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Dairy farmers' strategies in four European countries before and after abolition of the milk quota

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  • Klopčič, Marija
  • Kuipers, Abele
  • Malak-Rawlikowska, Agata
  • Stalgiene, Aldona
  • Ule, Anita
  • Erjavec, Karmen

Abstract

In recent years, the European Union (EU) dairy sector has experienced considerable changes, triggering heavily fluctuating milk prices and a crash in milk prices in 2015/2016. These changes were forcing dairy farmers to respond by reconsidering their strategy. Since there is a lack of insight into how farmers were adjusting their strategies to the new circumstances, this study aimed to fill the gap by conducting a survey on farmers’ development plans in three Central and Eastern European countries (Poland, Lithuania and Slovenia) with different farming systems and one Western European country with a well-developed dairy sector (the Netherlands) before (2010 and 2013) and one year after the EU milk quota was abolished (2016). Groups of farmers with similar strategies were identified using principle component analysis and cluster analysis. Differences in strategies between years and countries were studied. The results reveal three main strategies in the analysed years: expansion, specialisation, and wait and see. Six farmer clusters were then identified. The cluster of Growers was largest, corresponding to the strategies of expansion and specialisation in dairy production. The share of Growers was increasing in Poland and the Netherlands and falling in Lithuania and Slovenia, probably due to the strong market orientation and good dairy production conditions in the aforementioned countries. The share of farmers in the Wait and See cluster grew significantly from 2013 to 2016 in all countries. These farmers considered the economic environment as too uncertain for further development at the time. The share of Diversifiers was rather stable within each country over the years. The share of Chain integrators, namely those who look for cooperation with other parties in the chain, was larger in good years and the share of Co-operators, who prefer to cooperate with other farmers, was larger in difficult market times. The cluster of Movers had the largest farms. On average, larger farms with somewhat younger farmers opted for growth, chain integration or moving and somewhat older farmers with smaller farms for a (temporary) stand-still. But considerable differences in the number of farmers per cluster over the years were found. Less than half the farmers were consistent in their development direction after 3 years, due to fluctuating prices and changing policies. Wait and See farmers were the most consistent. Policymakers and advisory services should consider farm strategies according to national specificities. Most farmers follow a strategy of expansion, while a smaller group of them were more concerned and act cautiously in a difficult market or policy situation. However, many farmers appeared to change their opinion on the self-chosen direction from time to time due to the varying circumstances. This instability in strategy choice makes future decision-making a fluid matter and not really consistent with well-designed planning.

Suggested Citation

  • Klopčič, Marija & Kuipers, Abele & Malak-Rawlikowska, Agata & Stalgiene, Aldona & Ule, Anita & Erjavec, Karmen, 2019. "Dairy farmers' strategies in four European countries before and after abolition of the milk quota," Land Use Policy, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:lauspo:v:88:y:2019:i:c:s0264837718319598
    DOI: 10.1016/j.landusepol.2019.104169
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    1. Artur Wilczyński & Ewa Kołoszycz, 2021. "Economic Resilience of EU Dairy Farms: An Evaluation of Economic Viability," Agriculture, MDPI, vol. 11(6), pages 1-14, May.
    2. Marija Klopčič & Karmen Erjavec & Megan Waldrop & Jutta Roosen & Petra Engel & Paul Galama & Abele Kuipers, 2021. "Consumers’ and Farmers’ Perceptions in Europe Regarding the Use of Composted Bedding Material from Cattle," Sustainability, MDPI, vol. 13(9), pages 1-18, May.
    3. Lukáš Čechura & Zdeňka Žáková Kroupová & Irena Benešová, 2021. "Productivity and Efficiency in European Milk Production: Can We Observe the Effects of Abolishing Milk Quotas?," Agriculture, MDPI, vol. 11(9), pages 1-21, August.
    4. Maria Zuba-Ciszewska & Aleksandra Kowalska & Aneta Brodziak & Louise Manning, 2023. "Organic Milk Production Sector in Poland: Driving the Potential to Meet Future Market, Societal and Environmental Challenges," Sustainability, MDPI, vol. 15(13), pages 1-21, June.
    5. Jasper Grashuis, 2021. "A price premium for the farmer‐owned label? A choice experiment with milk consumers in the Netherlands," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 749-763, October.
    6. Garcia, Luis & Laepple, Doris & Dillon, Emma & Thorne, Fiona, 2020. "The role of hired labor in transient and persistent technical efficiency on Irish dairy farms," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304395, Agricultural and Applied Economics Association.

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