Explaining Differences in Milk Quota Values: The Role of Economic Efficiency

Abstract

This article explores the relationship between milk quota values and economic efficiency in order to analyze government interventions in quota allocations among producers. For this purpose, we estimate quota values using a panel of Spanish dairy farms. Quota values are then decomposed into economic efficiency, price, and scale effects in order to assess the relative influence of these factors. We find that efficiency is important in explaining quota values but is uncorrelated with observable farm characteristics. This casts doubts on the government's ability to allocate quotas to efficient farms. Copyright 2006, Oxford University Press.

Deregulation and dairy production systems: a Bayesian distance function approach

“…cows. This approach is also followed by Stefanou et al (1992); Ooms and Peerlings (2005) and Alvarez et al (2006). K À 1; and od In =oy l \0 for l ¼ 1; 2. .…”

“…The authors conclude, that the reform steps led to a threat for many small milk farms. Alvarez et al (2006) use a panel of Spanish dairy farms to explore the relationship between milk quota values and economic efficiency. Estimated quota values are then decomposed into efficiency, price, and scale effects to assess the relative influence of these factors.…”

Feed prices and production costs on Spanish dairy farms

“…10 This phenomenon can be captured by considering milk and meat as an aggregate product (Pierani & Rizzi, 2003), as independent products (Stefanou et al, 1992;Cathagne et al, 2006) or excluded altogether (Colman et al, 2005;Álvarez et al, 2006;Álvarez & Del Corral, 2010). 11 Some studies also consider long-run family labour input (e.g.…”

A multi-agent simulation model for spatial optimisation of manure allocation

“…Despite the reality of strong rigidities and transaction costs in quota markets, their modelling is often based on a perfect market for quota rights (Alvarez et al, 2006;Brannlund et al, 1998;Bureau et al, 1997;Fraser et al, 1997;Mahler, 1994;Van Passel et al, 2006). ) with E mft being the amount of exported manure of manure type m from the farm to transport firm t, I mft the amount of incoming manure of manure type m at the farm from transport firm t and T mt1t2 the amount of manure of manure type m transported from transport firm t 1 to transport firm t 2 .…”