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European Association of Agricultural Economists >
2008 International Congress, August 26-29, 2008, Ghent, Belgium >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/43965
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| Title: | Dairy Farms without Quotas: Simulations Based on a Multi-output Multi-input Cost Function |
| Authors: | Baudry, Alexandre
Henry de Frahan, Bruno
Polome, Philippe
Howitt, Richard E. |
| Keywords: | flexible cost function
microsimulation
dairy reform |
| Issue Date: | 2008 |
| Abstract: | This paper evaluates the farm level
supply and income effects from removing milk quotas
and reducing producer prices with increasing direct
compensatory payments. Using a panel of Belgian
dairy farms, we first estimate long-run flexible multioutput
multi-input marginal cost curves for each
farm of the sample. Second, we embed each estimated
long-run farm cost function in the objective function
of a profit maximisation programming model built
for each farm of the sample. Simulations show that,
without quotas, aggregated milk supply and farm
gross margin increase by 18 per cent and 37 per cent
respectively from their reference level. A 20 per cent
decline in producer prices and a compensation rate
set at 30 per cent of the price decline maintain the
aggregated milk supply and farm gross margin at
their reference level. Dairy farms adjust differently
to change in prices and compensation rates. |
| URI: | http://purl.umn.edu/43965 |
| Institution/Association: | European Association of Agricultural Economists>2008 International Congress, August 26-29, 2008, Ghent, Belgium |
| Total Pages: | 13 |
| Collections: | 2008 International Congress, August 26-29, 2008, Ghent, Belgium
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