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Are Diversification And Structural Change Good Policy? An Empirical Analysis Of Norwegian Agriculture

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  • ALEM, HABTAMU
  • LIEN, GUDBRAND
  • KUMBHAKAR, SUBAL C.
  • HARDAKER, J. BRIAN

Abstract

We investigated whether diversification and/or structural change would improve Norwegian agriculture. Using a flexible technology approach to account for different technologies, we assessed economies of scope and scale of dairy and cropping farms, including regional differences. We fitted translog cost functions to farm-level panel data for the period 1991–2014. We found both economies of scope and scale on the farms. Dairy farms have an economic incentive to integrate dairying with cropping in all regions of Norway, and vice versa. Thus, policy makers should eschew interventions that inhibit diversification or structural change and that increase the costs of food production.

Suggested Citation

  • Alem, Habtamu & Lien, Gudbrand & Kumbhakar, Subal C. & Hardaker, J. Brian, 2019. "Are Diversification And Structural Change Good Policy? An Empirical Analysis Of Norwegian Agriculture," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(1), pages 1-26, February.
    • Handle: RePEc:cup:jagaec:v:51:y:2019:i:01:p:1-26_00
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    Citations

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    Cited by:

    1. Habtamu Alem, 2021. "The Role of Technical Efficiency Achieving Sustainable Development: A Dynamic Analysis of Norwegian Dairy Farms," Sustainability, MDPI, vol. 13(4), pages 1-11, February.
    2. Hirsch, Stefan & Barissoul, Ayoub & Möhring, Niklas & Koppenberg, Maximilian, 2024. "Market power, profitability and the decision to exit organic dairy farming in the EU," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344258, International Association of Agricultural Economists (IAAE).
    3. Claire Jack & Austen Ashfield & Adewale Henry Adenuga & Conall Mullan, 2021. "Farm Diversification: Drivers, Barriers and Future Growth Potential," EuroChoices, The Agricultural Economics Society, vol. 20(2), pages 70-75, August.
    4. repec:ags:aaea22:335708 is not listed on IDEAS
    5. Maximilian Koppenberg, 2023. "Markups, organic agriculture and downstream concentration at the example of European dairy farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 161-178, March.
    6. M’hand Fares & Fateh Mamine, 2023. "Relative Importance of Barriers and Levers to Intercropping Systems Adoption: A Comparison of Farms and Co-Operatives," Sustainability, MDPI, vol. 15(8), pages 1-15, April.
    7. Kumbhakar, Subal C. & Li, Mingyang & Lien, Gudbrand, 2023. "Do subsidies matter in productivity and profitability changes?," Economic Modelling, Elsevier, vol. 123(C).

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