Title

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

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

1999

Journal or Book Title

Canadian Journal of Agricultural Economics

Volume

47

Issue

5

First Page or Article ID Number

117

Last Page

130

DOI

10.1111/j.1744-7976.1999.tb00249.x

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.

Comments

This working paper was published as Fuller, Frank, John Beghin, Samarendu Mohanty, Jay Fabiosa, Cheng Fang and Phil Kaus, "The Impact of the Berlin Accord and European Enlargement on Dairy Markets," Canadian Journal of Agricultural Economics 47 (1999): 117–130, doi:10.1111/j.1744-7976.1999.tb00249.x.