search attributes those characteristics a consumer can verify just by looking at the product. The latter went further introducing those characteristics that can only be evaluated after the product's consumption.

analysis, the choices several consumers' segments make about fresh produce and what they are willing to pay for several process-based attributes -organic and alternative production systems are important differentiation factors, but as the cluster analysis indicates, customers are primarily motivated by a number of private attributes not necessarily related to organic production, although importance of attributes is somewhat heterogeneous across groups. In fact, local production appears to be more valued than organic production, and the pesticidefree attribute ranks highly for at least three clusters; of [START_REF] Bougherara | Eco-labeled food products: what are consumers paying for[END_REF] when investigating, through the BDM procedure, whether the premium french consumers (Dijon region) were willing to pay for an eco-labeled bottled orange juice, was driven by selfish or altruistic motives -the WTP a premium for an eco-label appears to be motivated by the desire to contribute to a public good for purely altruistic reasons, or selfish motives other than food taste or safety; of [START_REF] Loureiro | Assessing Consumer response to protected Geographical Identification Labeling[END_REF] when assessed spanish consumers' response to a PGI label (Galician veal) using the hedonic price technique -they concluded that if the label is present on high quality cuts of meat, one can obtain a premium up to a certain level of quality and suggested that the PGI can be an effective signal of quality only when in combination with other indicators or signals of quality (price, place of purchase).

The Ecolabels, present for the past ten years in industries such as agriculture, fisheries, forestry and energy, are a way to incentivate both producers and consumers to make environmental improvements. An eco-label credibility relies completely on the consumers trust, being an extrinsic cue that signals exclusively credence attributes. But the consumers trust in them can be affected by several other aspects such as the search and experience attributes of the labeled products [START_REF] Grolleau | Giving credence to environmental labeling of Agro-Food Products: Using search and experience attributes as an imperfect indicator of credibility[END_REF]. The authors state that consumers form expectations about the levels of search (e.g. less packaging) and experience attributes (e.g. better taste) based on the presence of an ecolabel and their subsequent evaluation of these attributes will influence the credibility of the environmental claim and their interest in repeat purchase of the product based on its environmental soundness.

Blend and van Ravenswaay (1999) performed a household survey and measured consumer demand for ecolabeled apples (ECO label and IPM label). The authors found that over half of respondentes were willing to try ecolabeled apples for the first time and that environmental concern significantly affected quantity purchased but food safety concerns didn't. Consistent with these results were the ones from [START_REF] Loureiro | Will consumers pay a premium for eco-labeled apples?[END_REF]. These authors carried out a survey in a grocery store setting in Portland (USA) where the consumers had to choose between regular, organic and eco-labeled apples. WTP for eco-labeled apples was here calculated through a double bounded logit model and the authors have concluded that being female, the presence of children under the age of 18 in the household, and the interaction of food safety concerns and attitudes about the environment positively affected the likelihood that a consumer will pay a premium for eco-labeled apples (ibidem, 2002).

But is there another side of the coin for ecolabled products? [START_REF] Bougherara | Can labelling policies do more harm than good? An analysis applied to environmental labelling schemes[END_REF] think that sometimes the net effect on the environment can be worse than the initial situation without ecolabelling, because the environmental unit improvement is compensated by an over-consumption of environmenatlly sustainable products. Therefore, in their analysis and in order to prevent this negative effect, the authors stress the need of complementary measures e.g. educating consumers or taxing products.

Another two well-known labels that signal credence attributes, are the organic and fair-trade labels. In 2005 researchers at INRA carried out a study intended to measure the wilingness to pay (WTP) for "organic", "fair-trade" and "organic fair-trade" labels [START_REF] Tagbata | Measuring consumer's willingness to pay for organic and Fair Trade products[END_REF]. Their work tried to measure the value of the environmental or social dimension of a product using the BDM mechanism. Their findings showed that nearly one half of the consumers (of the sample) were insensitive to the presence of "organic" and "fair trade" labels on a product, appearing the price as the first criterion on which the choice of the products was based. For this segment the ethical arguments associated with the "organic" and "fair trade" labels were pushed into the background, behind other criteria like the taste and health issues.

However, the survey showed that for two other segments of consumers, these labels have a positive impact on the perception of the quality of the products which is materialized by a valuation of these labels corresponding to 20-30% of the product price (idem, 2008).

Experimental markets

The experimental markets design, described below, was defined.

The aim of this experiment was to measure the consumers' willingness to pay (WTP) for apples and for a processed product (apple juice) produced with less pesticide. We also wanted to measure the impact of the cues which are the guarantee of the diminution of the pesticides' use (IPM label -Integrated Pest Management -private or public certification, organic label, PDO label -Protected Designation of Origin).Another aim was to see if the potential diversity in consumer behaviour was depending on geographical location.

Finally, with this study we also wanted to compare two different methods to obtain the WTP:

one direct method (direct sales with different prices with the Becker-DeGroot-Marschak (BDM) procedure 2 and an indirect method (choices between different size's lots of the preferred apple and any other apples).

The markets included both fresh products (apples from the two varieties Royal Gala and Granny Smith for Portugal's experience and Golden for the France's experience) and processed ones (apple juice). In order to see the impact of the cues, we used different apple types with different quality's certifications: i) Regular apples; ii) Integrated Pest Management (IPM) apples; iii) Retailer brand (the retailer requires IPM quality of his suppliers) apples; iv)

Protected Designation of Origin (PDO) apples; v) Organic apples.

The regular apples correspond simply to the respect of the national legislation for the pesticides' use. The IPM apples correspond to a controlled reduction of these pesticides as compared to the existing legislation. This control can be done by the government (IPM label), by the retailer (retailer brand) or by the specific area producers (PDO label). The organic apples correspond to a total lack of the synthesis pesticides in the context of organic farming.

Apples were presented to the consumer with their labels (or without in the case of the regular apples which did not have any label). The labels were different in Portugal and in France (because of the language and of the country regulations):

-The IPM apples are defined as 'Protecção Integrada' in Portugal and as 'Production Fruitière

Intégrée' in France.

-For the retailer brand apples, we worked with Auchan in Portugal (the label is: 'Vida Auchan, Qualidade Sustentável', i.e. 'Auchan's life, Quality Preservation') and with Carrefour in France (the label is: 'Engagement Qualité Carrefour', i.e. 'Carrefour's Quality Line').

-For the PDO apples, apples used in Portugal were from the 'Alcobaça' area and the one used in France were from the 'Limousin' area.

Also, we used different apples types in Portugal and in France. In the case of the Portuguese experience, we were careful to take into account the heterogeneity of tastes that can be observed in this market. For that, we asked to the consumers to make an advance tasting of 2 Becker, G., DeGroot, M., Marschak, J. (1964). "Measuring Utility by a Single-Response Sequential Method".

Behavioural Science, 9: 226-232.

two varieties: type "tart" with the Granny Smith variety and type "sweet" with the Royal Gala variety. These precautions made it possible, not only to limit the number of systematic refusals to purchase during the experiment, but also to prevent having consumers that proposed a purchase price equal to zero in whatever the selling situation.

In France, we proceed a bit differently. Thanks to the Portugal's results, we knew that around half of the participants would take the "tart" type apples (Granny Smith) and that the other half would take the other type: Royal Gala and particularly, we knew that no consumer was really against one type. So we decided to use only one variety but a quite common variety.

We decided to work with the Golden variety, which is the most consumed type in France.

Furthermore, to avoid any problem, we asked to all the participants which type of apple they usually consume and recruited only the one who answered at least the Golden type.

The other difference is the size of the apple. In Portugal, all the apples had the same calibre although in France, calibres were a bit different: the organic apple was a bit smaller than the other. So we had to add one small apple in order to not have just one small apple in the French experiments.

We also wanted to know the impact of pesticides reduction on a processed product: the apple juice. The different levels of pesticide reduction were: i) "Regular juice": juice obtained from regular apples; ii) "IPM juice": juice obtained from IPM apples; iii) "Organic juice": juice obtained from organic apples.

