Competitiveness of the EU dairy industry

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Competitiveness of the EU dairy industry

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8.4 Production

Figure 8.1 indicates that the production of the aggregated food industry is not

very much affected by the different policy scenarios. Only for the Liberalisation

scenario (and the subsequent scenarios) the volume of food production strongly

increases in New Zealand and Australia. Here, the dairy industry plays a dominant

role amongst the different food processing sectors. The output under full market

access to the European markets (under Lib) is almost 15 percentage points

higher relative to the baseline and the quota abolition scenario.

Under the EqualGR scenario, food processing increases especially in the EU.

This result indicates that - apart from policy measures such as tariffs and subsidies

- the performance of European food production is mainly determined by

macro-economic trends, such as population and income growth.

Figure 8.2 provides details about the production of the dairy sector under

the different policy scenarios. For the European dairy industry the abolition of

the milk quota regime will lead to an expansion of the output, while under full

liberalisation the output of dairy industries declines, see Lib scenario.

Figure 8.1 Food production volume of selected regions under different

scenarios for 2015, relative to initial level in 2001=100

150.0

140.0

130.0

120.0

110.0

100.0

90.0

80.0

70.0

60.0

50.0

EU Nafta Brazil China Rest of

Asia

Australia

New Zealand

Base Quota Lib HPDairy HPMilk EqualGR

Rest of

world

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