Milk Quota Expiry Impacts and Sensitivity Analyses Using the CAPSIM Model

Various scenarios for an expiry of EU milk quotas are analysed with the Common Agricultural Policy SIMulation (CAPSIM) model. This comparative-static, partial equilibrium modelling tool covering the whole of agriculture for all EU member states has been disaggregated to represent nine secondary dairy products. Impacts are compared to a reference run where the 2003 CAP Reform is projected into the future. The main milk quota expiry scenario is for 2020 that is some years after the likely expiry in 2015. Key results are that milk production would increase by 3.1% in EU27 whereas milk prices would drop by 7.3%. The regional pattern of impacts is strongly determined by the specification of quota rents. Furthermore details of intra EU price transmission are shown to influence the differences between Member States. The resulting decline in butter prices is shown to be larger if EU authorities cannot rely on export subsidies for market management. An applied welfare analysis for the main scenario gives a significant redistribution from EU27 farmers and much less from taxpayers to dairies and final consumers. The small overall loss is inconclusive as some intrasectoral efficiency and environmental impacts gains are neglected.

TONINI Axel;  WITZKE Heinz Peter; 

2009-09-08

Deutscher Fachverlag GmbH

JRC48470

0002-1121,   

http://www.abisz.genios.de/r_fachpresse/daten/agw/20090720/200958228.html,    https://publications.jrc.ec.europa.eu/repository/handle/JRC48470,