In both countries, the experiment included three stages:

Stage 1. Sales of apples

The objective of this stage was to measure consumers' WTP for pesticide reduction and to show how the results depended, or not, on a modification both of the intrinsic characteristics of the products (variety of apple, organoleptic quality, size, etc) and also of the extrinsic aspects (brand and origin of products). This is an important result when it comes to discuss how much the producers should reduce the pesticide level regarding the potential gain that can be obtained through a reinforcement of taste.

In Portugal, a lot of technical specifications regarding the characteristics of products were also measured in order to know their relevant characteristics ("Brix", acidity) and to estimate the correlation between WTP and these characteristics. With these measurements, we saw that the WTP is perfectly correlated to the hedonic note. We also saw that for the Royal Gala (variety with more sugar than the Granny Smith the WTP is positively correlated to the "Brix" and the WTP is negatively correlated to the pH and that this is the opposite for the Granny Smith. So, because we had already these answers, we didn't do all the physicochemical measures in Dijon.

Stage 2. Sales of apple juice

The aim was to measure how the consumer response might be different according to the reduction of pesticides in the processed material. The changes verified in the WTP were then compared with those obtained previously with apples sales on stage 1.

Note that for stage 1 and stage 2, the value elicitation mechanism used was the Becker-DeGroot-Marschak mechanism.

Stage 3. Choice of apple lots

This stage assessed the robustness of the results obtained in comparing them to a situation of exchange (valuation of the Willingness to Exchange, WTE). The principle was the following.

Based on the results obtained in stage 1 of the experiment, it was possible to identify the preferred alternative of each consumer. Each participant was then informed that this new stage consisted in making choices between different quantities (in Portugal) or weight (in France, because of the size differences) of apples of their preferred apple and the other apples.

The results obtained under these hypothetical trades allowed us to reconstitute the WTP of each consumer for the various certifications proposed. Thus, it was possible to measure the robustness of the WTP obtained in stage 1 of the experimentation.

Principal results

We show that there is a consumer WTP for pesticides use reduction (a premium for product with specific signal) and that specific information on pesticide use increases this WTP mainly for organic product. The most important result is that the specific information decreases the WTP for the regular product. Then it seems more rigorous to treat the results in terms of "premium against the regular product", anticipating the loss of market share for the regular product.

We showed that the most valuated cues for pesticide reduction is organic label. In Portugal, the premium for organic is 96.4% and for France is 72.5%. IPM certifications have also a high premium. However, producer's guarantee is more credible than retailer's. Moreover, we noted that sensory information may have a strong impact which should not be overlooked.

Protocols presentation

The aim of these experiments was the same in the two countries. After the first experiment in Lisbon, we changed a little bit the protocol for Dijon in order to improve this protocol according to Lisbon's results. That's why there are few differences between the 2 protocols.

Participants and session

The experimental protocol design was first applied in Portugal, in Lisbon, to 102 consumers and then in France, in Dijon, to 107 consumers.

In Lisbon, the experiments took place in the Agronomic University building. In Dijon, we worked in the INRA's sensory analysis room; INRA is the National Institute of Agronomic

Research.

We did 11 sessions in Lisbon and 10 in Dijon (because the room was bigger in Dijon: we were able to receive 10 people maximum in Lisbon and 16 people maximum in Dijon). The session lasted around 1h30; it was at 2.30pm, 6pm and 8.30pm in Lisbon and at 3pm and 6pm in Dijon.

The recruitment

Participants were randomly recruited from the general population, according to a set of criteria, specific to this type of experience. For the recruitment, the same questions have been asked to the participants in Lisbon and in Dijon in order to have the same information about the consumers. The questions asked were about: i) apples consumption frequency; ii) participant's role in the food shopping in the family; iii) knowledge about apples prices.

We have especially assured that the participants were regular buyers of apples (at least once a week). If the answers met the criteria, i.e. the frequency consumption was at least once a week, participant was doing the shopping sometimes (at least once every two months) and the answer to the price they think for 1kg of apple was less than 5€ , we asked for all the sociodemographic data.

All the consumers recruited received a letter with explanation about the experiments but there were nothing said about pesticides. In this letter, it was explain that the subject of the study was the valuation of apples coming from different types of production.

Experimental procedure

As we said above, we used different apples that were distinguished by their labels:

-The producers' IPM apples were defined as 'Protecção Integrada' in Portugal and as 'Production Fruitière Intégrée' in France.

-For the retailer quality apples, we worked with Auchan in Portugal (the label is: 'Vida Auchan, Qualidade Sustentável', i.e. 'Auchan's life, Quality Preservation') and with

Carrefour in France (the label is: 'Engagement Qualité Carrefour', i.e. 'Carrefour's Quality Line').

-For the IPM apples guaranteed by a specific producer's area, we used a 'Protected Denomination of Origin' certification (PDO). Apples used in Portugal were from the 'Alcobaça' area and the one used in France were from the 'Limousin' area.

Thus, we showed how the same guarantee of pesticide reduction may have different results

whether it is provided by an ensemble of the chain upstream farmers (within the Integrated Pest Management charter or the framework of a denomination of origin) or by a retailer brand (the retailer himself assures that the farmers respect the pesticide reduction imposed).

For the five certifications (Regular -IPM -Retailer -PDO -Organic), we used five apples in Lisbon (one of each) but in Dijon, we had to use one more because of the difference in apples' calibre. Indeed, the organic apple we used in France was in a smaller calibre than all the other, so to decrease the impact of the size on the consumer perception, we add another small apple (which was actually the same as the organic one but without the label).

As we said above, there were three stages in the protocol: apples sales, apple juices sales and choices between sets of different types of apple.

At the end, there were the drawing lots. This part has been done to involve the participants properly in the experience; this is a proper part of the BDM mechanism. Because they are liable to buy one product, the participants are supposed to be more precise in their answers.

A. Stage 1

In this first stage, there were 4 steps. Il all steps, the consumers had to answer to the same question: "What is the maximum price you are ready to pay to buy 1kg of this apple?" but with different information.

-1 st step = intrinsic characteristics At this step, the consumers did not have any information about the apples. This was a 'blind tasting'. The only information was the name of the variety because the participants can know it just by looking at the product. After the evaluation, the participants gave the maximum price they were ready to pay for 1kg of each apple they had tasted. At the end of this step, each consumer has given a maximum purchase price for 6 different apples.

There was a difference between Portugal's and French's experiments for this step. In Lisbon, participants had to taste 6 apples from two different varieties: 3 Granny Smith and 3 Royal Gala. In the two varieties, there was: 1 regular apple, 1 IPM apple and 1 organic apple. In Dijon, participants had to taste 6 apples from the same variety (the Golden variety). The apples were: 1 regular apple, 1 IPM apple, 1 retailer quality apple, 1 PDO apple, 1 organic apple and 1 small regular apple. Apples were evaluated 3 by 3, it means variety by variety in Lisbon and all the 6 simultaneously in Dijon.

In France, the whole experiment was carried on using only the Golden variety. In Portugal, for each participant, the prices' mean of the 3 apples for each variety has been calculated in order to find the preferred variety. If there were 2 equal means, the variety with the apple with the higher price was chosen. And in case of equality between the two first prices, the variety with the third higher price was chosen and so on. Only the preferred variety (Granny Smith or Royal Gala) was then used for the next steps.

Finally, in this step and only for Portuguese participants, they had to answer to a sensory analysis questionnaire: colour, texture, flavour and global taste.

-2 nd step = extrinsic characteristics without information Then, in Lisbon, participant had to taste five different apples from their preferred variety: regular apple, IPM apple, retailer apple, PDO apple and organic apple. They had to taste six different Golden in France: the same one and one small regular apple.

The five (Portuguese's case) or six (French's case) apples were presented simultaneously to the participants with their labels. No information was given to the participant and they were not allowed to taste the products. They were asked to evaluate the apple in looking at, in touching at, in smelling at but without eating it and to answer to the question: "What is the maximum price you are ready to pay to buy 1kg of this apple?"

B. Stage 2

The principle was exactly the same than the method which was used in the apple sales: BDM mechanism. The difference was that the participants did not have the product in front of them to make the valuation but only the labels of the products.

They had to answer to the following question: "What is the maximum price you are ready to pay to buy 1 Litre of this apple juice?" in looking at the 3 labels they had in their hands.

