An Analysis of the Impact of Alternative EU Dairy Policies on the Size Distribution of Dutch Dairy Farms: an Information Based Approach to the Non-Stationary Markov Chain Model
AbstractThis paper analyses the impact of the dairy quota scheme on the size distribution of the Dutch dairy industry. A non-stationary Markov model approach is use, where the transition probabilities are explained by a set of exogenous (policy) variables. Using an information theoretical approach, a model is estimated for The Netherlands and used to simulate the impacts of alternative EU dairy policies. Several results emerged: a) There is an autonomous over time decline in farm numbers (implying increase in farm size). b) The dairy quota regime positively influences 'small' and 'medium' farm sizes; c) Abolition of the dairy quota will negatively affect the total number of active farms and favours further increase of farm scale. d) Targeting support according to needs increases the number of active dairy farms as compared with the status quo.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24892.
Date of creation: 2002
Date of revision:
Farm size structure; dairy; milk quota; policy; maximum entropy; Agribusiness;
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