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Production strategies after the end of milk quotas: an analysis based on bio-economic modeling

Inra Prod Anim 25(1) 67-76

B. LELYON¹, V. CHATELLIER², K. DANIEL²,³

1Institut de l’Elevage, Département Economie, F-75012 Paris, France

2INRA, UR1134 (LERECO), F-44316 Nantes, France

3ESA, PRES UNAM Université, ESA LARESS, F-49007 Angers, France

 Abstract

Milk quotas, introduced in France in 1984, will be ended by 2015. This paper, based on a "bio-economic" model, discusses the main productive and economic implications of this important change of the Common Agricultural Policy (CAP). We assumed that, with the abolishment of milk quotas, a contracting system of "double volume with different prices" will be implemented between producers and dairy processors. The model maximizes the farm income while taking into account a set of constraints: zootechnical, agronomical, environmental, structural and regulatory. This model, which integrates the risk of price volatility, is applied to four types of farms reflecting a part of the farms' diversity located in the west of France. According to the results of this modeling approach, it appears that many dairy farms located in this region have, thanks to changes in their production strategies (intensification, specialization), a large potential to increase milk production, with the same structure. The amount of extra milk which may be produced will depend on the evolution of demand for dairy products and the competitiveness of the dairy industries. For a given farm, these additional quantities depend on the price of milk produced in volume A and B, the relative prices between agricultural products (milk, beef and cereals) and a possible strengthening of environmental constraints.

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