The different juices were issued of different apples: one regular apple juice coming from regular apples, one IPM apple juice coming from IPM apples and one organic apple juice coming from organic apples.

C. Stage 3

For this stage, we used the preferred certification defined at the end of the 4 th step of the apples sales. The participants had all the information, they had the apples still on their table and they were allowed to taste the fruits again.

In this part, each participant had to make choices: i) between 1 fixed set (6 units in Lisbon and 1kg in Dijon) of his preferred certification and increasing sets of all the other certifications;

ii) and then between decreasing sets of his preferred certification and 1 fixed set (6 units in Lisbon and 1kg in Dijon) of all the other certifications.

The difference between Lisbon and Dijon was due to the difference of apples size in Dijon. Finally, each participant drew lots for a sales or a choices situation. This drawing lot at the end was explained to the participants at the beginning to involve them. They knew that they were a possibility fro them to buy a product at the end of the session. At this stage, there were 2 possibilities:

-1 sales situation was drawn lots: then the participant was drawing lots for a sale price. If this price was lower than the one he gave during the experience, the participant bought the product at the sale price (i.e. the less expensive). At the opposite, if the sale price was higher than the one given during the experience, the participant didn't buy the product.

-1 choice situation was drawn lots: the participant had to draw lots for one of the 48 lines in Lisbon and for one of the 60 lines in Dijon of the boards and received the apple set he had chosen on this line.

Results

Consumer's WTP after information about cues

With this experimental market, we showed that the most valuated cues for pesticide reduction is organic label. In Portugal, the premium for organic is 96.4% and for France is 72.5%. IPM certifications have also a high premium. However, producer's guarantee (using PDO) is more credible than retailer's. Moreover, we noted that sensory information may have a strong impact which should not be overlooked.

Evolution of WTP for different labels

The following figures (Figures 1 and2) estimate the WTP of consumers for the three main stages of the experiment. The interval of 95% shows the statistical validity of WTP differences between the different logos.

Pesticide info Visual + Stiker

Full info WTP (€/Kg)

In the two countries, we find that the most valuated cues are Organic and PDO. However, note that WTP for PDO is not due to pesticide reduction, because PDO is viewed as a signal of origin or a signal of taste (in our survey conducted in France, 83% of subjects believed that PDO is a taste guarantee!). It further notes that the information on pesticides did not improve the WTP for apples with a certification of origin. This result is found also for the retailer brand: a large majority (60%) of the subjects believed that this label did not certify a pesticide reduction. However, the contribution of the information has not increased the average consumer WTP.

Figure 2 : Mean WTP (95% CI) for Regular, IPM and Organic apples (France)

However, the most important result is that specific information about pesticide decreases the WTP for the regular product. Then it is more rigorous to treat the results in terms of "premium against the regular product", anticipating the loss of market share for the regular product. Figures 3 and4 show the results obtained, for the increasing of premium based on the information on pesticide reduction, in the case of IPM and organic product. We see that the premium given to IPM has increased to 42.6% after the information on pesticide reduction (only 24.6% before the information). Moreover, the premium given to organic apple fell to 55.4% after the information.

Policy Recommendations

In this deliverable, we evaluated the different instruments for signalling the reduction of pesticides, using experimental markets. For our experimental markets conducted in Portugal and France, consumers' WTPs were estimate using the apple example, for three levels of pesticide reduction: i) "Regular": apples produced in the respect of the legal legislation. These apples don't have any cue. ii) Integrated Pest Management (IPM): apples produced with a decrease of the pesticides' use. In our experimental markets, IPM strategy involved three different signals with a "generic" IPM certification, a retailer brand and a protected designation of origin, (iii) "Organic": apples produced without any synthesis pesticides.

We have shown that there is a consumer's WTP for pesticides use reduction (a premium for product with specific signal) and that specific information on pesticide use increases this WTP for organic product but not for IPM product. However, the most important result is that the specific information decreases the WTP for the regular product. Then it seems more rigorous to treat the results in terms of "premium against the regular product", anticipating the loss of market share for the regular product.

With this experimental market, we showed that the most valuated cues for pesticide reduction is organic label. In Portugal, the premium for organic is 96.4% and for France is 72.5%. IPM certifications have also a high premium. However, producer's guarantee (using PDO) is more credible than retailer's. Moreover, we noted that sensory information may have a strong impact which should not be overlooked.

In the different countries, we find that the most valuated cues are Organic and PDO.

However, note that WTP for PDO is not due to pesticide reduction, because PDO is viewed as a signal of origin or a signal of taste. It further notes that the information on pesticides did not improve the WTP for apples with a certification of origin. This result is found also for the retailer brand: a large majority (60%) of the subjects believed that this label did not certify a pesticide reduction.

In summary, the results that we have obtained, confirm that it is possible to assess the alternatives for having consumers contribute to the improvement of environmental practices.

It appears that a public certification of pesticides' reduction is more credible for consumers than a private certification. Therefore it is particularly necessary to signal the efforts made to consumers in terms of pesticide reduction, strengthening public certification and signalling, via logos, this certification. It could also be particularly effective to include environmental efforts (with a certified procedure of IPM) in the appellations of origin.

For the IPM strategy, improving information about pesticides reduction has no significant impact on the WTP. However, information about pesticides' reduction has a significant negative impact on regular products. Indeed, while the labels may convey positive messages to consumers about the production conditions, they may simultaneously stigmatize the conventionally produced products by highlighting perceived problems related to pesticide residues.

  Evaluation of different instruments for signalling the reduction of pesticides, survey of the literature about the role of extrinsic cues which include the pesticide reduction in their production requirements for improving the WTP Pascale Bazoche, Manuela Berjano, Pierre P. Combris, Eric E. Giraud-Heraud, Caroline Hannus, Raquel Maia, Alexandra Seabra Pinto To cite this version: Pascale Bazoche, Manuela Berjano, Pierre P. Combris, Eric E. Giraud-Heraud, Caroline Hannus, et al.. Evaluation of different instruments for signalling the reduction of pesticides, survey of the literature about the role of extrinsic cues which include the pesticide reduction in their production requirements for improving the WTP. TEAMPEST Work Package 4, Deliverable 4.3, 2009. hal-02818735

Figure 1 :

 1 Figure 1: Mean WTP (95% CI) for Regular, IPM and Organic apples (Portugal)

Figure 3 :Figure 4 :

 34 Figure 3 : Evolution of WTP after information on pesticide useWTP after information on pesticide use

Table of Content

 of 1. Introduction: Survey of the literature about the role of extrinsic cues which include the pesticide reduction in their production requirements for improving the WTP................................................................................................................................8 1.1 Experimental markets.............................................................................................11 1.2 Principal results.......................................................................................................12

2. Protocols presentation...................................................................................................12 2.1 Participants and session..........................................................................................12 2.2 The recruitment.......................................................................................................12 2.3 Experimental procedure..........................................................................................13 A. Stage 1...............................................................................................................13 B. Stage 2...............................................................................................................16 C. Stage 3...............................................................................................................16 3. Results...........................................................................................................................18 3.1 Consumer's WTP after information about cues.....................................................18 3.2 Evolution of WTP for different labels...................................................................18 4. Policy recommendations...............................................................................................21 5. References.....................................................................................................................23

Table 1 :

 1 Premium for each apple after complete information about cues

		Generic IPM	Retailer IPM	PDO IPM	Organic
	Portugal	+ 53,6%	+42,9%	+73,2%	+96,4%
	France	+43,6%	+30,7%	+62,4%	+72,5%

Darbi and Karni (1973) defined the concept of credence attributes -the ones that can not be assessed even after purchase and consumption. For instance pesticide residues, nutritional value, organic production. These authors

Deliverable Factsheet

Date: December 2009 Deliverable 4.3 : Evaluation of different instruments for signalling the reduction of pesticides, survey of the literature about the role of extrinsic cues which include the pesticide reduction in their production requirements (brands, label "Bio", Note that at the end of this step, in Dijon, participants had to answer to few questions about their knowledge on labels used in the experiment. The question was: "For all the 6 apples you had evaluated, which guarantee do you think you have: a taste guarantee, an area origin guarantee, a pesticide reduction use guarantee?" -3 rd step = extrinsic characteristics with information At this step, each participant received an information sheet with the information about the label they were seeing on the apples. The consumers had to read the information sheet and then answer to the same question as before: "What is the maximum price you are ready to pay to buy 1kg of this apple?" At this step they were still evaluating apples without tasting them.

