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The focus of this paper is on the analysis of market imperfections in the French and U.K. wheat value chains. We used mark-up and mark-down models and stochastic frontier analysis to estimate the degree of market imperfections in two completely different wheat-to-bread chains for two stages/sectors—milling and baking. Our results reveal some degree of market imperfections within the input and output markets for both the milling and baking sectors in France and the United Kingdom. However, the abuse of bargaining power is especially pronounced in the input market for the second stage of wheat processing, particularly in the French baking sector. However, we did not observe the expected positive association between the degree of market imperfections and company size except for a group of middle, large, and very large companies within the millers' input market. Small companies indicate considerably high values of "Lerner"/Lerner indices, suggesting a benefit from other sources of competitive advantage (such as quality, niche markets, etc.). [ABSTRACT FROM AUTHOR]

The abolition of the milk quota system in April 2015 has implied a transition towards a new "system" in which non-policy and non-EU elements have become important drivers of the EU dairy market. In terms of its contribution, after reviewing some of the existing literature, this article presents a theoretical framework to understand "irregular" supply behaviour, while it empirically identifies an "inverse" supply curve for the EU dairy sector. In doing so, milk prices have been decomposed by following the procedure proposed by James P. Houck. This exercise confirms the non-reversibility, and therefore an asymmetric response, in the behaviour of milk supply for most EU Member States. Moreover, this article also presents the results of a "stress" test of the dairy sector in order to analyse the responses of dairy production in a context of the asymmetrical behaviour of dairy farmers and assess the competitiveness of the dairy sector at Member State level. The outcomes emphasise the high competitiveness of the Irish dairy sector and suggest a deterioration of the competitiveness in the case of the United Kingdom and France. From the policy-making perspective, the identification of this type of farmer's reactions is key for an appropriate design of policy interventions and crisis management strategies. [ABSTRACT FROM AUTHOR]