Using a Farm Model to Support Agricultural Policy, An Example of Dairy Farms

In this contribution, we provide an example of using farm model to analyse the dairy farming sector. It is a case study for supporting agricultural policy decision-making. We focus only on those farms that mainly operate on permanent grassland. Our aim was to analyse in detail the economic indicators achieved by these diverse group of farms and the significance of CAP measures. It turns out that these farms, in general, achieve slightly poorer results (7.9€/h), comparing with dairy farms on mainly arable land, depending primarily on the size of the herd and the extent of cultivated land. Budgetary payments serve as a significant income source for dairy farms. It's mainly due to these payments, that we observe a decline in economic results for these farms after the CAP reform. Considering the range of measures available in CSP for dairy farms, the situation is expected to deteriorate (6% of GM) on most of these farms, especially if farms decide to participate in one-year Eco-schemes. The results confirm that the farm model approach used is suitable for such analyses in supporting agricultural policy, even at the subgroup level.