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Characteristics, intentions and expectations of new entrant dairy farmers entering the Irish dairy industry through the New Entrant Scheme

Author

Listed:
  • McDonald, Roberta
  • Karina, Pierce
  • Reamonn, Fealy
  • Horan, Brendan

Abstract

As part of the gradual expansion and abolition of EU milk quotas, the Irish government has approved the allocation of milk quota to a small number of new entrants to dairy production. The objective of this study was to describe the characteristics of new entrant dairy farm businesses developing within the Irish dairy industry in terms of geographical distribution, planned production system characteristics and intended operational scale and expected profitability based on an analysis of successful applications and business plans to the Irish New Entrant Dairy Scheme over a 3 year period. A total of 230 applications and business plans of entrants who received up to 200,000 litres of milk quotas through the New Entrant Scheme from 2009-2011, were analysed for the effects of region, age, household income, previous dairy experience, and education on overall business plan expectations. The results show that a youthful, highly educated and highly resourced group of new farmers are using the New Entrant Scheme to enter the Irish dairy industry. Applicant age has a significant impact on available investment equity and expectations, as younger entrants have less owned resources, are increasingly reliant on additional borrowing and have significantly increased expectations for the productive capacity of their potential farm businesses when compared to older entrants. The majority of new entrants are not planning to solely rely on new dairy enterprises and are instead maintaining reduced alternative enterprises or off-farm work. The results provide a further indication that quota abolition is likely to result in an increased regional polarisation of milk production within Ireland with increased intensity of production within traditional milk production areas in the south.

Suggested Citation

  • McDonald, Roberta & Karina, Pierce & Reamonn, Fealy & Horan, Brendan, 2013. "Characteristics, intentions and expectations of new entrant dairy farmers entering the Irish dairy industry through the New Entrant Scheme," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 2(4), pages 1-12, July.
  • Handle: RePEc:ags:ijameu:175089
    DOI: 10.22004/ag.econ.175089
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    File URL: http://ageconsearch.umn.edu/record/175089/files/189_McDonald.pdf
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    References listed on IDEAS

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    1. Markus Lips & Peter Rieder, 2005. "Abolition of Raw Milk Quota in the European Union: A CGE Analysis at the Member Country Level," Journal of Agricultural Economics, Wiley Blackwell, vol. 56(1), pages 1-17, March.
    2. Gloy, Brent A. & Hyde, Jeffrey & LaDue, Eddy L., 2002. "Dairy Farm Management and Long-Term Farm Financial Performance," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(2), pages 1-15, October.
    3. Ashok Mishra & Christine Wilson & Robert Williams, 2009. "Factors affecting financial performance of new and beginning farmers," Agricultural Finance Review, Emerald Group Publishing, vol. 69(2), pages 160-179, July.
    4. Gloy, Brent A. & Hyde, Jeffrey & LaDue, Eddy L., 2002. "Dairy Farm Management and Long-Term Farm Financial Performance," Agricultural and Resource Economics Review, Cambridge University Press, vol. 31(2), pages 233-247, October.
    5. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    6. Davis, John & Caskie, Paul & Wallace, Michael, 2013. "Promoting structural adjustment in agriculture: The economics of New Entrant Schemes for farmers," Food Policy, Elsevier, vol. 40(C), pages 90-96.
    7. Zepeda, Lydia, 1990. "Predicting Bovine Somatotropin Use By California Dairy Farmers," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(1), pages 1-8, July.
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    Cited by:

    1. Mihailescu, E. & Ryan, W. & Murphy, P.N.C. & Casey, I.A. & Humphreys, J., 2015. "Economic impacts of nitrogen and phosphorus use efficiency on nineteen intensive grass-based dairy farms in the South of Ireland," Agricultural Systems, Elsevier, vol. 132(C), pages 121-132.

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