Economic and environmental impacts of milk quota reform in Europe

2009

This report is based on the outcome of a study carried out by the European Commission's Joint Research Centre - Institute for Prospective Technological Studies (JRC-IPTS, Spain) in cooperation with EuroCARE (Bonn, Germany) and the collaboration of the Agricultural Economics Research Institute (LEI, the Netherlands) and the Catholic University of the Sacred Heart (Unicatt, Italy). The report provides an economic impact assessment of possible implications of the Health Check of the Common Agricultural Policy (CAP), with an explicit focus on regional effects of a milk quota abolition in the EU-27 in the year 2015. For the analysis the CAPRI model was updated with econometric estimates of milk quota rents at regional level and simulation results are presented for the year 2020. The detailed spatial resolution allows identifying regions where economic changes are larger than visible from aggregated impacts at Member State or European level.

2001

An hedonic spatial equilibrium model of the European Union dairy sector is used to evaluate the interregional impacts of eliminating milk production quotas under a variety of domestic policy (intervention prices and domestic production/consumption subsidies) and trade policies (tariff rate quotas and export subsidies). The simulation results indicate that the removal of the EU milk production quotas is welfare improving

2008

Following model calculations presented in this paper he removal of the EU quota system will result in 21% more milk production in the Netherlands. Large dairy farms expand and achieve higher income levels compared to a scenario with quota continuation, as increasing scale of production and decrease of quota costs outweigh price reductions and extra manure disposal costs. Production in the category of relatively small farms, however, declines and farms in this category will leave business. Sector income will only marginally fall while production expansion will remain within the limits of present environmental policies related to manure and nutrient applications.

2015

— This study provides an in-depth model based quantitative analysis of the implications of the dairy policy reform on the milk and dairy market as well as on other agricultural markets in the EU27, EU15, EU12 and the individual MS. The objectives of the study are threefold: 1. to assess the implications of changing policy and market conditions on EU agriculture with special emphasis on milk quota phasing out and export subsidy removal by using a modelling tool; 2. to carry out policy relevant scenarios reflecting deregulation (e.g. quota abolition), changes in quota and price levels, different types and levels of direct payments; and 3. to analyse the implications of policy reform scenarios and to draw appropriate policy recommendations. Based on an overview of the existing approaches used to analyse the dairy market, the necessary adjustments to the AGMEMOD model are developed. Projections are made under a baseline of no policy change for a time horizon of 10 years for selected ind...

Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, 1999

Even if the quota regime has been extended until 2007-08 as part of the Agenda 2000 reform adopted in March 1999, the European Union (EU) dairy sector is currently experiencing large uncertainty over future policy. This paper examines EU dairy policy issues and assesses their likely implications. It mainly addresses the central question of dismantling the quota and intervention support mechanisms. Simulation results illustrate how three factors (marginal costs of production, import tariffs on dairy products and compensatory payments granted to dairy producers) may affect the outcomes of a quota elimination scenario.

This study provides an in-depth model based quantitative analysis of the implications of the dairy policy reform on the milk and dairy market as well as on other agricultural markets in the EU27, EU15, EU12 and the individual MS. The objectives of the study are threefold: 1. to assess the implications of changing policy and market conditions on EU agriculture with special emphasis on milk quota phasing out and export subsidy removal by using a modelling tool; 2. to carry out policy relevant scenarios reflecting deregulation (e.g. quota abolition), changes in quota and price levels, different types and levels of direct payments; and 3. to analyse the implications of policy reform scenarios and to draw appropriate policy recommendations. Based on an overview of the existing approaches used to analyse the dairy market, the necessary adjustments to the AGMEMOD model are developed. Projections are made under a baseline of no policy change for a time horizon of 10 years for selected indiv...

2008

In recent years the CAP has undergone significant reforms, but the dairy sector has largely avoided wholesale changes. The sector, however, is now faced with a significant effort by the Commission to instigate reform. In this study the FAPRI-UK modelling system is simulated to identify the impact of abolishing or phasing out EU milk quotas on the dairy sector in

… 1, 2008, Sevilla, Spain, 2008

The CAP Health Check in 2008 may result in fundamental changes in EU dairy policy. An expansion of the EU dairy quota is being strongly considered as a prelude to the elimination of the quota mechanism by 2014/15. This paper addresses the implications of such a reform for EU and Irish dairy commodity markets. We use a suite of partial equilibrium multi commodity structural models of EU agricultural commodity markets to project the impact of an expansion in the dairy quota on milk and dairy commodity production, dairy commodity prices and milk prices at an EU and Member State level. A number of experiments are conducted involving differing annual rates of expansion of the milk quota using national quota rents from the literature.

2005

This paper evaluates the distribution of short-and long-run marginal costs and quota rents across the EU-15 milk producers, by estimating a system of cost and input share equations on a panel data of dairy farms from 1996 to 2001. Regional and geographical location and the size of milk operations have been considered as the major factors affecting marginal costs. The results on quota rents highlights that Italian and Greek dairy farmers receive the highest economic rent (260 €/ton), while in Portugal the lowest (101 €/Kg) at least in the short-run. This is an indication that Italian and Greek milk supply would be the least 'sensitive' to a reduction in the intervention price. Several countries show negative long-run quota rents, indicating that in the long-run current market prices influence dairy farm's production plans.

EuroChoices, 2006