A micro-economic analysis of dairy farming in the Netherlands

A unified framework for analysing the short-term production relationships between outputs and inputs on Dutch dairy farms before and after the introduction of the milk quota system is presented. It is derived from duality theory and estimated using an incomplete panel of Dutch dairy farms. The theoretical framework fits the data well. The supply of unrestricted outputs and the demand for variable inputs are much more responsive to milk quota changes than to price changes. The average estimated shadow price of milk quota in 1984/85–1988/89 was 0.36 guilder per kilogram in 1980/81 prices. The sc... Mehr ...