The information given to the participants were a bit different in Lisbon and in Dijon. For the regular apples, the information given was that the pesticides quantities used were following the legal instructions. In the case of IPM apples, we had simplified the information given to consumers, stating that it was a halving of the number and amounts of pesticides used in relation to the benchmark of the regular apple in Portugal and that it was a diminution (without any precision of the diminution's proportion) in France. We specified to the consumers that the reduction was certified by the producers. For the retailer quality apples, we said to the consumers that there was a reduction of the pesticides use and that this reduction was certified by the retailer. When it was the PDO apples, the consumers were informed of the pesticide use reduction certified by the producers of a specific area ('Alcobaça' area for Portugal experiments and 'Limousin' area for the French experiments). In France, there were a precision that the reduction is warranted by the state from the PDO label. In the case of organic apples, consumers were informed of the synthesis pesticides use lack.

-4 th step = intrinsic and extrinsic characteristics with all information Participants still had the 5 (Portugal) or 6 (France) apples in front of them. Now they had to taste the apples before giving their purchase prices in answering to the same question: "What is the maximum price you are ready to pay to buy 1kg of this apple?" After this 4 th step, the highest price was spotted to define the preferred certification for each participant. This preferred certification was the reference for the choices in stage 3. In case of equality the preferred certification was chosen by drawing lots.


Marilyne Huchet-Bourdon
email: marilyne.huchet-bourdon@agrocampus-rennes.fr

Angela Cheptea
email: angela.cheptea@rennes.inra.fr

Manrlynp Huchpr-Bourdon

Ancpt A Cffr

Ansrnacr

Informal barriers, agricultural trade, and the Euro Area

Keywords: agricultural trade, informal barriers, monetary union, gravity model. 1 lnrnoDUCTroN

niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.

In May 2004 ten countries from CEE became New Member States (NMS) of the European Union (EU): Cyprus, the CzechRepublic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia; two more joined the Union this year: Bulgaria and Romania. These accessions became possible in particular due to the progress recorded by these countries during a still unfinished transition and convergence process. For newcomers EU membership implies as well the accession to the EMU and the introduction of the Euro, once they fulfil the Maastricht convergence criteria. Unlike for Denmark and the United Kingdom in 1999, there is no opt-out clause for NMS. Therefore, the participation to the Euroland and its effects are a key issue for the latter.

The economic effects of currency unions have long been a center of interest for policy makers and scholars. The literature shows that monetary unions involve both costs and benefits for member countries. The most commonly identified cost is the loss of monetary policy as national stabilization tool. Theoretical work in this direction gave birth to the theory on optimal currency areas. Empirical studies, aimed to measure the costs of monetary unions, and to test theoretical predictions.l The most commonly identified benefit of monetary unions is the increase in trade and investment they might foster. The relationship between monetary unions and trade has been largely explored in the literature.2 Theoretical and empirical works show that the use of a common currency not only eliminates the risks and costs linked to exchange rate fluctuations, but also promotes the convergence of production cycles of the participating countries; both aspects positively affect mutual trade.

Nevertheless, individual sectors are seldom considered in this literature. In this paper we address the link between monetary union and agricultural trade. We choose to focus on trade in agricultural products for several reasons. First, this sector represents a large share of the economy of the NMS. Secondly, trade barriers are considerably larger in the agriculture compared to the industrial sector. Finally, in most current EMU countries this sector has already benefited from specific government policies aimed at reducing the burden of exchange rate fluctuations many years prior to the creation of the EMU.

Moreover, the accession to a monetary union can affect trade also through other, not less important, channels. In this paper we study the link between the membership of a monetary union and informal barriers to trade. By informal barriers we mean poor governance, poor I Mundell (1961), McKinnon (1963), [START_REF] Kenen | The theory of Optimum Cunency Areas: an Eclectic View[END_REF][START_REF] De Grauwe | The Institutional Determinants of Bilateral Trade Pafferns[END_REF], Huchet-Bourdon and Pentecôte (2007). 2 [START_REF] Rose | One money, one market: the effect of common currencies on trade[END_REF], Rose and van [START_REF] Rose | National Money as a barrier to international trade: the Real Case for Currency Union[END_REF], Bun and Klaassen (2007), Micco et al. (2003), De Sousa and Lochard (2006), Gomes et al. (2004), Rose and Stanley (2005).

functioning national institutions, heterogeneity of norms, procedures, and behaviours from one country to another, unfamiliarity with the foreign environment, the lack of information on foreign pattners, preferences, and practices, etc. The planned accession to a monetary union obviously determines the country to undertake some important changes in its policies and institutions, which may translate at the end of the day into less penalising informal bamiers.

Thus, a country aiming to join the EMU may find itself trading at considerably lower costs with other EMU members without making any specific efforts in this direction. The question we ask in this paper is whether the participation to the Euro Area will reduce the effect of informal barriers on new countries' agricultural trade. To answer it, we analyse the effect of three types of variablesthe quality of exporter and importer institutions, their similarity, and cross-border information flowson foreign trade before and after accession.

We base our analysis on Greek imports of agricultural products from partners in the Euro area and third countries between 1996 and 2005. The choice of Greece is motivated by three things: (i) latter accession to the Euro area, (ii) similarity in terms of economic development, geographic location, and share of agriculture in domestic production and employment to the new EU members, and (iii) data availability3. We use a gravity model similar to Anderson and van TVincoop (2003,2004) to measure the effects of informal barriers on agricultural trade before and after the adoption of the Euro.

The literature and the practice suggest that the participation to a currency union usually induces a convergence of economic policies and an intensification of mutual exchange among the participating countries. In line with these expectations, we find evidence of a reduction of institutional and information costs for agricultural imports of Greece after its participation to the EMU. The countryos accession to the Euro zone is followed by a drop in the impact of information flows on its imports from EMU partners, and of institutional aspects on trade with third countries. Lower trade costs due to the use of a common currency compensate for costs induced by imperfect and incomplete information on foreign markets and partners available to economic agents. At the same time, the country's participation to a cumency union introduces a supplementary differentiation among source countries, reducing thereby the importance of other aspects, such as the quality of partner's institutions. Obtained results represent an additional element to consider by new member states from Central and Eastem Europe in their decision to participate or not to the monetary union. The remainder of the paper is as follows. The next section reviews the relations between monetary union, trade, and informal barriers. Section 3 details the methodology. We report our main results and conclusions in sections 4 and 5, respectively.

2 Tsn LITERATURE

Monetary union and trade

The relationship between monetary (currency) unions and trade has been largely investigated in the economic literature, particularly because of its important policy implications. The issue gained in interest on the eve of the EMU creation, as both policy makers and scholars questioned themselves on the effects of a common European currency. The debate was initiated by [START_REF] Rose | One money, one market: the effect of common currencies on trade[END_REF], who found that establishing a common cumency significantly increases trade among union members: member countries trade three times more than similar countries with separate currencies. Several studies, built on the same frameworko provided support of a very substantial effect of currency unions on trade flows. [START_REF] Rose | National Money as a barrier to international trade: the Real Case for Currency Union[END_REF], Rose and Engel (2002), Glick and Rose (2002), etc.) This finding proved to be robust to many adjustments in the dataand the use of different estimation techniques (panel, cross- section, controls for multilateral resistance, volatility, etc.). However, authors caution against the applicability of this result to the EMU. Most countries within a cunency union prior to 1999the ones on which were based all the above studies, despite variations in the country samples employedare small, poor or both, colonial countrieso unlike most of the EMU nations. Balwin et al. (2005) point out that the currency dummy in the above studies measures, therefore, only "whether the abolition of a common currency reduces trade", and that nothing can be inferred about the effect of the creation of a monetary union, such as the EMU.

