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Decoupling and prices: determinant of dairy farmers’ choices?

Author

Listed:
  • Baptiste Lelyon

    (Institut de l’Elevage, Département Economie, 149 rue de Bercy, 75595 Paris cedex 12, France)

  • Vincent Chatellier

    (INRA, UR1134, LERECO, rue de la Géraudière, 44316 Nantes, France)

  • Karine Daniel

    (PRES LUNAM Université, ESA (Ecole Supérieure d’agriculture), LARESS, 55 rue Rabelais, 49007 Angers, chercheur associé INRA, UR1134, LERECO, rue de la Géraudière, 44316 Nantes, France)

Abstract

In this paper, we discuss the cross-effects on the productive strategy of French dairy farms due to the decoupling and to price variation. A model based on mathematical programming has been developed to determine how dairy farmers might re-evaluate their systems to identify an optimal production plan. The model is applied to four types of dairy farms in order to analyze the impact of the reform depending on farm’s activities. The simulations point out how the implementation of the decoupling encourages farmers to increase the share of grassland. However, the increase in cereal prices is a strong incentive to intensify forage production to free up land for crop production. Finally, after four years of decoupling, this study helps to put into perspective the theoretical effects of decoupling and the actual choices made by farmers. This article identifies six factors which could explain these differences: the longterm production requirements, the eligibility criteria for the direct payment, the sociology/psychology of the farmer, the anticipation of a new reform, the trade organization and the value of property assets.

Suggested Citation

  • Baptiste Lelyon & Vincent Chatellier & Karine Daniel, 2011. "Decoupling and prices: determinant of dairy farmers’ choices?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(1), pages 47-68.
    • Handle: RePEc:rae:jourae:v:92:y:2011:i:1:p:47-68
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    Cited by:

    1. Chatellier, Vincent & Guyomard, Herve, 2012. "The October 2011 Legislative Proposals for CAP Reform: A French Point of View," 126th Seminar, June 27-29, 2012, Capri, Italy 126988, European Association of Agricultural Economists.
    2. Kamel Elouhichi & Maria Espinosa Goded & Pavel Ciaian & Angel Perni Llorente & Bouda Vosough Ahmadi & Liesbeth Colen & Sergio Gomez Y Paloma, 2018. "The EU-Wide Individual Farm Model for Common Agricultural Policy Analysis (IFM-CAP v.1): Economic Impacts of CAP Greening," JRC Research Reports JRC108693, Joint Research Centre.

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    More about this item

    Keywords

    dairy farm; single payment; decoupling; price variation; mathematical programming; technical system;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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