Assessing economic incentives for dairy sheep farmers: A real options approach

Irene Tzouramani, Alexandra Sintori, Angelos E. Liontakis and George Alexopoulos

No 43964, 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists

Abstract: New policy measures have been introduced to transform Greece’s agriculture into a more modern and environmentally friendly agriculture. Adopting new technology and environmentally friendly production systems involves risk and uncertainty, which in turn stress the need for well designed policy schemes. This study attempts to examine the effects of income variability upon the decision to adopt new technology and environmentally friendly production systems by introducing the real options analysis to dairy sheep farming in Greece. The real options procedure revealed that the investment in new technology in dairy sheep farms under organic scheme is profitable. Attractive economic incentives that are offered by the applied agricultural policy to young farmers compensate for the risk and uncertainty of the activity.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 8
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae08:43964

DOI: 10.22004/ag.econ.43964

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