As a result, more recent studies, including Bun and Klaassen [START_REF] Crmlte | Trade Liberalization and Institutional Change[END_REF]( ), Micco, et al. (2003)), Gomes et al. (2004), Baldwin et al. (2005), Rose and Stanley (2005), De Sousa and Lochard (2006), focus on the specific case of EMU. The trade effect of the Euro is estimated by comparing the trade of EMU members to that of similar third countries, to their own trade before they have joined the union, or both. Again, estimates suggest that the EMU has had a sizable impact on member countries' international trade patterns, although figures are seldom considerably lower than in the previous studies. For instance, Micco, et al. (2003) find that trade has increased by about 4Yo to I6Yo for country pairs that have adopted the Euro. Using a meta-analysis, Rose (200aa) finds that the EMU increases bilateral trade by between 30o and 90%.

But even if the effect of a common currency on trade is well established, the reasons of it are not completely clear. A first and main explanation provided by the literature is lower transaction costs between members of a currency union. The use of a common currency eliminates the risks and costs linked to the conversion of collateral monetary flows and the exchange rate volatility. But this is only a small part of the story. Berger and Nitsch (2005) analyse the impact of the Euro on trade from a historical perspective, using longitudinal data on 22 industrial countries from 1948 to 2003. Taking a long-run view on European integration, they find that the introduction of the Euro has almost no effect on trade once other elements of European economic integration are taken into account. Moreover, they conclude that a significant part of the trend in European trade integration is explained by measurable policy changes. Bun and Klaassen (2007) also note a positive association between the sample period and the estimated impact of Euro on trade. De Sousa and Lochard (2006) argue that part of the effect of cumency unions on trade is indirect, coming from additional foreign direct investments promoting trade.

Informal barriers and trade

Recent works have shown that trade costs are much larger than previously thought, and so even between highly integrated countries (McCallum (1995), [START_REF] Wolf | Intranational Home Bias in Trade[END_REF], Anderson and van Wincoop Q003,2004)). These results generated an increasing interest among economists for the study of less formal trade baniers, such as the lack of reliable information and contacts, uncertainty, unfamiliarity, regulatory, search, contract enforcement costs, etc. We shall refer to the latter throughout the paper as informal bamiers to trade. Gould (1994), Rauch and Trindade Q002), Combes et al. (2005) explore the role of cross-border business and social networks in reducing transaction costs between countries and regions. Anderson and Marcouiller (2002), Jansen and Nordas (2004), and Koukhartchouk and Maurel (2003) illustrate the pro-trade effect of sound institutions. De Groot et al. (2004) and Cheptea (2007) show that not only the poor quality of institutions, but also their dissimilarity between countries act as relevant obstacles to trade. Francois and Manchin (2006) identify institutional quality as a significant determinant of export levels, and of the likelihood exports that will take place at all. Turrini and van Ypersele (2006) demonstrate the relevance of legal costs in displacing trade at both inter-national and intra-national level. Guiso, Sapienza and Zingales (2004) argue that cultural distance or trust is a robust explanator of the volume of international trade. Noland (2005) shows that popular attitudes toward foreign countries convey information about trust, risk, and transaction costs in intemational trade beyond what can be explained via standard economic models. Nicita and Olarreaga (2000Olarreaga ( , 2007) ) and Portes and Rey (2005) insist on the role of information flows in shaping international capital and trade patterns.

All these papers show that informal barriers are an important burden to trade within, but in particular across national borders. The present paper focuses on two types of informal barriers: (i) institutions' quality and similarity across trade partners, and (ii) cross-border information flows.

There is a handful of studies on the role of informal aspects in the particular case of agricultural products. Porto (2005) shows on the case of Moldovaa country heavily depending on agricultural production and exportsthat improving export practices, such as cumbersome practices, costly regulations, and bribes, has a large poverty alleviation impact. Boussard et al. (2004) find that imperfect information in the agricultural sector removes the global gains associated with trade liberalization. Ruijs et al. (2004) illustrate that the reform of market institutions is essential for achieving a substantial improvement of food trade in Burkina Faso. Swinnen et al. (2001) show that changes in Belgium's political institutions during the 20th century have affected the country's level agricultural protection.

Similarly, there are very few studies of agricultural trade employing a gravity approach. Koo et al. (1994) develop a product-level gravity model to determine factors affecting trade flows of meat. Otsuki et al. (2001,2004) use a gravity equation to study the effect of food safety standards and environmental protection on South-North agricultural trade. Paiva (2005) applies the gravity approach to the issue of protectionism and subsidies in agriculture. Kim, et al. (2003) use a dynamic gravity equation and show that the national product differentiation model explains food and agricultural trade more properly. Huchet-Bourdon and Pishbahar (2007) use a gravity model to measure the impact of the Regional Trade Agreements on European agricultural imports.

In this paper we argue that the participation of a country to a currency union is likely to reduce the importance of informal barriers for its foreign trade. Our idea is simple. Economic agents from a country with its own currency treat equally all partners in terms of membership to a currency union. A conversion of payment from foreign to national currency or vice versa in required in all cases. The preference for one currency or another is largely driven by the exchange rate uncertainty, revealed to great extend by the volatility of the exchange rate.

When the country joins a cun'ency union, however, the fact whether the trade partner is also a member of the union or not becomes important. The presence of this previously inexistent differentiation among foreign partners reduces the weight of other characteristics, including information, unfamiliarity, regulatory, search costs, etc. Moreover, the participation to a currency union is usually accompanied by a convergence of economic policies and institutions of the participating countries, and leads to more transparent information. This translates by a reduction of informal barriers for trade with partners within the currency union.

3 MnTHoDoLocYANDDATA

Model

We use a theory-based conditional general equilibrium model similar to Anderson and van Wincoop (2003, 2004). We assume that each country is specialized in one agricultural good, and that the bilateral allocation of trade across countries is separable from the allocation of each country's production and consumption levels. Consumers maximize a CES demand structure under the budget constraint. Trade costs are assumed proportional to trade, and are broadly defined to include all costs incurred with getting a good to a final user, other than the production cost of the good itself : tù = dii" 'exp(landrv').exp(RTAur').exp(MUrvu).exp(volrv').exp (institqlt,'u) .exp(institqlt,r').exp(institsimijvr).info,iro (l) d, stands for the bilateral distance between i and j, landu, RTA., and MUu are dummy variables accounting respectively for a common land border, the existence of a legional trade agreement between the two countries, or the membership to the same monetary union. vol, is the volatility of the official exchange rate between the two countries' currencies, and the last three variables of [START_REF] Gomes | The Euro and Trade: Is there a Positive Effect ?[END_REF] capture the effects of informal trade barriers. instqlt, and instqlt, stand for the quality of institutions in country l, respectively j, instsimu accounts for the similarity of institutions in the two countries, and info, rcpresents the information flows between i and j.

Thus, a supplier from country i receives p, monetary units for a unit of agricultural good sold to consumers in country7, while the latter PaY pu=p,.tu for the same good. Imposing market-clearing, the model predicts the following value for imports of agricultural products of countryj fi'om source country i: r _Y, . E,.I tu l'-"

(2)

Ir ytr [P, .tr,,/ where Ii is the agricultural production of country i, $ is the total expenditure of country j on agricultural products, I" is the world agricultural incomeo o is the elasticity of substitution between any two import sources, P, is a non-linear price index specific to source countryi:

(3) and il, is a weighted average import price -across trade partners -of agricultural goods from country i:

", = [Tb,f"]o = [T,o,',F] ",=14#[+)- l-o (4)
As in traditional gravity models, equation (2) establishes a positive dependence between the economic size of each country and the value of goods traded between them, and a negative one with respect to the bilateral trade cost or banier. However, what actually counts are relative trade barriersrelative to the average price of imports of countryT from all sources, and to the average price of goods exported by source country i to all partners. This aspect is reflected by the inclusion of the multilateral resistance terms P, and fI, at the denominator in equation ( 2).

