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The Impact of the Berlin Accord and European Enlargement on Dairy Markets

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  • Fuller, Frank
  • Beghin, John
  • Mohanty, Samarendu
  • Fabiosa, Jay
  • Feng, Cheng
  • Kaus, Phil

Abstract

Using a world agricultural model, we analyze the impact on dairy markets of the Berlin Accord on the European Union (EU) Common Agricultural Policy (CAP) Reforms. We also investigate the consequences of enlargement of the EU to include the Czech Republic, Hungary and Poland for the same markets. We produce a market outlook up to 2010 for these two scenarios. The Berlin Accord induces lower EU milk and dairy prices. A change in relative prices between cheese and butter-skim milk powder (SMP) occurs after 2005 and induces an expansion of cheese production, consumption and exports at the expense of the butter–SMP sector. Accession of the three central and eastern European countries (CEECs) leads to a permanent but moderate decrease in EU prices of milk and dairy products. For the three acceding CEECs, domestic prices increase dramatically. Their final consumption of milk decreases and dairy product consumption drops considerably. The derived demand of milk in dairy production increases, however, because of the higher prices for dairy products, benefiting dairy producers in these CEECs. Dairy exports of the three acceding countries to the EU–15 increase by one to three orders of magnitude, despite building large inventories. The impact of accession on world markets is small.

Suggested Citation

  • Fuller, Frank & Beghin, John & Mohanty, Samarendu & Fabiosa, Jay & Feng, Cheng & Kaus, Phil, 1999. "The Impact of the Berlin Accord and European Enlargement on Dairy Markets," ISU General Staff Papers 199901010800001257, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:199901010800001257
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    References listed on IDEAS

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    1. A. Pouliquen, 1998. "Agricultural enlargement of the EU under Agenda 2000 : surplus of farm labour versus surplus of farm products [[L'élargissement agricole de l'UE à l'Est : les surplus de main-d'oeuvre contre les su," Post-Print hal-02690900, HAL.
    2. Alain Pouliquen, 1998. "Agricultural enlargement of the EU under Agenda 2000: Surplus of farm labour versus surplus of farm products," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(2), pages 505-522, November.
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    Cited by:

    1. Frank Fuller & John C. Beghin & Jacinto Fabiosa & Samarendu Mohanty & Cheng Fang & Phillip Kaus, 2002. "Accession of the Czech Republic, Hungary and Poland to the European Union: Impacts on Agricultural Markets," The World Economy, Wiley Blackwell, vol. 25(3), pages 407-428, March.
    2. Conforti, Piero, 2001. "The Common Agricultural Policy In Main Partial Equilibrium Models," Working Papers 14806, National Institute of Agricultural Economics, Italy - INEA, Osservatorio Sulle Politiche Agricole dell'UE.
    3. Loy, Jens-Peter & Steinhagen, Carsten, 2009. "Preissenkung und Kompensation auf dem EU-Milchmarkt," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(05-06), pages 1-10, July.
    4. Meilke, Karl D. & Lariviere, Sylvain & Martin, Craig, 2001. "Trade Liberalization in the Dairy Sector: An Overview," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 2(1), pages 1-28.
    5. Scrieciu, Silviu Serban, 2004. "Assessing the Economic Impacts of Incorporating Romania's Agricultural and Food Sectors into EU's Customs Union: An Applied General Equilibrium Approach," Development Economics and Public Policy Working Papers 30543, University of Manchester, Institute for Development Policy and Management (IDPM).
    6. Beghin, John C. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Fuller, Frank H. & Matthey, Holger & Tokgoz, Simla & Wailes, Eric J., 2005. "Impact of the European Enlargement and Cap Reforms on Agricultural Markets. Much Ado About Nothing? The," Staff General Research Papers Archive 12731, Iowa State University, Department of Economics.
    7. 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).

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