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Study on the impact of future options for the Milk Quota system and the common market organisation for milk and milk products

Auteur: Guyomard Hervé, Herrard Nadine, Requillart Vincen
Editeur: INRA - Rennes, INRA - Toulouse, Universi
Année: 2002
Pages: 39

"The framework for EU dairy policy has remained unchanged since the introduction of milk
quotas in 1984. Agenda 2000, agreed in Berlin in 1999, includes some adjustments to the
common organisation of the milk market but the main changes (price decreases accompanied
by compensating direct payments and a small increase in quota) are not scheduled for
implementation until 2005/06 to 2007/08. The quota system remains in place until 2008.
What happens after that is not yet decided.
The objective of this study is to perform ex ante quantitative assessments of alternative dairy
policies for the EU. The time period covered by the analysis is from 2000/01 to 2014/15.
During this period, the context will change. In particular, the EU will be enlarged and a new
WTO agreement will be reached. In this study, the impact of enlargement is not considered.
Other studies suggest that its impact on market balance for EU-15 milk and dairy products is
likely to be rather small in the period immediately after enlargement. For the longer term,
there remains much uncertainty about the evolution of both supply and demand in accession
countries. Regarding trade policy, it is assumed that a future WTO agreement will continue in
the direction of the Uruguay Round Agreement by further constraining subsidised exports, as
well as increasing import access to EU markets.
The study deals with milk production and dairy product markets in EU-15. It is based on
models that represent the dairy sector in the 15 EU member states. In each member state, farm
milk supply, milk processing and the markets for 14 different final products are modelled. At
the farm level, the interaction between beef and dairy is taken into account as well as the
dynamics of production due to lagged stock adjustment. All policy instruments at each stage
in the production and marketing chain are represented. The models are used to simulate the
impact on markets and revenues of alternative dairy policies."

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