Integrating the trade costs function [START_REF] Gomes | The Euro and Trade: Is there a Positive Effect ?[END_REF] in equation ( 2) and taking the logarithm, we obtain the final trade equation:

lnT, = ln\ +lnE.,-ln\ + (o-t)h.e, + (o -t)mn , -(o -l)yrlnd, -(o -r)yJand, -(o -l)vRrA, -(o -t)yoMu, -(o -l)yrvot, -(o -l)ruinstqlt, -(o -l)y',instqlt , (5)
-(ol)yrins * im,, -(o -l)yn In info u that we shall use for estimations in section 4. I 3.2 Measuring the multilateral resistance terms

A key insight of the theory is that bilateral trade depends not only on bilateral trade costs /,, , but also on importer and exporter multilateral resistance (or remoteness) P, and I..a The laffer have only been recently intloduced in empirical studies, and few methods exist to proxy these variables. Wei (1996) computed country-specific remoteness indices as the ayerage distance of a country to its partners, weighted by the partners' share in world GDP, and introduced them in a trade equation in order to control for the absence of other trading pafiners close to hand (the famous case of Australia and New Zealand). Similar measures of multilateral resistance were used latter by Helliwell [START_REF] Frankel | Regional Trading Blocs in the World Trading System[END_REF][START_REF] Frankel | Regional Trading Blocs in the World Trading System[END_REF], Deardorff (1998),

Soloaga and Winters (2001), Clark and van Wincoop (2001( ), Rose (2004b)), Wagner (2003) and others. In all these studies the remoteness refers to a country's distance from world markets, and has a positive impact on trade: the more remote a country is, the more it will trade with a partner of a given distance, because it has less trade diverted away to closer countries.

Anderson and van Wincoop (2003) point out the lack of theoretical foundations of these measures, and suggest replacing the multilateral resistance indices with country-fixed effects.

Hanigan (1996), Hummels (1999), Hillberry and Hummels (2002) also estimate gravity trade equations with country fixed effects. Baldwin and Taglioni (2006), Subramanian and Wei (2007) work with panel data and use time-varying importer and exporter effects.

In this paper we use a data panel covering Greek imports from all its partners during a ten(year time period. The use of exporter-specific fixed effects is not a satisfactory solution in this case. Time-varying fixed effects cover the entire dimension of the data and can alone explain all trade flows. The use of fixed effects constant across time is also constraining as they capture a lot of the variance of the explanatory variables (distance, institutional variables). Therefore, we choose to compute resistance terms according to the predictions of the theoretical model. Since in this paper we focus on Greek imports only, there is no need to compute importer's (inward) remoteness. It varies very little across the period and is quite accurately captured by the constant term.

First, we calculate the average trade-weighted price of imports of goods from i to all partners as an approximation for the outward resistance fI, :

o Wei 1tleq, Deardorff (1998), and Anderson and van Wincoop (2003) emphasize that the standard gravity model might have been misspecified in ignoring a multilateral resistance or remoteness term.

Znirur; j Iruri Zrupi tr, =I k i,.j Irurf (6) i,.i,k mf,! is the value of imports ofj to i of product fr; bilateral prices n!, are unit values obtained as the ratio of imports expressed in value terms and imports for the same trade flow in volume terms. This method is consistent with the definition of multilateral terms: the outward resistance term f[, captures the average trade resistance faced by exporting country's goods.

Secondly, we compute the term fI, according to equations ( 3) and (4), using an elasticity of substitution o =3, in line with the literature on agricultural trade:

",=T[T[ h)'" (7) Yj YW Iruri lmrf i,j,k
p! is the production price of good fr in the exporting country d computed as the average export price of goo d kby country i to all its partners lpi;nxrf p! = (8)

EXPt:

with f,!, standing for the unit value of exports of product fr of country i to partneri, and EXPiI is the value of exports from i to j.

Multilateral remoteness is computed for each country and each year within the considered period. We compute the trvo multilateral resistance terms at product (fr) level, and then aggregate these measures across all agricultural goods to obtain country-level remoteness terms. Average global trade across the period in each product È is used as weights for this aggregation. We expect to obtain positive estimates of the coefficients of multilateral resistance terms in the trade equation (2).

Data

The empirical analysis in this paper is based on Greek imports from 132 source countries, including the I I EMU members, between 1996 and 2005. The data employed is from a number of sources. Agricultural trade is obtained from COMTRADE by summing up 6-digit l0 data according to the HS 1992 classification for all agricultural and food products. Agricultural production and bilateral exchange rates for EMU countries (the first sample) are from the EUROSTAT database. Agricultural expenditure is computed as domestic production less exports and plus imports from all partners. For estimations using the larger sample, countries'

GDPs and annual exchange rates are obtained from World Bank's WDI database. Trade and production data is deflated using the HCPI for the EMU sample, and by countries' CPIs in the case ofthe second panel ofcountries. In doing so, we also adjust for changes in the exchange rate. First we convert USD trade flows in local currency. Then we deflate the obtained series by country-specific (H)CPL Finally, we apply the base-year (2000) exchange rate to obtain the real value of trade flows expressed in USD. Data on bilateral distance and common land border are from the Cepii database. The variable on the membership to a regional trade agreement is constructed according to the WTO's list of declared agreements. It takes the value one for all years and partners who were granted preferential access to the EU market, and zero otherwise. Institutional variables are from a variety of sources. We use the rule of law estimate from Kaufmann et al. ( 2006)'s dataset on governance indicators for institutional quality. The similarity of institutions of the importing and the exporting country is reflected by the same origin of the company law or commercial code, according to La Porta et al. (1999) data. Bilateral information flows for a given pair of countries conespond to the average trade in both directions of newspapers and are obtained from the COMTRADE database, code 4902 in the HS 1996 classification. The exchange rate volatility is computed as the standard deviation of the average monthly official exchange rate between the partner's local currency and the Greek drachma prior to 2001, and the Euro afterwards. We use EUROSTAT data for the fist (EMU) panel of countrieso and IFS data for the second sample to compute these exchange rates.

Rrsur,rs

In this paper, we question whether and how EMU membership affects the impact of informal barriers on a country's agricultural trade. We use data on Greek imports pooled over timefrom 1996 to 2005 -for our empirical analysis. Estimations are conducted separately on two data panels, and the set of explanatory variables is adjusted to the sample of countries considered each time.

First, we focus on intra-EMU agricultural trade. For that, we consider a restrained panel of the agricultural imports by Greece from the other eleven EMU partners. Note, that in this case t1 there are no trade policy barriers, and none of the countries in the sample shares a common land border with Greece. Therefore, we can drop these variables from trade equation ( 5).

Variables specific to Greece are also dropped from the model due to their non significant variation during the considered period. Hence, we estimate the following equation for the imports of Greece from other EMU partners:

lnlM\o^r,, = ào+ ârlnY,,, + ûrlnfI,., + ârlnd,o^, + àuMU, + â'vol,oor., + âuinstqlt,., + ûrinstsim,o^r., + &rinfo,o^r., * ê,.,

Secondly, we look at the agricultural imports of Greece from I32 partners for which data is available (both EMU members and third countries). In this case all right hand side variables from the trade costs equation ( 1) are included:

lnlM\oor., = âo + â,lnGD\,, + â,InfI,,, + â,lnd,o^, + âoland,on + âsRTA,cRc,, +â6M(Jickc,t+ârvol,on.,+ârinstqlt,,,+âninstsim,oor.,+âroinfo,on,,*û,on,,

Note, that in the latter case country agricultural production is replaced by country GDP due to the lack of intemationally comparable data for alarge number of world countries.

Table I shows results for agricultural imports of Greece from EMU partners. We obtain coefficient estimates on production and distance in line with findings in the literature, both in terms of value and significance. We also fînd that multilateral resistance, computed as the average import price, has a positive and highly significant effect on trade, as implied by the theoretical model. Using non-linear price indexes instead yields lower and less significant values, but leaves unchanged the coefficients ofthe other explanatory variables. lnstitutional variables are always significant and with the expected sign, confirming previous results in the literature that better and similar institutions promote trade. The use of cross-border information flows as explanatory variable introduces a significant multicollinearity bias.

Therefore, we estimate first average bilateral trade with newspapers on countries' GDP, bilateral distance, institutional quality and similarity, and then use the obtained residuals as a measure of the intensity of informational flows between the two countries (columns 4 andT).

The coefficient on this variable represents the increase in trade generated by the part of information flows and which can not be explained by the other variables of the model. Results

show that the quality of institutions is the most important informal barrier which affects Greek imports from EMU partners during the studied period. EMU membership and exchange rate volatility have a significant impact on trade only when informal barriers are included in the l2

Explained variable : Ln import

(3) (4)

(5) (6) (7\

(1)

(2) (2005) for the same sector (agriculture) using a panel of 19 industrialized countries. The quite puzzling positive coefficient on exchange rate volatility in Table I may actually reflect a general time trend in the data.s Thus, one may affirm that the positive effect of EMU can be partially attributed to the increasing intra-EU economic integration across time, too.

