| The article examines the market and welfare effects of the current CAP reform and further policy options on the EU dairy market. The main focus is the influence of unstable world markets and the uncertainty it generates in policy analysis which has been widely neglected. The simulations of a stochastic dairy market model reveal that the considered policy options affect the impact of world market instabilities on the EU dairy market. Thus, not only a changing level of producer price or revenues can be expected, but also a changing degree of instability. Policy making without taking such instability changes into account may lead to undesired effects and, finally, could undermine the realisation of policy objectives. Also, the evaluation of the welfare... |
