Should I stay or should I go? The impact of nature reserves on the survival and growth of dairy farms

Special Areas of Conservation (SAC) are part of the EU's nature protection network Natura 2000. SAC often protect nitrogen-sensitive flora and fauna. This is challenging for livestock farmers because they have to meet strict requirements for emission reduction and need to implement costly environmental protection measures. Therefore, SAC could limit farmers' chances to grow or even to survive. This article aims to determine the effects of SAC on dairy farmers by using a Heckman sample selection model. The model explores i) the factors that are relevant to the decision to maintain the farm's existing structure, increase dairy production, exit dairy, or exit agriculture altogether, ii) an OLS regression to analyse the factors that determine the amount of growth in dairy numbers. The analysis was performed for two periods and is based on annual financial statements and regional data such as information about SAC locations. In the first step, the results confirmed the initial hypothesis, finding that farms in districts with more land under nature conservation had a smaller probability of growth. For one of the two periods analysed, higher probabilities of exiting dairy were observed. The second part of the analysis showed that the amount of growth was not affected by SAC protection. The results indicate that SAC protection is indeed challenging for dairy farmers. Further research on the topic is necessary as the area under protection will increase. Since the protected species also depend on (extensive) farming practices, it might be necessary to provide development prospects to farmers that better align with biodiversity objectives.

Technical efficiency in dairy farms

Purpose

This systematic literature review integrates the findings of existing studies regarding technical efficiency (TE) in dairy farms. The purpose of this paper is to offer a research framework that assembles TE descriptors, a classification of previous literature that provides the basis for the synthesis and research agenda.

Design/methodology/approach

This paper systematically reviews 86 survey research studies using rigorous and reproducible procedures. The review is applied to published survey research.

Findings

The framework relates context, inputs, outputs and metrics of TE. There is no agreement among the authors on the context and determinants of TE. The main determinants of TE are geographical location, farm size, investments in veterinary care, feeding and milking practice, TE model estimation techniques, public policy, and management-related variables. This paper offers ten propositions for future research on the controversial results on the determinants of TE. The authors also explore the reasons for the discrepant results based on the Debreu-Farrell’s definition of TE, the contingency theory and the resource-based view of the firm, elucidating the literature and serving as a basis for future investigation. Implications for dairy farmers and researchers close the review.

Originality/value

Meta-analysis and meta-regression studies were long at the forefront of reviews in the TE of dairy farms. This paper offers a novel qualitative research synthesis with frameworks and the classification of previous literature and a research agenda, which provides a new and different perspective for analysis, by innovating over the available quantitative procedures to combine statistical results.

Total factor productivity change in dairy farming: Empirical evidence from southern Chile

Despite the importance of productivity growth, many studies carried out at the farm level focus primarily on the technical efficiency (TE) component of farm productivity. Therefore, the general purpose of this paper is to measure total factor productivity change and then to decompose this change into several distinct elements. The data were an unbalanced panel for the period from 2005 to 2010 containing 477 farms and 1,426 observations obtained from TODOAGRO, a farm-management center created in 1996 in the southern part of Chile. The region where the data come from accounts for 20% of the total milk processed in the country. Stochastic production frontiers along with the translog functional form were used to analyze total factor productivity change. The econometric evidence indicates that farms exhibit decreasing returns to size implying that costs of production rise as farm size increases, which suggests that the motivation for farm growth stems from the search for income rather than from lowering costs. The main results indicated that productivity gains through TE improvements are limited, with an average TE for the whole sample of 91.0%, and average technical efficiency change of 0.05% per year. By contrast, average technological progress at the sample mean was rather high at 1.90%, which suggests that additional investments in research and subsequent adoption of improved technologies would have a positive effect on productivity growth. The findings also revealed that farm size is not associated with productivity growth for the dairy farms in the sample.