Decoupling and prices: determinant of dairy farmers’ choices?

Découplage et prix: les déterminants du choix des éleveurs laitiers ?

Baptiste Lelyon, Vincent Chatellier and Karine Daniel
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Baptiste Lelyon: Département Economie - IDELE - Institut de l'élevage

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Abstract: In this paper, we discuss the cross-effects on the productive strategy of French dairy farms due to the decoupling and to price variation. A model based on mathematical programming has been developed to determine how dairy farmers might re-evaluate their systems to identify an optimal production plan. The model is applied to four types of dairy farms in order to analyze the impact of the reform depending on farm's activities. The simulations point out how the implementation of the decoupling encourages farmers to increase the share of grassland. However, the increase in cereal prices is a strong incentive to intensify forage production to free up land for crop production. Finally, after four years of decoupling, this study helps to put into perspective the theoretical effects of decoupling and the actual choices made by farmers. This article identifies six factors which could explain these differences: the long-term production requirements, the eligibility criteria for the direct payment, the sociology/psychology of the farmer, the anticipation of a new reform, the trade organization and the value of property assets.

Keywords: common agricultural policy; dairy farm; single payment; decoupling; mathematical programming; price variation (search for similar items in EconPapers)
Date: 2011
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02641921v1
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Published in Revue d'Etudes en Agriculture et Environnement - Review of agricultural and environmental studies, 2011, 92 (1), pp.47-68

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Journal Article: Decoupling and prices: determinant of dairy farmers’ choices? (2011)
Journal Article: Decoupling and prices: determinant of dairy farmers’ choices? (2011)
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