The 'Milk Quotas Rent Puzzle' in the EU: Economic Significance, Review, and Policy Relevance

In the so-called Common Agricultural Policy (CAP) 'Health Check' the European Commission has recently proposed gradual transitional measures to allow a 'soft landing' of the milk sector to quota expiry. The aim of this paper is to help policy makers gain better insights in the implications of some of the most important economic assumptions and empirical choices made in partial equilibrium models focusing on dairy. Three partial equilibrium models are considered: the Agricultural Member states MODeling (AGMEMOD) model, the Common Agricultural Policy SIMulation (CAPSIM) model, and the European Dairy Industry Model (EDIM). This paper analyses how the economic supply components, as they are part of the three analysed key dairy models, affect milk output projections. A main conclusion is that the evaluation of the contribution of a study should not be based on one single characteristic (such as quota rents, supply responses). One isolated characteristic cannot explain finally obtained model outcomes. Quota rents, supply responses, shifters and the demand side have to be integrated with each other.JRC.J.5-Agriculture and Life Sciences in the Econom

Lighting on the Road to Explore Future Directions for Agricultural Modelling in the EU – some Considerations on what Needs to be Done

In the field of agri-food, impact assessments to support policy decision-making are often based on simulations delivered by models. The increasing complexity of policies affecting the agri-food sector requires improving thecapacities of current models, connect ing or redesigning them to deliver forward-looking insights on policy objectives. The EU-Project ‘Support for Policy Relevant Modelling of Agriculture’ (SUPREMA) has identifiedupcoming needs in the research and policy agenda, while exploring the feasibility of those potential modelling exercises by testing the existing tools. The assessment has pointed out necessities for model extensions anddevelopment of new tools. Besides, it has revealed the potential of model integration and collaboration to supplement the outcomes of individual models. This is supported in view of the food system approach that isbecoming the fundamental framework for analysing the dynamics of the agri -food sector when considering it from a broad perspective. This paper describes shortly how the assessment was conducted and presents the outcomes and lessons learnt from the project. It pays special attention to the challenges and the policy priorities that are expected to become important issues in the policy agenda in the coming years

Management of Disease-triggered Shocks in Complex Value Chains: An Ex Ante Analysis of Market Effects of HPAI Control in the Dutch Egg Supply Chain

External shocks, such as disease occurrence, can be very disruptive in complex food producing value chains. To analyze this, a vertically linked dynamic partial equilibrium model was used to analyze market effects of outbreaks of Highly Pathogenic Avian Influenza (HPAI) in The Netherlands. Various shock inducing scenarios were analyzed, e.g control strategy, demand shocks and trade bans. The results showed that in densely populated poultry areas (1) market effects usually outweigh direct control costs, (2) vaccination could help mitigating total disease costs,particularly if (3) channeling to industrial processing is included. Moreover, large, and in some cases opposing differences in market effects between the various stakeholders could be observed. The result suggest a number ofimportant policy factors that should be considered in HPAI control, e.g. the poultry density, the production structure and differentiation of stakeholders, the dependency on international trade and the potential capacity ofindustrial processing of eggs. General implications for other food producing value chains are discussed

Bringing together stakeholders’ interaction and economic modelling: Recent experiences in designing research and agricultural policy

Policies are becoming intensively interrelated while increasing numbers of societal groups and stakeholders are affected. At the same time, current and future challenges require improved capacity in terms of models, their linkages or redesigns to deliver forward-looking insights on policies. Different stakeholder workshops have recently been applied in two projects to support these activities, including stocktaking, inputs for narratives, feedbacks to outcomes, acceptance of analysis and drafting future research agendas. This paper describes approaches applied in both projects, shortly presents their results and findings to finally draw some general conclusions

Bringing together Stakeholders’ Interaction and Economic Modelling: Recent Experiences in Designing Research and Agricultural Policy

Policies are becoming intensively interrelated while increasing numbers of societal groups and stakeholders are affected. At the same time, current and future challenges require improved capacity in terms of models, their linkages or redesigns to deliver forward-looking insights on policies. Different stakeholder workshops have recently been carried out in the context of two scenario studies to support these activities, including stocktaking, inputs for narratives, validation of the outcomes, acceptance of analysis and drafting future research agendas. This paper describes the approaches applied in both projects, shortly presents their results and findings to finally draw some general conclusions

Effects of selling public intervention stocks of skimmed milk powder

At the request of the Dutch Ministry of Agriculture, Nature and Food Quality, this report analyses the potential market impacts and budgetary effects of different strategies of selling EU public intervention stocks of skimmed milk powder (SMP). A gradual phasing out of the EU's SMP stocks over a two-year period is likely to have a negative impact on the EU’s SMP prices. The use of alternative market outlets reduces the negative price impacts on the regular SMP market, but implies that a significant loss in sales value of SMP stocks has to be accepted. When the stocked SMP ages, at a certain moment there may be no other option than the use of alternative channels to destock and an increasing budget expenditure will then be unavoidable

Phosphate Production Reduction Decree of the Netherlands : impact on markets, environment and dairy farm structure

This research has been commissioned by the Ministry of Economic Affairs. Wageningen Economic Research, an independent research institute, has been asked to assess the market impacts and environmental impacts of the PPRD. The following research questions were defined: Assess the impacts of the PPRD on the dairy market, with special attention paid to: The supply of milk and other dairy products in the Netherlands (including the possibility for imports to replace production eliminated by the PPRD); The stability of markets for milk and other dairy products in the Netherlands; The prices of milk and other dairy products for consumers in the Netherlands. Wageningen Economic Research Report 2017-024 | 7 Assess the effects the PPRD will have on the structure of the dairy farming sector, more specifically on the different types of farming systems (extensive vs. intensive, land-based vs. nonland- based, organic vs. non-organic farming

Risicobeheerinstrumenten in het GLB : bouwstenen voor de Nederlandse positie

Dit rapport analyseert op hoofdlijnen de belangrijkste bestaande en nieuwe risicobeheerinstrumenten in het GLB op eventuele toepassing in Nederland. Voor het risicobeheer zijn allerlei opties beschikbaar die vallen onder instrumenten in de eerste pijler of tweede pijler van het GLB dan wel als overige instrumenten zijn benoemd. De verordeningen van het GLB zijn slechts voor een paar instrumenten een knelpunt voor wat betreft vergroten draagvlak dan wel ontwikkelen van instrumenten. Overige knelpunten vloeien voort uit een te gering draagvlak in de lidstaat. Met name om gevolgschade via onderlinge fondsen te regelen, uitgevoerd door bijvoorbeeld Producentenorganisaties, is bereidheid van de sector en overheid noodzakelijk. Ervaringen in het verleden hebben aangetoond dat dergelijke onderlinge fondsen alleen toekomst hebben indien ze algemeen verbindend worden verklaard, dan wel wettelijk worden geregel