Trade liberalization in international dairy markets
2006
Langley, Suchada Vichitakul | Somwaru, Agapi | Normile, Mary Anne
This report examines issues related to modeling complex policy regimes that affect international dairy markets using a partial equilibrium, multiple-commodity, multiregion model of agricultural policy and trade. Average bound tariffs for dairy remain among the highest of all agricultural commodities and dairy trade is characterized by a large number of megatariffs and tariff-rate quotas (TRQs). In addition to tariffs and TRQs, countries have used milk production quotas to control milk production. Modeling results indicate that liberalization would reduce world dairy product supplies and increase the value of dairy trade.
Show more [+] Less [-]A partial-equilibrium, multiple-commodity, multiregion model of agricultural policy and trade is used to simulate the effects of changes in domestic and trade policy on dairy production, consumption, prices, and trade. Simulations using the ERS-Penn State Trade model analyze the effects of separately and concurrently relaxing domestic income and price supports, and import restrictions and export subsidies, with special attention to tariff-rate and milk production quotas. Modeling results indicate that liberalization would reduce world dairy product supplies and increase the value of dairy trade.
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