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European Association of Agricultural Economists >
2008 International Congress, August 26-29, 2008, Ghent, Belgium >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/43656
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| Title: | Removing EU milk quotas, soft landing versus hard landing |
| Authors: | Bouamra-Mechemache, Zohra
Jogeneel, Roel
Requillart, Vincent |
| Keywords: | milk quota
policy reform
soft and hard landing. |
| Issue Date: | 2008 |
| Abstract: | This paper analyses EU dairy policy
reforms and mainly focus on EU milk quota removal
scenarios. The model used to evaluate the scenario is a
spatial equilibrium model of the dairy sector. It
integrates the main competitor of the EU on world
markets, Oceania, as well as the main importing regions
in the rest of the world. The paper first assesses the
impact of the Luxembourg scenario in the prospect of a
new WTO agreement in the future. It then provide a
quantitative assessment of the impact of the abolition of
EU milk quotas on the EU dairy sector either through a
gradual phasing out or through an abrupt abolition of
milk quotas. Compared to a status-quo policy, the
Luxembourg policy leads to a 7.6 percent milk price
decrease and a 1.9 percent milk production increase. A
gradual increase of milk quotas as recently proposed by
the European Commission (+ 7% over 6 years) generate
a 9% drop in the EU milk price (compared to the
Luxembourg scenario) and an increase in production by
3.5%. A complete elimination of quotas leads to an
additional 1% increase in production and an additional
3% drop in the EU milk price. As compared to the
baseline scenario, in the Luxembourg scenario in 2014-
15, producers gain 1.3 billion €, whereas in the same year
they lose 2.6 billion € in the soft landing scenario. As
such the direct payments are more than sufficient to
compensate producers for the loss of producer surplus in
the Luxembourg scenario, but fall short to achieve full
compensation in the soft landing scenario. |
| URI: | http://purl.umn.edu/43656 |
| Institution/Association: | European Association of Agricultural Economists>2008 International Congress, August 26-29, 2008, Ghent, Belgium |
| Total Pages: | 13 |
| Collections: | 2008 International Congress, August 26-29, 2008, Ghent, Belgium
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