Dairy Farmers’ Strategies against the Crisis and the Economic Performance of Farms

AbstractDairy farming in Greece constitutes a particular case of livestock farming, because of its highly entrepreneurial nature. The modern Greek dairy cattle farming is predominantly based in Northern Greece, where more than 80% of Greek cow milk is produced. Since the 2000's the dairy cattle sector is characterized by a rapid increase in the mean size of farms, which permits them to undertake investments in machinery and buildings and to have access to improved genetic material for the achievement of higher productivity. Nevertheless, this development renders dairy farms vulnerable to volatile economic conditions, as they are heavily dependent on capital endowments. The main purpose of this study is to examine the consequences of the economic crisis on the dairy cattle sector and the strategies undertaken by farmers to cope with it. The analysis is based on data from a questionnaire survey of farmers in Northern Greece. Strategies undertaken by dairy farmers in order to face the crisis and to ensure the survival of their businesses are recorded through a set of Likert-scale questions. Technical and economic data are also analyzed in order to examine the economic performance of farms, revealing that the sampled dairy farms are viable, with satisfactory economic results, with capital returns of 6.2% annually. Based on the Likert-scale data, dairy farmers adopt active strategies to face the crisis, by undertaking investments and augmenting their farm sizes, while they deem that the crisis does not have catastrophic results on the profitability of their farms. On the other hand, strategies which entail less expenses and/or diminished productivity are unpopular among dairy farmers. Finally, the vast majority of respondents claim to have seen negative consequences on their farms from the recent measures concerning the prolongation of the duration of fresh milk in retail markets: lower quality, increased vulnerability to international competition, shrinking dairy sector