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

  • Fuller, Frank H.
  • Beghin, John C.
  • Mohanty, Samarendu
  • Fabiosa, Jacinto F.
  • Fang, Cheng
  • Kaus, Phillip J.

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 butterï¾–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 EUï¾–15 increase by one to three orders of magnitude, despite building large inventories. The impact of accession on world markets is small.

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File URL: http://www.econ.iastate.edu/sites/default/files/publications/papers/paper_1696.pdf
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1696.

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Date of creation: 01 Jan 1999
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Publication status: Published in Canadian Journal of Agricultural Economics 1999, vol. 47, pp. 117-130
Handle: RePEc:isu:genres:1696
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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