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Milk quota and the development of Irish dairy productivity: a Malmquist index using a stochastic frontier approach

Author

Listed:
  • Gillespie, Patrick
  • O'Donoghue, Cathal
  • Hynes, Stephen
  • Thorne, Fiona
  • Hennessy, Thia

Abstract

Several studies of the Irish dairy productivity and efficiency have been carried out in recent history, but none have been able to use Irish farm level data going back before milk quota’s implementation. This study uses recently digitized data going back as far as 1979 to examine trends in an index of Total Factor Productivity (TFP) constructed from the parameters of Greene’s ‘true random effects’ specification of the stochastic frontier. There is some evidence that the implementation of milk quota was associated with a general decrease in TFP, and the series also moves in line with changes in the policy which liberalised quota trade. Technical efficiency and scale efficiency are dominated by movements of the frontier as represented by the technical change component of the index.

Suggested Citation

  • Gillespie, Patrick & O'Donoghue, Cathal & Hynes, Stephen & Thorne, Fiona & Hennessy, Thia, 2015. "Milk quota and the development of Irish dairy productivity: a Malmquist index using a stochastic frontier approach," 2015 Conference, August 9-14, 2015, Milan, Italy 211684, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:211684
    DOI: 10.22004/ag.econ.211684
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    References listed on IDEAS

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    1. 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.
    2. Alan Matthews & Carol Newman & Fiona Thorne, 2006. "Productivity in Irish Agriculture," Working Papers 0614, Rural Economy and Development Programme,Teagasc.
    3. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    4. Suzanne O’Neill & Alan Matthews, 2001. "Technical Change and Efficiency in Irish Agriculture," The Economic and Social Review, Economic and Social Studies, vol. 32(3), pages 263-284.
    5. Colman, David, 2000. "Inefficiencies in the UK milk quota system," Food Policy, Elsevier, vol. 25(1), pages 1-16, February.
    6. Binfield, Julian C.R. & Donnellan, Trevor & Hanrahan, Kevin F., 2008. "An Examination of Milk Quota expansion at EU member State Level with specific emphasis on Ireland," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6467, European Association of Agricultural Economists.
    7. Trevor Donnellan & Thia Hennessy & Fiona Thorne, 2009. "Perspectives on the Competitiveness of EU Dairy Farming," EuroChoices, The Agricultural Economics Society, vol. 8(SpecialIs), pages 23-29, April.
    8. Luis Orea, 2002. "Parametric Decomposition of a Generalized Malmquist Productivity Index," Journal of Productivity Analysis, Springer, vol. 18(1), pages 5-22, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Frick, Fabian & Sauer, Johannes, 2016. "Deregulation and Productivity – Empirical Evidence on Dairy Production," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236032, Agricultural and Applied Economics Association.
    2. Frick, Fabian & Sauer, Johannes, 2016. "Deregulation And Productivity – Empirical Evidence On Dairy Production," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244884, German Association of Agricultural Economists (GEWISOLA).
    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. Zeng, Shuwei & Gould, Brian & Thorne, Fiona & Laepple, Doris, "undated". "EU Milk Quota Elimination: Has the Productivity of Irish Dairy Farms Been Impacted?," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 261218, Agricultural and Applied Economics Association.
    5. Walenty Poczta & Joanna Średzińska & Maciej Chenczke, 2020. "Economic Situation of Dairy Farms in Identified Clusters of European Union Countries," Agriculture, MDPI, vol. 10(4), pages 1-22, March.

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    Food Consumption/Nutrition/Food Safety;

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