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Economic Sustainability of Dairy Farms in the EU

Author

Listed:
  • Piotr Borawski
  • Adam Pawlewicz
  • Bartosz Mickiewicz
  • Katarzyna Pawlewicz
  • Aneta Bełdycka-Borawska
  • Lisa Holden
  • Agnieszka Brelik

Abstract

Purpose: The objective of this research is to evaluate changes in the economic sustainability of dairy farms in the European Union (EU) countries during 2007-2016 when dairy quotas were being removed in the EU. We wanted to answer the question what is the economic sustainability of dairy farms in the EU, and how has the economic sustainability in the EU countries changed after the accession of new member states in 2004 and 2017. Design/Approach/Methodology: An economic sustainability assessment of farms was conducted using the Farm Accountancy Data Network (FADN) census data with several economic efficiency indicators. We analyzed variables using the Hellwig method. Findings: Results indicate that milk production increased in almost all the countries of the EU, as did their economies. The largest annual increase in standard output (SO) was in Denmark, Slovakia, Czech Republic, Sweden and United Kingdom. In turn, the smallest annual increase in SO was in Lithuania, Bulgaria, Latvia and Poland. Dairy farms in the Czech Republic and Denmark had the highest economic sustainability, while dairy farms in Bulgaria, Croatia, Poland, Romania and Slovenia had the lowest economic sustainability. Practical Implications: While not providing a comprehensive assessment, the indicators used do provide important information about economic impacts related to the scale and distribution of production, difference in labor cost, sources of income and maintenance of farms. Originality/Value: Modern dairy farms must have production efficiency and environmental compliance to achieve sustainability. Much of the current literature focuses on the efficiency and environmental aspects of sustainability and there is a lack of data that assesses economic sustainability.

Suggested Citation

  • Piotr Borawski & Adam Pawlewicz & Bartosz Mickiewicz & Katarzyna Pawlewicz & Aneta Bełdycka-Borawska & Lisa Holden & Agnieszka Brelik, 2020. "Economic Sustainability of Dairy Farms in the EU," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 955-978.
    • Handle: RePEc:ers:journl:v:xxiii:y:2020:i:special1:p:955-978
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    References listed on IDEAS

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    1. Awudu Abdulai & Hendrik Tietje, 2007. "Estimating technical efficiency under unobserved heterogeneity with stochastic frontier models: application to northern German dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(3), pages 393-416, September.
    2. Boulanger, Pierre & Philippidis, George, 2015. "The EU budget battle: Assessing the trade and welfare impacts of CAP budgetary reform," Food Policy, Elsevier, vol. 51(C), pages 119-130.
    3. Alpmann, Jan & Bitsch, Vera, 2017. "Dynamics of asymmetric conflict: The case of the German Milk Conflict," Food Policy, Elsevier, vol. 66(C), pages 62-72.
    4. Antonio Alvarez & Julio del Corral, 2010. "Identifying different technologies using a latent class model: extensive versus intensive dairy farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(2), pages 231-250, June.
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    Cited by:

    1. Beata Kalinowska & Piotr Bórawski & Aneta Bełdycka-Bórawska & Bogdan Klepacki & Aleksandra Perkowska & Tomasz Rokicki, 2022. "Sustainable Development of Agriculture in Member States of the European Union," Sustainability, MDPI, vol. 14(7), pages 1-21, March.

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    More about this item

    Keywords

    Milk production; economic sustainability; dairy farms; European Union (EU).;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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