IDEAS home Printed from https://ideas.repec.org/a/oup/erevae/v38y2011i4p469-495.html
   My bibliography  Save this article

Dairy farms without quotas in Belgium: estimation and simulation with a flexible cost function

Author

Listed:
  • Bruno Henry de Frahan
  • Alexandre Baudry
  • Rembert De Blander
  • Philippe Polomé
  • Richard Howitt

Abstract

This paper evaluates the farm-level supply and income effects from removing milk quotas and reducing producer prices with increasing direct compensatory payments. Using a panel of Belgian dairy farms, we first estimate a multi-output multi-input flexible cost function that generates a U-shaped marginal cost curve for each farm of the sample. We then embed each farm cost function in a profit-maximisation programming model that is built and calibrated for each farm in the sample. Accounting for farm heterogeneity, the simulations show how dairy farms without quotas may respond differently to changes in prices and structural changes that may take place within the dairy sector. A quota removal with a 20 per cent reduction in milk prices keeps aggregate milk supply and farm income at about the same level of the 2006 reference year. , Oxford University Press.

Suggested Citation

  • Bruno Henry de Frahan & Alexandre Baudry & Rembert De Blander & Philippe Polomé & Richard Howitt, 2011. "Dairy farms without quotas in Belgium: estimation and simulation with a flexible cost function," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(4), pages 469-495, October.
  • Handle: RePEc:oup:erevae:v:38:y:2011:i:4:p:469-495
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/erae/jbr013
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ang, Frederic & Oude Lansink, Alfons, 2014. "Dynamic profit inefficiency: a DEA application to Belgian dairy farms," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182649, European Association of Agricultural Economists.
    2. repec:eee:agisys:v:153:y:2017:i:c:p:1-10 is not listed on IDEAS
    3. Hansen, Kristiana & Frahan, Bruno Henry de, 2011. "Evaluation of Agro-Environmental Policy through a Calibrated Simulation Farm Model," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114577, European Association of Agricultural Economists.
    4. Samson, G.S. (Sabrina) & Gardebroek, Koos & Jongeneel, Roelof A., 2012. "The Cost Function Structure of Dutch Dairy Farms: Effects of Quota abolition and Price Volatility," 126th Seminar, June 27-29, 2012, Capri, Italy 125956, European Association of Agricultural Economists.
    5. Wimmer, Stefan G & Sauer, Johannes, 2016. "Diversification Versus Specialization: Empirical Evidence On The Optimal Structure Of European Dairy Farms," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244882, German Association of Agricultural Economists (GEWISOLA).
    6. Jerzy Marzec & Andrzej Pisulewski, 2015. "Analysis of the Economic Activity of Dairy Farms in Poland: Results obtained from the Short-run Cost Function," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 39, pages 167-182.
    7. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    8. De Blander, Rembert & Frahan, Bruno Henry de, 2011. "Analysis of Technical and Policy Changes for Belgian Dairy Farms Using an Estimated Augmented SGM Cost Function," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114546, European Association of Agricultural Economists.
    9. Charlebois, Sylvain, 2016. "Policy-change Triggered Environmental Uncertainty in a Dairy Cooperative: The Case of Mila in South Tyrol," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 7(3).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:erevae:v:38:y:2011:i:4:p:469-495. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/eaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.