The future of European Union dairy polity

Even if the quota regime has been extended until 2007-08 as part of the Age nda 2000 reform adopted in March 1999, the European Union (EU) dairy sector is currently experiencing large uncertainty over future policy. This paper examines EU dairy policy issues and assesses their likely implications. It mainly addresses the central question of dismantling the quota and interve ntion support mechanisms. Simulation results illustrate how three factors ( marginal costs of production, import tariffs on dairy products and compensa tory payments granted to dairy producers) may affect the outcomes of a quot a elimination scenario.