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An Analysis of the Impact of Alternative EU Dairy Policies on the Size Distribution of Dutch Dairy Farms: an Information Based Approach to the Non-Stationary Markov Chain Model


  • Jongeneel, Roelof A.


This paper analyses the impact of the dairy quota scheme on the size distribution of the Dutch dairy industry. A non-stationary Markov model approach is use, where the transition probabilities are explained by a set of exogenous (policy) variables. Using an information theoretical approach, a model is estimated for The Netherlands and used to simulate the impacts of alternative EU dairy policies. Several results emerged: a) There is an autonomous over time decline in farm numbers (implying increase in farm size). b) The dairy quota regime positively influences 'small' and 'medium' farm sizes; c) Abolition of the dairy quota will negatively affect the total number of active farms and favours further increase of farm scale. d) Targeting support according to needs increases the number of active dairy farms as compared with the status quo.

Suggested Citation

  • Jongeneel, Roelof A., 2002. "An Analysis of the Impact of Alternative EU Dairy Policies on the Size Distribution of Dutch Dairy Farms: an Information Based Approach to the Non-Stationary Markov Chain Model," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24892, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae02:24892

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    References listed on IDEAS

    1. Amos Golan & Stephen Vogel, 2000. "Estimation of Non-Stationary Social Accounting Matrix Coefficients with Supply-Side Information," Economic Systems Research, Taylor & Francis Journals, vol. 12(4), pages 447-471.
    2. MacRae, Elizabeth Chase, 1977. "Estimation of Time-Varying Markov Processes with Aggregate Data," Econometrica, Econometric Society, vol. 45(1), pages 183-198, January.
    3. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    4. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    5. Ellen Goddard & Alfons Weersink & Kevin Chen & Calum G. Turvey, 1993. "Economics of Structural Change in Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(4), pages 475-489, December.
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    Cited by:

    1. Piet, Laurent, 2008. "The evolution of farm size distribution: revisiting the Markov chain model," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44269, European Association of Agricultural Economists.


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