Impact of Government Reform on Beef Market
No 4/2012, December Special
Abstract
The present paper deals with the simulation of the impact of selected measures of government reforms in the beef market in the Czech Republic. The selected measures of government reforms are defined and specified on the base of available resources in the introduction. Subsequently, these measures are simulated by the model of partial equilibrium of defined market in the practical part. The impacts of the measures on both supply and demand of selected market are then commented, based on formal econometric quantification and verification of model outputs. The analyzed government measures are included in the form of an expected increase in VAT, the movement of the Czech crown, the development of consumer income and the price expectancy in vertical of beef. The results predict negative consequences on domestic market, in particular on the supply side, in the form of a relatively significant reduction in the number of pieces of cattle. These can result in reducing the number of enterprises with intensive fattening or in shifting their focus to other commodities of vegetable nature. On the demand side, the analyzed measures are likely to bring short-term price reductions. However, the steep growth accompanied by a reduction in quality of meat products can be reasonable expected in the long run. Pieces of knowledge introduced in this paper resulted from solution of an institutional research intention MSMT 6046070906 „Economics of resources of Czech agriculture and their efficient use in frame of multifunctional agri-food systems“.
Keywords
Beef, partial equilibrium, simulation, VAT, Czech Republic.