Unfortunately, we cannot use year dummies to control for this effect, as it would cause the non-identification of the parameter on country's membership to the EMU. Therefore, in order to shed more light on this matter, we analyse the effect of the Euro on Greek imports using a larger sample of countries.

Estimation results for the second panel of observations are presented in Table 2. Note, that in this case we have alarger set of explanatory variables than before. We add a dummy variable s Indeed, within the considered panel this variable does not vary across countries from 2001 on, when Greece adopted the common European cuffency. Still, the literature shows that exchange rate uncertainty, proxied by volatility variables, may have a positive effect on bilateral trade under certain conditions, such as trade hysteresis. l3 for a common land border, and another for regional trade agreements, in line with equation (10). An OLS estimation technique correcting for the conelation of residuals of the same trade partner is employed. As previously, the coefficient estimates of standard gravity variables are highly significant and very close to values found in most empirical studies. We also find the expected negative effect of exchange rate volatility on trade. The common land border and RTA variables have a positive and significant effect on trade, however significantly larger in magnitude than suggested by the literature. Thus, according to Table 2, Greece imports on average between 7l=exp(1.926)-Il and 14.51=exp(2.678)-ll times more of agricultural products from the four countries with which it shares a land border than from other similar partners, while a preferential access to the European market more than doubles a country's exports to the Greek market. The positive effect of Greece's accession to the Euro area on its trade with EMU partners is more prominent in this case, and appears even when no control of informal bamiers is included (column l). Estimated coefficients, when significant, remain unchanged when the two currency cost variables are excluded from the estimation (columns 5 to 7). Joining these findings with those from Table 1, we conclude that Greece has increased its imports from EMU partners not only after, but also due to having joined the Euro zone. However, even in this case it is important to control informal baniers, since EMU members possess on average better institutions.

Still, the pro-trade effect of the EMU in Table 2 is well above the values usually found in the literature6. This is due to the fact that our EMU dummy captures a large part of the EU membership effect. The data panel employed does not permit a good separation of the two effects due to the high correlation of explanatory variables. Eleven of the fourteen EU paÉners of Greece are also in the Euroland, and the average quality of national institutions of the latter is significantly higher than that of Greece's non-EU trade partners. Therefore, a binary variable controlling for EU membership captures a large share of the variance in the data on institutional and cunency costs. Adding it on the right hand side of equation (10) produces non-significant estimates of coefficients on main variables of interest (column I of Table 2). According to our estimates, Greek imports from EU partners are 9l= exp(2.185) -I ] times larger than imports from third countries. The non-significant value of the coefficient on 6 Despite the large effect ofcurrency unions on trade found by Rose and his co-authors, results are much smaller for the EMU. Empirical studies predict a trade creation effect of the Euro between 50Â and 30%. See partners, 1996-2005 Note: Standard errors in parentheses. *** significant at l%o: ** significant t 5Vo; * significant at l0%o. l5 the EMU variable, however, does not necessarily mean that trade between EMU partners is not even larger.l One can still separate the impact of EU membership on Greek imports using partial estimates as in the case of information flows. The procedure is, however, slightly different in this case, since we deal with a dichotomic variable. Instead of residuals, the probability of a country to be a EU member that can not be explained by the independent variables in equation ( 10) is used as additional explanatory variable. We compute it as the difference between the EU dummy and the probability of a country to be in the EU, estimated with a Probit model and all explanatory variables of agricultural trade discussed above. 8 Results are shown in column 9 of Table 2. The value of estimated coefficients is not statistically different from the first seven columns. Again, we find alarge positive and highly significant effect of EU membership on Greek imports, showing that Greece trades more with all EU partners, even after controlling for the same currency, the quality and similarity of institutions, and information flows. Nevertheless, we are not able to identify the pure effect of EMU on trade. The coefficient of the EMU variable captures the joint EU and cuffency union effect for partners in the Euro zone.

Note, that the pro-trade effect of well-functioning institutions of the partner is considerably smaller when the large sample is used. Contrary to the first panel of observations, the coefficient on common legal origin is always non-significant. This suggests that institutional similarity increases trade only for a high level of economic integration among partners, or in the presence of well-functioning institutions. The difference in the value of coefficients on information flows between Tables I and2 indicates that the latter are more likely to generate supplementary or larger trade flows from non-EMU partners.

Finally, in order to answer the central question of this paper, i.e. how EMU membership has affected the impact of informal barriers on trade, we add separately six interaction terms to the set of explanatory variables considered above. We choose the most complete specification -given by column 4 from Table 2e and display estimation results in Table 3. The first three columns show coefircient estimates obtained with the interaction terms between the M(J,oo, dummy and each of the three indirect measures of informal trade barriers. Estimated values -0.018 -0.497 -0.401 0.071) (1.067\ (r.077) factor reduced to 1.261=exp(0.52)(0844-0se6) lexp(-0.42)(0844-05e6)]. Hence, although we find evidence of a trade-creation effect of the Euro with both EMU and third countries, the pro- trade effect of well functioning institutions has declined. Since EMU members have on average better institutions than outside countries, the latter are mainly concerned by this result. In other words, once Greece has joined the EMU, suppliers from third countries have become more alike in the view of Greek importers. The participation of Greece to the EMU has introduced a common trait for all its paftners outside the union, and has reduced the relative impoftance of the differentiation of partners according to the quality of their institutions.

CoNcLUsroN

The aim of this paper is to learn whether the participation to the Euro Area affects the impact of informal barriers on countries' agricultural trade. We use a gravity model to measure the effects of informal baniers on Greek agricultural trade from 1996 to 2005, i.e. before and after the adoption of the Euro. We consider three types of informal barriers: the quality of exporter and importer institutions, their similarity, and cross-border information flows. The idea behind is simple. The adoption of a common currency is often accompanied by the convergence of economic policies, and institutions of the participating countries, and leads in most cases to more transparent information on markets. This may result in a reduction of informal trade barriers such as institutional and information costs. We employ two datasets to address this issue: imports of Greece from EMU members and its imports from all trade partners.

Several conclusions emerge from this study. Using the small sample, we find that the introduction of the Euro has increased Greek agricultural imports from EMU countries by 82oÂ, which remain sensitive to the quality and similarity of institutions and the availability of information on foreign partners. When all trade partners are taken into account, it is not possible to separate the EMU from the EU effect on trade. Institutional baniers are a smaller burden for bilateral imports in this case, while information flows are likely to increase the number and/or value of the international transactions by twice as much. We also find support for a decrease in informal barriers faced by Greek agricultural imports after the country's accession to the Euro area. More precisely, the introduction of the Euro coincides with the reduction of information costs for imports from EMU partners, as well as of costs linked to the ill-functioning or absence of relevant institutions in general. Thus, an equal increase in information flows between Greece and any of its foreign partners producers a smaller growth of Greek bilateral imports of agricultural products from that partner when both countries use the same currency. In other words, there is a substitution effect between cunency and t9 information costs. The elimination of currency costs compensates for the poor or inaccurate information available to economic agents from EMU countries. Institutional aspects, meanwhile, have become a less important determinant of Greek imports regardless their origin. Since EMU members have on average better institutions than outside countries, the latter are mainly affected by this outcome. Similar to Baldwin et al. ( 2005), we find evidence of a trade-creation effect of the Euro with respect to both EMU and third countries. Joined with the previous result, this suggests that after 200I improving domestic institutions has become less remunerating for non-EMU suppliers in terms of the value of Greek imports. The latter have increased after 2007, but the distinction between partners with good and poor institutions has dropped in importance.

3

  Slovenia has entered the Euro zone in 2007 and data on its foreign trade is not yet available.

  Baldwin et al. (2005) for an ample discussion.

Table 1 :

 1 Greek imports fromEMU partners, 1996-2005 Note: Standard errors in parentheses. *** significant at lVo; ** significant at SYo; * significant at l0o/o. model. Our data shows that currency union membership has a 82%o[=exp(0.6)-1] trade- crsation effect in the case of Greece. This result is almost twice the estimate ofBaldwin et al.

