Modelling dairy farm size distribution in Poland using an instrumental variable generalized cross entropy markov chain approach

The aim of this paper is to analyse the evolution of the dairy farm structure of Poland during the post-socialist period. First the paper focuses on how the farm structure has changed over time and what path it is likely to follow in the coming decade. Second, it is tested whether the evolution of farm size is explained by non-stationary effects. Finally, several statistical indicators are computed on farm mobility and on which farms are likely to survive. An instrumental variable generalised cross entropy Markov chain approach which incorporates prior information is applied for estimation. Prior information included general and plausible information on farm mobility and structural adjustments based on independent literature. The projections show that dairy farm numbers will continue to decline, although accompanied by an increase in the number of medium-sized and large farms. Subsistence dairy farms are expected to slowly leave the sector in the coming decade

The 'milk quota rent puzzle' in the EU: economic significance, review and policy relevance

In the so-called Common Agricultural Policy (CAP) 'Health Check' the European Commission has recently proposed gradual transitional measures to allow a 'soft landing' of the milk sector to quota expiry. The aim of this paper is to support policy makers to get better insights in the implications of some of the most important economic assumptions and empirical choices made in partial equilibrium models focusing on dairy. Three partial equilibrium models are considered: the Agricultural Member states MODeling (AGMEMOD) model, the Common Agricultural Policy SIMulation (CAPSIM) model, and the European Dairy Industry Model (EDIM). The paper analyzes how the most important economic supply components, as they are part of the three key dairy models, affect milk production projections. A main conclusion is that the evaluation of the contribution of a study should not be based on one single characteristic (such as quota rents, supply responses). One isolated characteristic is not able to explain finally obtained model outcomes. Quota rents, supply responses, shifters and the demand side have to be integrated with each other

VOLUNTARY CERTIFICATION SCHEMES AND LEGAL MINIMUM STANDARDS

EU farmers face increasing requests to comply with legal as well as private agribusiness and retail standards. Both requests potentially raise farmer’s administrative burden. This paper discusses the potential synergies between cross-compliance and third-party certification schemes. In selected aspects cross-compliance and several certification schemes ask similar measures. However, both regulatory approaches differ considerably in other areas. The heterogeneous nature of the various certification schemes in place prevent a general conclusion. As a tendency systemic standards like organic agriculture provide the largest overlap with cross-compliance. Certificates of origin, on the opposite side, have no relation with cross-compliance.Cross-compliance, certification schemes, institutional economics, Common Agricultural Policy, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Financial Economics,

Explaining Growth in Dutch Agriculture: Prices, Public R&D, and Technological Change

This paper analyzes the sources of growth of Dutch agriculture (arable, meat, and dairy sectors). Because the time series data (1950-1997) are non-stationary and not cointegrated, it is argued that a model estimated in first differences should be used. Estimated price elasticities turn out to be very inelastic, both in the short-run and the long-run. The direct distortionary effect of price support has therefore been rather limited. However, price support has an important indirect effect by improving the sectors investment possibilities and therewith the capital stock. Public R&D expenditure mainly affected agriculture by contributing to yield improvement therewith favoring intensification of production.growth, technology, cointegration, non-stationarity, agricultural policy, Agribusiness, Q18, O13,

THE 'MILK QUOTAS RENT PUZZLE' IN THE EU: ECONOMIC SIGNIFICANCE, REVIEW, AND POLICY RELEVANCE

In the so-called Common Agricultural Policy (CAP) 'Health Check' the European Commission has recently proposed gradual transitional measures to allow a 'soft landing' of the milk sector to quota expiry. The aim of this paper is to support policy makers to get better insights in the implications of some of the most important economic assumptions and empirical choices made in partial equilibrium models focusing on dairy. Three partial equilibrium models are considered: the Agricultural Member states MODeling (AGMEMOD) model, the Common Agricultural Policy SIMulation (CAPSIM) model, and the European Dairy Industry Model (EDIM). The paper analyzes how the most important economic supply components, as they are part of the three key dairy models, affect milk production projections. A main conclusion is that the evaluation of the contribution of a study should not be based on one single characteristic (such as quota rents, supply responses). One isolated characteristic is not able to explain finally obtained model outcomes. Quota rents, supply responses, shifters and the demand side have to be integrated with each other.milk quota rents, supply response, shifters, dairy policy, equilibrium models., Agricultural and Food Policy, Political Economy, Research Methods/ Statistical Methods, C01, C02, Q12, Q13.,

