IDEAS home Printed from https://ideas.repec.org/p/ags/eaa107/6465.html
   My bibliography  Save this paper

Impact Of Phasing Out Milk Quotas On Structure And Production Of Finnish Dairy Sector

Author

Listed:
  • Lehtonen, Heikki

Abstract

We evaluate impacts of milk quota abolition in Finland where production costs and producer price of milk are among the highest in the EU. We analyse several price scenarios for dairy products corresponding to 10-30% reductions in raw milk prices in the EU following milk quota expansion of 2% per year. The sector model includes 18 dairy products and regions and other agricultural activities. Armington -assumption is used in modelling foreign trade. Trade of milk quotas and structural change are endogenous in the model. The results suggest that 10-15% reductions in the EU milk prices would result in less than 10% decrease in Finnish dairy production. Investments to large farm units would still increase. However, if the EU milk prices decreased by 15-20% production would fall by 10-22%. Overall it seems that milk quota abolition is not likely to result in any drastic downscaling of dairy sectors in Finland.

Suggested Citation

  • Lehtonen, Heikki, 2008. "Impact Of Phasing Out Milk Quotas On Structure And Production Of Finnish Dairy Sector," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6465, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa107:6465
    DOI: 10.22004/ag.econ.6465
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/6465/files/pp08le20.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.6465?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Z Bouamra Mechemache & V Réquillart, 2000. "Analysis of EU dairy policy reform," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 27(4), pages 409-430, December.
    2. Zohra Bouamra‐Mechemache & Jean‐Paul Chavas & Tom Cox & Vincent Réquillart, 2002. "EU Dairy Policy Reform and Future WTO Negotiations: a Spatial Equilibrium Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 233-257, July.
    3. Bouamra-Mechemache, Zohra & Jongeneel, Roel & Réquillart, Vincent, 2007. "The Dairy Industry in an Expending European Union: Policies and Strategies," IDEI Working Papers 478, Institut d'Économie Industrielle (IDEI), Toulouse.
    4. Zohra Bouamra-Mechemache & K. Dartigues & Vincent V. Requillart, 2002. "EU dairy policy reform and future WTO negotiations [Réforme de la politique laitière européenne et nouvelles négociations de l'OMC]," Post-Print hal-02670390, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antimiani, Alessandro & Finizia, A. & Henke, Roberto & Manfredi, G. & Merciai, S., 2008. "The impact of the reform of the milk quota regime on the Italian dairy sector," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43658, European Association of Agricultural Economists.
    2. Anthony N. Rezitis, 2019. "Investigating price transmission in the Finnish dairy sector: an asymmetric NARDL approach," Empirical Economics, Springer, vol. 57(3), pages 861-900, September.
    3. Joanna Sredzinska & Pawel Sieminski & Monika Godek, 2021. "Income Situation of Dairy Farms in European Union Countries: A Synthetic Approach," European Research Studies Journal, European Research Studies Journal, vol. 0(3B), pages 993-1011.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zohra Bouamra-Mechemache & Roel Jongeneel & Vincent Réquillart, 2009. "EU Dairy Policy Reforms: Luxembourg Reform, WTO Negotiations and the Quota Regime," EuroChoices, The Agricultural Economics Society, vol. 8(SpecialIs), pages 13-22, April.
    2. Seyed Habibollah Mosavi, 2016. "Energy price reform and food markets: the case of bread supply chain in Iran," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 169-179, March.
    3. Abdessalem Abbassi & Olivier Bonroy & Jean‐Philippe Gervais, 2008. "Dairy Trade Liberalization Impacts in Canada," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(3), pages 313-335, September.
    4. Saunders, Caroline M. & Santiago, J.D., 2007. "An Analysis Of The EU Positions In WTO: Impact On EU And New Zealand," 81st Annual Conference, April 2-4, 2007, Reading University, UK 7960, Agricultural Economics Society.
    5. Grams, Michael, 2005. "Reform der EU-Milchmarktpolitik bei instabilen Weltmärkten," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(03), pages 1-10.
    6. Saunders, Caroline M. & Wreford, Anita & Rasin, Shanika, 2005. "An analysis of agricultural trade policy reforms and their impact on the EU, China and New Zealand," 2005 Conference, August 26-27, 2005, Nelson, New Zealand 98496, New Zealand Agricultural and Resource Economics Society.
    7. Quirino Paris & Sophie S. Drogue & Giovanni Anania, 2009. "Calibrating mathematical programming spatial models [Calibrage pour les modèles spatiaux de programmation mathématique]," Post-Print hal-02754337, HAL.
    8. Abbassi, Abdessalem & Larue, Bruno, 2012. "Multiple Marginalization and Trade Liberalization: The Case of the Canadian Dairy Industry," Working Papers 148592, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    9. Paris, Quirino & Drogué, Sophie & Anania, Giovanni, 2011. "Calibrating spatial models of trade," Economic Modelling, Elsevier, vol. 28(6), pages 2509-2516.
    10. Bouamra-Mechemache, Zohra & Réquillart, Vincent & Soregaroli, Claudio & Trévisiol, Audrey, 2008. "Demand for dairy products in the EU," Food Policy, Elsevier, vol. 33(6), pages 644-656, December.
    11. Alston, Julian M. & Sumner, Daniel A. & Balagtas, Joseph Valdes & Brunke, Henrich, 2004. "Economic Implications Of The Australia-U.S. Free Trade Agreement For U.S. Dairy Markets And Domestic Dairy Farm Programs," 2004 Annual meeting, August 1-4, Denver, CO 20164, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Amanda Norris & John Cranfield, 2019. "Consumer Preferences for Country‐of‐Origin Labeling in Protected Markets: Evidence from the Canadian Dairy Market," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 391-403, September.
    13. Scott Biden & Alan P. Ker & Stephen Duff, 2020. "Impacts of trade liberalization in Canada's supply managed dairy industry," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 535-552, July.
    14. Anania, Giovanni, 2007. "Multilateral Negotiations, Preferential Trade Agreements and the CAP. What's Ahead?," Working Papers 7283, TRADEAG - Agricultural Trade Agreements.
    15. Bouamra-Mechemache, Z. & Chavas, J.P. & Cox, T. & Réquillart, V., 2001. "Price discrimination and EU dairy policy : an economic evaluation of policy options," Economics Working Paper Archive (Toulouse) 23, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    16. Alston, Julian M. & Balagtas, Joseph Valdes & Brunke, Henrich & Sumner, Daniel A., 2006. "Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-22, June.
    17. Aldanondo, Ana Maria & Puertolas, Javier, 2002. "International Quota Transfer and Intermediate Goods," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24851, European Association of Agricultural Economists.
    18. Giovanni Anania, 2007. "Multilateral trade negotiations, preferential trade agreements and European Union’s agricultural policies," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    19. Anania, Giovanni, 2001. "Modeling Agricultural Trade Liberalization. A Review," 2001 Annual meeting, August 5-8, Chicago, IL 20758, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Areal, Francisco J. & Tiffin, Richard & Balcombe, Kelvin G., 2012. "Provision of environmental output within a multi-output distance function approach," Ecological Economics, Elsevier, vol. 78(C), pages 47-54.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaa107:6465. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.