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Abstract
In the so-called Common Agricultural Policy (CAP) 'Health Check' the European
Commission has recently proposed gradual transitional measures to allow a 'soft landing' of
the milk sector to quota expiry. The aim of this paper is to support policy makers to get better
insights in the implications of some of the most important economic assumptions and
empirical choices made in partial equilibrium models focusing on dairy. Three partial
equilibrium models are considered: the Agricultural Member states MODeling (AGMEMOD)
model, the Common Agricultural Policy SIMulation (CAPSIM) model, and the European
Dairy Industry Model (EDIM). The paper analyzes how the most important economic supply
components, as they are part of the three key dairy models, affect milk production projections.
A main conclusion is that the evaluation of the contribution of a study should not be based on
one single characteristic (such as quota rents, supply responses). One isolated characteristic is
not able to explain finally obtained model outcomes. Quota rents, supply responses, shifters
and the demand side have to be integrated with each other.