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European Review of Agriculture Economics Vol 27 (4) (2000) pp.409-430
© 2000 Oxford University Press and the Foundation for the European Review of Agricultural Economics

Analysis of EU dairy policy reform

Z Bouamra Mechemache and V Réquillart

INRA-MAIA, Castanet Tolosan, France

Summary

The effects of dairy policy in the European Union are analysed using a short-term partial equilibrium model that takes into account the supply of milk, the processing stage and the demand for processed products. Comparative static analysis of the main EU dairy policy instruments is performed to determine the effects of different policy scenarios on price, production, consumption and exports of dairy products, and to compare their welfare impact. Because of the inelasticity of demand, a 1 per cent increase in the quota increase decided as part of agenda 2000 leads to a decrease in EU welfare, and that reducing export refunds would be a better policy for the European Union.

Keywords: agricultural policy, dairy industry, vertical structure, joint production


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