Funding

European Commission, Directorate-General Joint Research Centre, Contract no. 150883-2007 F1SC-D

Duration

December 2007 – August 2008

Organisation

Project leader: EuroCARE GmbH

Consortium composed by:

• Landbouw-Economisch Instituut (LEI) B.V., The Hague, The Netherlands
  
• EuroCARE GmbH

Sub-contractors:

• Universita Cattolica Del Sacro Curoe (Unicatt), Alta Scuola in Economia Agro-alimentare , Milano, Italy
  

Objectives

The specific objectives of this study are the following:

• To provide a modelling tool able to simulate the economic effects of the European milk quota scheme on agricultural income, cattle herd sizes, land use at the regional level and market impacts including the processing industry at the Member State level.
• To describe the economic situation of the dairy sector in the European regions under the current regulation (ex-post analysis). This entails a detailed analysis of the existing milk quota regime and its influence on the regional competitiveness of milk producers.
• To analyse the most likely changes in regional competitiveness for milk producers and the likely impacts on agricultural activities related to dairy (i.e. beef production) derived from the abolition of the current milk quota scheme (scenario analysis).

Tasks

The service is divided in four tasks:

Task 0: Written minutes of the kick-off meeting to clarify and agree all the requirements of the study

Task 1: Technical specification of an agricultural sector model able to analyse the abolition of the current milk quota scheme at regional level on:

• Modelling supply and processing of dairy commodities in CAPRI, including description of strengths and weaknesses
• Methodology for quota rent estimation
• Policy support instruments in the dairy sector
• Databases and model output related to dairy

Task 2: Ex post run and 2003 CAP reform policy shift: Calibration and scenario assumptions

• Estimation of quota rents using FADN data and translation to regional milk production marginal costs
• Relevant improvements of CAPRI market model on processing of dairy commodities, demand side recalibration of elasticities and implementation of a intra EU price linkage equation
• Scanario calibration
• Critical analysis of pros and cons for the economic model and databases

Task 3: Ex ante baseline and ex ante quota ablition: Calibration and scenario assumptions

• Description of relevant exogenous variables affecting the scenario results
• Scenario comparison

Additional information: