Impacts of Decoupling and Milk Quota Trade on the French and German Dairy Sectors

This paper analyses the impacts of the 2003 CAP reform and of milk quota trade at the national level. To this end, a mathematical programming model has been further developed for Germany and extended to other main milk-producing EU member states like France. Homogeneous farm groups are built on the basis of EU Farm Accountancy Data Network. The results show that quotas will be fully used in both countries if quota trade is possible. A clear tendency in the reallocation of production from small towards large farms can be seen in all regions for France. In Germany, the redistribution of direct payments induced by the implementation of the regional scheme of decoupled payments leads to higher reductions of income in dairy & beef farms than in France.2003 CAP reform, milk quota trade, model, mathematical programming, International Relations/Trade,