Changing patterns of competitiveness in the Estonian milk sector
2003
Hein, P. (Humboldt University of Berlin, Berlin (Germany))
The purpose of the paper is to analyse the patterns of competitiveness of the Estonian milk sector in the light of the forthcoming EU accession. Competitiveness is defined and measured through the profits at the sector level. The impact of the accession on the profitability of the milk sector (milk production and processing) is modelled with the Policy Analysis Matrix. The model measures competitiveness in the actual market situation and in the "ideal world" conditions where there is perfect competition and no policy distortions. Comparing these two results the policy effects and the market distortions can be shown. With the help of scenarios it is investigated how the changing input and output prices after adopting the CAP change the competitiveness of the Estonian milk sector shortly after the accession to the EU. Results of the model show that the immediate impact of adopting the CAP increases the competitiveness of the milk production, the impact on the milk-processing sector is less favourable
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