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A Microeconometric Analysis Of Milk Quota Transfer: Application To French Producers

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  • Hervé Guyomard
  • Xavier Delache
  • Xavier Irz
  • Louis‐Pascal Mane

Abstract

In this paper, we use the duality theory framework and the concept of virtual or shadow price of a rationed good to analyse producer behaviour under output quota when individual quota rights can be leased or rented for one production cycle. We propose a formal model of tradable quota rights which allows us to determine the lease price of quota and the exchanged quantity at equilibrium. The implications of trading On farmers' decisions (output choice level and traded licences), and on their incomes, are derived formally. The theoretical framework is applied to a sample of French milk producers for the year 1991. We then determine efficiency gains and regional shifts in production that such a market would generate.

Suggested Citation

  • Hervé Guyomard & Xavier Delache & Xavier Irz & Louis‐Pascal Mane, 1996. "A Microeconometric Analysis Of Milk Quota Transfer: Application To French Producers," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 206-223, January.
    • Handle: RePEc:bla:jageco:v:47:y:1996:i:1-4:p:206-223
    DOI: 10.1111/j.1477-9552.1996.tb00685.x
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    Cited by:

    1. Alan W. Renwick & Cesar L. Revoredo Giha & Mark A. Reader, 2005. "UK Sugar Beet Farm Productivity under Different Reform Scenarios: A Farm Level Analysis," Environmental Economy and Policy Research Working Papers 04.2005, University of Cambridge, Department of Land Economics, revised 2005.
    2. Bureau, Jean-Christophe & Guyomard, Herve & Requillart, Vincent, 2001. "On inefficiencies in the European sugar regime," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 659-667, August.
    3. Frederic Courleux & Herve Guyomard & Fabrice Levert, 2007. "Étude prospective sur le fonctionnement des marchés des droits au paiement et de la réserve nationale mis en place dans le cadre de la réforme de la PAC de juin 2003," Working Papers hal-01595356, HAL.
    4. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    5. Pierre Rainelli & Dominique Vermersch, 1997. "Thematic network on CAP and environment in the EU : French report," Post-Print hal-01601136, HAL.
    6. Renwick, Alan W. & Revoredo-Giha, Cesar, 2005. "Crop Substitution on UK Sugar Beet Farms and its Effects on the Environment: A Multi-Product Cost Function Approach," 2005 Annual meeting, July 24-27, Providence, RI 19387, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Johannes Sauer, 2010. "Deregulation and dairy production systems: a Bayesian distance function approach," Journal of Productivity Analysis, Springer, vol. 34(3), pages 213-237, December.
    8. Elskamp, Rebecca & Hailu, Getu, 2013. "Do Efficient Dairy Producers Purchase Quota?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149678, Agricultural and Applied Economics Association.
    9. Pavel Ciaian & d'Artis Kancs & Jo Swinnen, 2008. "Static and Dynamic Distributional Effects of Decoupled Payments," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 51(2), pages 20-47.
    10. Catherine C. Benjamin & Herve Guyomard, 1997. "Production rights market : some analysis problems [Quelques difficultés d'analyse d'un marché des droits à produire]," Post-Print hal-02840513, HAL.
    11. Barkaoui, A. & Butault, J. P. & Guyomard, H., 1997. "Mobilité des droits à produire dans l'Union européenne : Conséquences d'un marché des quotas laitiers à l'échelle régionale, nationale ou communautaire," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 44.
    12. Sauer, J., 2009. "Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 44, March.
    13. Alfons Oude Lansink & Arno Van Der Vlist, 2008. "Non‐Parametric Modelling of CO2 Emission Quota," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(3), pages 487-497, September.
    14. Alan W. Renwick & Cesar L. Revoredo Giha, 2005. "Analysis of the Impact on UK Sugar Production Efficiency of Reforming the EU Sugar Regime," Environmental Economy and Policy Research Working Papers 07.2005, University of Cambridge, Department of Land Economics, revised 2005.
    15. Antonio Alvarez & Carlos Arias & Luis Orea, 2006. "Explaining Differences in Milk Quota Values: The Role of Economic Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 182-193.
    16. Jerzy Marzec & Andrzej Pisulewski, 2015. "Analysis of the Economic Activity of Dairy Farms in Poland: Results obtained from the Short-run Cost Function," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 39, pages 167-182.
    17. David Colman & Michael Burton & Dan Rigby & Jeremy Franks, 2002. "Structural Change and Policy Reform in the UK Dairy Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 645-663, November.
    18. Wieck, Christine & Heckelei, Thomas, 2004. "Development Of Marginal Cost Distributions In Dairy Production Regions Of The Eu," 2004 Annual meeting, August 1-4, Denver, CO 19943, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    20. Colman, David, 2000. "Inefficiencies in the UK milk quota system," Food Policy, Elsevier, vol. 25(1), pages 1-16, February.
    21. Sauer, Johannes, 2008. "Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36869, Agricultural Economics Society.
    22. Kempen, Markus & Witzke, Peter & Pérez Domínguez, Ignacio & Jansson, Torbjörn & Sckokai, Paolo, 2011. "Economic and environmental impacts of milk quota reform in Europe," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 29-52, January.
    23. Levi, Loic & Chavas, Jean-Paul, 2018. "How Does Eliminating Quotas Affect Firm Investment? Evidence from Dairy Farms," 2018 Annual Meeting, August 5-7, Washington, D.C. 273831, Agricultural and Applied Economics Association.

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