Impacts of Changes in Consumption, Production and Trade Policies in China and India on the European Union and New Zealand

Abstract

This study assessed the potential impacts of changes in meat and dairy consumption and production, as well as different trade policies in China and India, on agricultural trade in New Zealand (NZ) and the European Union (EU-27), using the Lincoln Trade and Environment Model (LTEM). This partial equilibrium model forecasts international trade, production and consumption of agricultural commodities. Several scenarios were developed simulating different ranges of consumption and production of meat and dairy commodities, as well as full trade liberalisation in China and India. Results showed that changing consumption, production and trade patterns in India and China could lead to higher producer returns from meat and dairy commodities in NZ and the EU-27 by 2020. However, if China and India significantly increase meat and dairy consumption and production simultaneously, producer returns in NZ and the EU-27 could decline.