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A Farm Level Analysis Of The Relation Between Cap Reforms And Local Environmental Legislations: How And In Which Extent Flemish Dairy Farmers Can Fill Up Extra Milk Quota?

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  • Van der Straeten, Bart
  • Buysse, Jeroen
  • Nolte, Stephan
  • Marchand, Fleur L.
  • Lauwers, Ludwig H.
  • Claeys, Dakerlia
  • Van Huylenbroeck, Guido

Abstract

The agricultural policies shift gradually from EU-level organised market interventions to local organised environmental policies. This paper explores the growth possibilities of the Flemish dairy sector with the outlook of a quota abolishment as a case study of this policy shift. The dairy quota policy seems very restrictive for the highly profitable Flemish dairy sector, but the environmental restrictions from the manure regulation can limit the growth of the dairy sector as well. The paper uses a spatial multi-agent simulation model applied to a sample of 40.000 farms to estimate price development of emission rights and their possible impact on the growth of the dairy production. The results show that a higher milk production leads to higher prices for emission rights. However, the increased cost of manure emission rights is not expected to impede dairy farm growth because the current milk quota rent estimates go far beyond the cost of manure emission rights.

Suggested Citation

  • Van der Straeten, Bart & Buysse, Jeroen & Nolte, Stephan & Marchand, Fleur L. & Lauwers, Ludwig H. & Claeys, Dakerlia & Van Huylenbroeck, Guido, 2008. "A Farm Level Analysis Of The Relation Between Cap Reforms And Local Environmental Legislations: How And In Which Extent Flemish Dairy Farmers Can Fill Up Extra Milk Quota?," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44846, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa109:44846
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    References listed on IDEAS

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    1. Eli Feinerman & Marinus Komen, 2005. "The Use of Organic vs. Chemical Fertilizer with a Mineral Losses Tax: The Case of Dutch Arable Farmers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(3), pages 367-388, November.
    2. Claeys, Dakerlia & Lauwers, Ludwig H. & Marchand, Fleur L. & Van Meensel, Jef & Buysse, Jeroen & Van der Straeten, Bart & Van Huylenbroeck, Guido, 2008. "Derogation on the EU Nitrates Directive: does it make a difference?," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44436, European Association of Agricultural Economists.
    3. Buysse, Jeroen & Van der Straeten, Bart & Claeys, Dakerlia & Lauwers, Ludwig H. & Marchand, Fleur L. & Van Huylenbroeck, Guido, 2008. "Flexible quota constraints in positive mathematical programming models," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6640, European Association of Agricultural Economists.
    4. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 245-260, September.
    5. Van der Straeten, Bart & Buysse, Jeroen & Marchand, Fleur L. & Lauwers, Ludwig H. & Claeys, Dakerlia & Van Huylenbroeck, Guido, 2008. "Fertilization: trade-offs between manure abatement and plant productivity," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43642, European Association of Agricultural Economists.
    6. Kathrin Happe, 2005. "Agricultural policies and farm structures - agent-based simulation and application to EU-policy reform," Others 0504011, EconWPA.
    7. Balmann, Alfons, 1997. "Farm-Based Modelling of Regional Structural Change: A Cellular Automata Approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 85-108.
    8. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 25(2-3), September.
    9. Breen, James P. & Donnellan, Trevor & Hennessy, Thia C. & Thorne, Fiona S., 2008. "A farm level analysis of the impact of milk quota reform: integrating econometric estimation with optimisation models," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6480, European Association of Agricultural Economists.
    10. Rémy Courdier & François Guerrin & Fenintsoa Andriamasinoro & Jean-Marie Paillat, 2002. "Agent-Based Simulation of Complex Systems: Application to Collective Management of Animal Wastes," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 5(3), pages 1-4.
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    Keywords

    milk quota; manure emission rights; mathematical programming; Flanders; Agricultural and Food Policy; Industrial Organization; Research Methods/ Statistical Methods; C02; C61; L11; Q18;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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