Dairy and grassland economics in an era of possible expansion

Abstract

Thesis focuses on the efficiency and the Total Factor Productivity (TFP) which is associated with the dairy enterprise of Specialist Dairy farms. The approach uses econometric methods to generate its measures. Special emphasis is given to the effect of milk quota policy on these measures, and this is timely given the abolition of milk quotas as of April 2015. The objectives of this thesis are enumerated below; 1. to establish long term trends in productivity measures using NFS data, 2. to quantify and decompose TFP for Irish dairy farms, 3. to examine the distributional effects of milk quota policy, and 4. to assess the effect of grass utilisation on dairy efficiency. The thesis opens with an in-depth view of quota policy, followed by a more general view of the policy environment that is relevant to dairy farms. Further context is provided with a statistical analysis of long term structural developments in the dairy sector. The analysis of TFP is data intensive, so a detailed discussion of how this requirement is satisfied precedes the analytical chapters. The resulting data are then used to achieve a long-run analysis of dairy productivity. The chapters progress from this long-run Irish analysis to a shorter cross-country comparison which serves as a natural experiment, and finally to a wider selection of countries in an effort to assess the effect grass utilisation has on various forms of efficiency.