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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/44250
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| Title: | Decoupling and prices: determinant of dairy farmers’ choices? A model to analyse impacts of the 2003 CAP reform |
| Authors: | Lelyon, Baptiste
Daniel, Karine
Chatellier, Vincent |
| Keywords: | dairy farm
single payment
price variation |
| Issue Date: | 2008 |
| Abstract: | The reform of European Common Agricultural
Policy (CAP) in 2003 has resulted in substantial changes to the
attribution of subsidies to dairy farmers. Moreover, dairy
farmers are in also facing an unprecedented situation on the
markets with the soaring prices of agricultural raw materials:
they sell their products at a higher price (milk, meat and
cereals), but must also cope with the increasing prices of
concentrates. In this paper1, we discuss cross effects, on the
productive strategy of French dairy farms, of the Luxemburg
Agreement and the prices variations. A model based on
mathematical programming has been privileged to determine
how dairy farmers might re-evaluate their systems to identify
optimal production plan. While respecting the principle of
agent rationality (maximization of profit), the model
incorporates the economic risk related to the volatility of the
inputs and outputs prices. Thus the model maximises the
expected utility of the income while taking into account a set of
constraints: regulatory, structural, zootechnical, agronomic
and environmental. The model is applied to four types of dairy
farms to cope with the diversity of production systems in the
west of France (“grazier” type, “semi intensive” type, “milk +
cereals” type and “milk + young bulls” type). The model is
used to produce quantitative estimations and support
reflection through the simulation of the setting up of the Single
payment scheme. The sensitivity of the results is discussed by
taking into account several options of prices for cereals and
livestock products. These may have a strong influence on the
structure of the diet and, therefore, on the level of
intensification of the forage area. The results show that the
implementation of the CAP reform encourages farmers to
substitute a part of corn silage by grass in the diet. However,
the rising price of agricultural production encourages, on the
contrary, farmers to intensify their system in order to free up
land for growing cereals. We also observe that a decrease of
the young bulls fattening activity to develop cereal crops is also
economically profitable. |
| URI: | http://purl.umn.edu/44250 |
| 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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