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

Bruno Henry de Frahan, Alexandre Baudry, Rembert De Blander (), Philippe Polome () and Richard Howitt

European Review of Agricultural Economics, 2011, vol. 38, issue 4, 469-495

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.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://hdl.handle.net/10.1093/erae/jbr013 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Dairy farms without quotas in Belgium: estimation and simulation with a flexible cost function (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:erevae:v:38:y:2011:i:4:p:469-495

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

European Review of Agricultural Economics is currently edited by Timothy Richards, Salvatore Di Falco, Céline Nauges and Vincenzina Caputo

More articles in European Review of Agricultural Economics from Oxford University Press and the European Agricultural and Applied Economics Publications Foundation Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().