© 1985 Oxford University Press and the Foundation for the European Review of Agricultural Economics
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A super-levy system for the dairy sector: Consequences and alternatives
Department of Agricultural Economics, Agricultural University Wageningen, Netherlands
Summary
The policy decision to introduce a super-levy system for the dairy sector of the EC is compared with two alternatives: a restrictive price policy coupled with a considerable co-responsibility-levy, and a policy with a large decrease in milk price together with direct income transfers for dairy farmers. A benchmark policy, defined as the continuation of the dairy policy used during the period 1976–1983, functions as a basis for comparison with these policy alternatives over the period 1984–1988. Next, the article considers what the result of a policy change starting in 1977 would have been. The periods 1977–1983 and 1984–1988 are dealt with separately. The total effect (over the period 1977–1988) of more appropriate policy decision–making is estimated to be 20 milliard ECU‘s for budget costs and 10 milliard ECU’s for EC income.
In the last part of the article, the consequences for the Netherlands have been investigated. Here, the somewhat different position of this country becomes clear.