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Dairy Intensification and Quota Abolition: A Comparative Study of Production in Ireland and the Netherlands

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  • Doris Läpple
  • Gordon Sirr

Abstract

The milk quota abolition in 2015 set in motion major adjustments in the EU dairy sector and considerable differences in expansion and contraction of milk production are observed across Member States. Despite significant differences in production methods, Ireland and the Netherlands are among the EU countries that achieved the largest dairy production growth rates. This article compares and contrasts Irish and Dutch dairy farms that intensified and expanded production. To this end, Farm Accountancy Data Network data of specialised dairy farms are used and Principal Component Analysis was performed with a view to assessing common themes and differences in intensification efforts. In both countries, farms that intensified their production have higher gross investments and larger dairy herds, when compared to the average dairy farm in their country. The Principal Component Analysis revealed farm size variables, dairy specialisation and direct payments, as well as investments and financial leverage as common themes of intensification, with differing importance in the two countries. Implications of intensification for policies to ensure longer‐term sustainability are discussed. La suppression des quotas laitiers en 2015 a entraîné de profonds ajustements dans le secteur laitier de l'Union européenne et des différences considérables entre États membres en termes d'expansion et de contraction de la production laitière. Malgré des différences importantes de méthode de production, l'Irlande et les Pays‐Bas figurent parmi les pays de l'Union européenne qui ont enregistré les taux de croissance de la production laitière les plus élevés. Cet article compare et contraste les exploitations laitières irlandaises et néerlandaises qui ont intensifié et accru leur production. À cette fin, l’étude fait appel aux données sur les exploitations laitières spécialisées du Réseau d'Information Comptable Agricole et comprend une analyse en composantes principales réalisée dans le but d’évaluer les caractéristiques communes et les différences dans les efforts d'intensification. Dans les deux pays, les exploitations qui intensifient leur production ont des investissements bruts plus élevés et des troupeaux de vaches laitières plus importants que la moyenne nationale des exploitations laitières. L'analyse en composantes principales a révélé que les variables de taille des exploitations, la spécialisation des produits laitiers et les paiements directs, ainsi que les investissements et l'effet de levier financier étaient des caractéristiques communes de l'intensification, dont l'importance variait selon les pays. L'article comprend un examen des implications de l'intensification pour les politiques visant à assurer la durabilité à plus long terme du secteur. Die Abschaffung der Milchquoten im Jahr 2015 führte zu umfangreichen Anpassungen im EU‐Milchsektor. Dabei konnten in den einzelnen Mitgliedstaaten erhebliche Unterschiede in der Zu‐ und Abnahme der Milcherzeugung beobachtet werden. Trotz der deutlichen Unterschiede in den Produktionsverfahren gehören Irland und die Niederlande zu den EU‐Ländern, die die größten Wachstumsraten in der Milchproduktion erzielten. Dieser Artikel vergleicht irische und niederländische Milchviehbetriebe, welche die Produktion intensiviert und erweitert haben. Zu diesem Zweck werden Daten des Farm Accountancy Data Network (Informationsnetz Landwirtschaftlicher Buchführungen der Europäischen Kommission) von spezialisierten Milchviehbetrieben verwendet und eine Hauptkomponentenanalyse (PCA) durchgeführt, um gemeinsame Schwerpunkte und Unterschiede in den Intensivierungsbemühungen zu ermitteln. In beiden Ländern haben Betriebe, die ihre Produktion intensiviert haben, höhere Bruttoinvestitionen und größere Milchviehherden im Vergleich zum durchschnittlichen nationalen Milchviehbetrieb. Die PCA zeigte, dass Variablen der Betriebsgröße, der Grad der Spezialisierung und Direktzahlungen sowie Investitionen und eine finanzielle Hebelwirkung die Intensivierungsschwerpunkte sind, allerdings mit unterschiedlicher Bedeutung in den beiden Ländern. Es werden die Auswirkungen der Intensivierung für politische Maßnahmen zur Sicherstellung einer langfristigen Nachhaltigkeit diskutiert.

Suggested Citation

  • Doris Läpple & Gordon Sirr, 2019. "Dairy Intensification and Quota Abolition: A Comparative Study of Production in Ireland and the Netherlands," EuroChoices, The Agricultural Economics Society, vol. 18(3), pages 26-32, December.
  • Handle: RePEc:bla:eurcho:v:18:y:2019:i:3:p:26-32
    DOI: 10.1111/1746-692X.12213
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    References listed on IDEAS

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    1. Esther Boere & Jack Peerlings & Stijn Reinhard & Wim Heijman, 2015. "The dynamics of dairy land use change with respect to the milk quota regime," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(4), pages 651-674.
    2. Shingo Kimura & Christine Le Thi, 2013. "Cross Country Analysis of Farm Economic Performance," OECD Food, Agriculture and Fisheries Papers 60, OECD Publishing.
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    1. Bradfield, Tracy & Butler, Robert & Dillon, Emma J. & Hennessy, Thia & Loughrey, Jason, 2023. "The impact of long-term land leases on farm investment: Evidence from the Irish dairy sector," Land Use Policy, Elsevier, vol. 126(C).
    2. Thorsøe, Martin & Noe, Egon & Maye, Damian & Vigani, Mauro & Kirwan, James & Chiswell, Hannah & Grivins, Mikelis & Adamsone-Fiskovica, Anda & Tisenkopfs, Talis & Tsakalou, Emi & Aubert, Pierre-Marie &, 2020. "Responding to change: Farming system resilience in a liberalized and volatile European dairy market," Land Use Policy, Elsevier, vol. 99(C).
    3. Barbara Wróbel & Waldemar Zielewicz & Mariola Staniak, 2023. "Challenges of Pasture Feeding Systems—Opportunities and Constraints," Agriculture, MDPI, vol. 13(5), pages 1-31, April.
    4. Pardeshi, Shefali & Loughrey, Jason & O’Connor, Declan, 2024. "Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344291, International Association of Agricultural Economists (IAAE).
    5. Laura Onofri & Samuele Trestini & Fateh Mamine & Jason Loughrey, 2023. "Understanding agricultural land leasing in Ireland: a transaction cost approach," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-20, December.

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