	Ln production	1.286	|.499	1.380	1.362	1.477 1.376 l 361
		(0.123)** *	(0.1271**'*	(0.126)!**	(0. I 23)***	(0.125)*** (0.126)*** (0.1251***
	Ln outward remoteness	0.802	0.907	0.903	0.850	0.845 0.823 0.767
		(0.079;** *	(0.078)***	(0.075;***	(0.076)***	(0.063)*+* (0.062)*** (0.066)***
	Ln distance	-0.882	-1.009	-1.407	-t.438	-0.954 -1.238 -t.227
		(0.41 3)**	(0.386)**	(0.391***	(0.380)***	(0.380)'k* (0.3821*r'x (0.378)***
	Greece and partner in EMU	0.072	0.388	0.531	0.600
		(0.303)	(0.2e3)	(0.283)*	(0.277)**
	Exchange rate volatility	0.089	0.073	0.132	0.160
		(0.074)	(0.06e)	(0.068)*	(0.067)**
	Rule of Law		1.454	2.310	2.279	1.360 2.068	2.014
			(0.369)**x	(0.439;***	(0.428;*+x	(0.348)*** (0.424)***	(0.41 9)* x*
	Common legal origin			1.054	Ll46		0.871	0.921
				(0.324;x*x	(0.3 17;** *		(0.317)***	(0.3 l3)* **
	Ln information flows (res)				0.103			0.089
					(0.038)'r'**			(0.039)"*
	Constant	8.826 4.750 6.878 (3.748)** (3.639) (3.526\*	-11.277 (4.76T**	5.312 6.966 (3.512\ (3.450)**	-tt.407 4.732)**
	Observations	100	100	100	100	100	100	r00
	R-squared	0.76	0.79	0.83	0.92	0.79	0.81	0.81

Table 2 :

 2 Greek imports from world

Table 3 :

 3 Greek imports from worldpartners, 1996-2005: interaction terms

		Explained variable : Ln import
	(l)	(2)

The correlation coeffrcient between the EMU and EU dummies is equal to 0.59.

Note that the inverse operation, i.e. the use of partial estimates of EMU membership and institutions' quality as a function of EU membership, is not possible since the non-EU membership predicts perfectly the non- participation to the Euro area.e The specification (9) fiom Table2is not used as the reference because one needs to correct also for the correlation between interaction terms and the EU variable. This task requires a lot of additional information, since informal bariers also lower for trade with EU countries.

are almost unchanged with respect to the trade specification without interaction terms. As for the latter, a statistically significant value is obtained only for the coefficient of the M(],o,,, variable interacted with information flows. We find that once both partners share a common currency, information flows are a less important determinant of mutual trade. Indeed, a lo increase in bilateral information flows generates a l3oÂI=@xp(0.232.0.543)-l)l growth of Greek agricultural imports from a non-EMU partner, while only half as much for its imports from a EMU member l7o = (exp((0.232 -0.109). 0.543) -l) l.to Almost half of the value of newspapers exchanged between Greece and EMU countries are with Germany. On average, during the studied period bilateral trade in newspapers between the fwo countries amounted to 5.2 million euros. Using estimated values of coefficients from Table 2, we find that before Greece has joined the EMU, these information flows explained 19%l=l-l/(5.2(ozzz'0s+a);] of Greek imports of German agricultural products, but only I\Yo7=1-ll(5.2tozzz-0 roe)0543) ] in the following years. Non-significant estimates of the interaction terms in columns 1 and2 are due to their high conelation with the EMU membership.

Coefficient estimates with interaction terms between institutional and informational variables and Greece EMU membership are reported in the last three columns of Table 3. As Baldwin et al. (2005), we find evidence of a positive effect of the Euro also on trade with third countries. Greece has increased its imports from all partners on average by 60oÂl=exp(0.471)-11 after it has joined the EMU. The negative significant effect of the interaction term with the institutional quality (column 4) reveals a decrease of its impact on Greek agricultural imports after 2001. The joint result of the two effects for the average partner is positiveits exports to Greece increasebut the preference of Greek importing firms for suppliers from countries with good institutions drops. For example, the improvement in the functioning of national institutions achieved by Turkey from 2001 to 2005 led to a 4.60Âl=exp(0.07)(0844-05e6)/exp(-0.11)(0844-0'5e6) -1] increase in its exports of agricultural products to Greece. An equal change would have produced a 16.5oÂI=exp(0.07)0840/exp(-0.11)otoo -ll growth of Turkish exports before 2001. Similarly, in 2000 Greece imported on average 2.21=exp(0.52)0844 lexp(-}.42)0r++t times more from a country with institutions of the same quality as South Korean institutions than from a country with the quality of institutions equal to those of China. After Greece has adopted the Euro this r0 Computations take into account the explanatory power of informational flows residuals. A l%o change in information (newspaper) flows translatesby 0.543o/o change in residuals.


est destinée au dépôt

Every year, a continuous stream of new varieties is proposed worldwide by peach breeders to fruit growers. However, whereas the demand and needs of consumers show an increase for a fruit production of high-quality free of pesticide residues, very few varieties improved for resistance to pests and diseases or for nutritional quality of the fruits are available on the market. With the objective to create innovative peach cultivars, our group has developed for several years a multidisciplinary research program aiming at (i) improving the resistance of peach to three of its main enemies, i.e. the green peach aphid (Myzus persicae), powdery mildew and the Plum pox virus (PPV), (ii) integrating both organoleptic (sugars and organic acids) and nutritional fruit quality traits (anthocyanins and other antioxidant phenolic compounds). This program takes support on an integrative approach including molecular, genomic and biochemical tools as well as well-tried phenotyping methods.

Mapping and marker-assisted pyramiding of R genes and quantitative resistance factors originating from peach and from a relative wild species (Prunus davidiana) are in progress to achieve durable resistance. Functional studies have been undertaken for elucidating the resistance mechanisms involved. For the resistance to the green peach aphid, a phenolic compound has already been identified as a main effector of the resistance and QTLs controlling its content in leaves and fruits have been identified. For the quantitative resistance to PPV candidate genes have been identified in the QTL regions, among which translation initiation factors such as eiF(iso)4E and eiF(iso)4G. Their validation is in progress.

The improvement of nutritional and organoleptic quality of fruit relies on the same genetic resources as the ones used for resistance to pests and pathogens. Red-fleshed varieties, originating from France and China and showing a different pattern of pigment accumulation along fruit growth, are also used in breeding programs for their high contents in anthocyanins and other antioxidant phenolics.

QTL analysis of fruit-quality traits in progenies developed for resistance to pests and diseases highlight that high levels of antioxidant compounds in the fruit and resistance traits could be introgressed simultaneously from P. davidiana into peach varieties. Furthermore, some phenolics could be relevant for improving both disease resistance and fruit health value.

  The french peach breeding program (INRA): an integrative approach for pest/disease resistance and fruit quality Patrick Lambert, Jean-Luc Poessel, Camille Croset, Marie Noëlle Corre, Bénédicte Quilot-Turion, Veronique Signoret, Véronique Decroocq, David Tricon, Marie-Hélène Sauge, Sylvie Bureau, et al. To cite this version: Patrick Lambert, Jean-Luc Poessel, Camille Croset, Marie Noëlle Corre, Bénédicte Quilot-Turion, et al.. The french peach breeding program (INRA): an integrative approach for pest/disease resistance and fruit quality. 5. Rosacea Genomics Conference, Nov 2010, Stellenbosch, South Africa. 1p. hal-THE FRENCH PEACH BREEDING PROGRAM (INRA): AN INTEGRATIVE APPROACH FOR PEST/DISEASE RESISTANCE AND FRUIT QUALITY GAFL, BP 94 -84143 Avignon-Montfavet Cedex, France, tpascal@avignon.inra.fr 2 INRA, IBVM, UMR GDPP, Virologie, BP81, 33883 Villenave d'Ornon, France 3 INRA, PSH, Domaine St Paul, Site Agroparc, 84914 Avignon-Montfavet, France 4 INRA, SQPOV, Domaine St Paul, Site Agroparc, 84914 Avignon-Montfavet, France