Structural Change in the Dairy Sectors of Germany and The Netherlands - A Markov Chain Analysis

With the milk quota announced to be abolished in the future, the dairy sector is going to face a significant policy regime shift. This paper sets out to analyze the impact of milk quotas on the dairy farm structure of two important milk producing member states: Germany and the Netherlands. Based on proper behavioral assumptions, non stationary Markov chain models are specified and estimated using a generalized cross entropy procedure, which takes into account both sample and prior information. Moreover four mobility indicators characterizing structural change are developed and calculated. Structural change in the dairy sector as measured by the mobility measures is faster in West Germany than in the Netherlands. However, in the transition region East Germany structural change outpaces that of the traditional German and Dutch dairy sectors by a factor two or more. The introduction of milk quotas as of April 1, 1984 reduced overall farm mobility for the Netherlands, but increased mobility in West Germany. However, in both cases the milk quotas lead to an increase in upward mobility.Markov Chain, Milk Quota, Structural Change, Livestock Production/Industries,

Teaching Agricultural Policy Using Games: The Agripol Game

We developed the AGRIPOL game as a tool for teaching agricultural policy to economic and non-economic students. AGRIPOL consists of a world with 7 different countries, each one represented by a small group of students. The students have to maximize their country's social welfare by choosing an optimal set of policy instruments. By doing this students learn in an interesting and hands-on way to understand the workings of agricultural policy instruments, the interrelatedness between countries (policy impact spill-overs) and the role of political weights in the policy formation process. A WTO negotiation round is included to let students experience the difficulties and benefits of cooperation.economics education, political economy, agricultural policy, Teaching/Communication/Extension/Profession, A2, P16, Q18,

THE GROWTH IN ORGANIC AGRICULTURE: TEMPORARY SHIFT OR STRUCTURAL CHANGE?

This paper investigates the growth in the number of organic producers in the Netherlands. Using Bayesian techniques a logistic growth model explaining the share of organic farms is estimated. Prior information is used to estimate and compare three different models on the future of organic farming.Farm Management,

Modelling the Dairy Farm Size Distribution in Poland Using an Instrumental Variable Generalized Cross Entropy Markov Approach

The aim of this paper is to analyse the evolution of the dairy farm structure of Poland during the post-socialist period. First the paper focuses on how the farm structure has changed over time and what path it is likely to follow in the coming decade. Second, it is tested whether the evolution of farm size is explained by non-stationary effects. Finally, several statistical indicators are computed on farm mobility and on which farms are likely to survive. An instrumental variable generalised cross entropy Markov chain approach which incorporates prior information is applied for estimation. Prior information included general and plausible information on farm mobility and structural adjustments based on independent literature. The projections show that dairy farm numbers will continue to decline, although accompanied by an increase in the number of medium-sized and large farms. Subsistence dairy farms are expected to slowly leave the sector in the coming decade.dairy, farm size, Poland, Markov chain, generalised cross entropy., Livestock Production/Industries,

Explaining the Changing Institutional Organisation of Dutch Farms: The Role of Farmer's Attitude, Advisory Network and Structural Factors

Although the family farm remains the dominant organisational form for farms there are changes in the legal mode of organisation. Applying the new institutional economics and economic organisation theory the different organisation modes are explained, mainly in terms of control and income rights. Important factors are (limited) liability, risk-bearing costs, transaction costs, and residual control and income rights. In an empirical follow-up, based on a sample among 3100 farmers in the Netherlands, the impact of farmers' attitudes, farm advisory network, and structural variables on organisation choice are analysed. Especially the financial advisors appear to play a significant role in the choice of organisation mode. Other factors are age, branche (horticulture, factory farming), and farm size.farm organisation, ownership and management, liability, risk, residual control and income rights, attitudes, advisory network, Farm Management, Industrial Organization, Q12,