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Abstract

Switzerland aims to liberalise the milk market by 2011. This will result in distinctive changes in the basic conditions for agriculture. The impacts of the liberalisation are investigated with a composite model obtained by combining an optimization model for the agricultural sector and a dynamic simulation model for the milk and meat market. The calculations with the composite model indicate that the milk price depends strongly on the phasing out of market support, while the abolition of milk quotas in 2009 is less decisive. An introduction of a dairy cow premium leads to a higher milk production, especially with abolished milk quotas. In this case the European milk price level represents the lower limit for the milk price in Switzerland. Compared to the milk market, with falling quantities meat prices are likely to exhibit a stable development.

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