The MAGALI model was built mostly to test alternative price policies, their influence on supply of the various commodities. In the short-term, structural situations are rigid and constrain short-term supply. On account of the inertia of the French production setup, price policies appear poorly suited to bring about a rapid response to an over-supply. Drastic price reductions would be needed to obtain production adjustments within acceptable time-lags. Such reductions would often be politically unbearable on account of their income effects and they could durably affect the French production capacity. These policies are compared with production quotas in the case of milk.
