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Abstract
The study provides an agricultural multi
commodity analysis able to focus and investigate the
ongoing EU milk reform. The analysis is carried with
the Common Agricultural Policy SIMulation (CAPSIM)
model which is a comparative-static, partial equilibrium
modelling tool covering the whole of agriculture of EU
member states. The model provides a reference run
which is a "baseline scenario" where the 2003 CAP
Reform is projected into the future. This scenario is
compared to a "quota expiry" scenario where milk
quotas are abolished by 2015, a "soft landing" scenario
where further quota expansions are envisaged and an
"early quota expiry" by 2009. Sensitivity analysis is
done for different set of quota rent assumptions and
export refund abolition. Key results, under a "quota
expiry scenario" are that milk production would
increase by 2.8% in EU27 whereas milk prices would
drop by 7.5%.