Economic-environmental modelling of Dutch dairy farms incorporating technical and institutional change

Abstract

Circumstances in Dutch dairy farming are changing continuously. The general objective in this thesis was to develop and apply a method to enlighten the consequences of these changing circumstances for dairy farms. The research was started with the development of a linear programming model of a dairy farm. The model contains activities for common production processes on dairy farms like grass and silage maize production and milk production. To register nutrient flows nitrogen, phosphate and potassium balances at soil, animal and farm level were included in the model. The model was tested and validated based on average results in practice.Scenario analysis was used to assess consistent scenarios for technical and institutional change. Analysis of historical data taking into account external changes was done to assess future technical change of fodder and milk production. Institutional change included national environmental policy and EU market and price policy. For national environmental policy a moderate and a severe variant of a nutrient balance system with levies on unacceptable surpluses were formulated. For EU market and price policy the two alternatives used were continuation of the current system and a system with decreased milk quota receiving a high price combined with free additional milk production receiving a low price.One forecast for technical change, two for environmental policy and two for market and price policy resulted in four scenarios. Using the farm model the consequences of the scenarios for 2005 were calculated. The results showed that technical change contributes to both farm income and reduction of nutrient surpluses. Environmental policy and the two-price-policy for milk tend to decrease income. Besides, the two-price-policy tends to increase milk production by increasing numbers of animals conflicting with environmental policy. In general consequences of the scenarios are larger for more intensive farms. The final step in this thesis was extension of the model in a spatial and a seasonal dimension in order to realize a more realistic representation of nitrogen flows.</p