Diversity of the European dairy farms and potential effects of the Common agricultural policy reform

Abstract

The aim of this article is, on the one hand, to highlight the strong diversity of the European dairy farms and, on the other hand, to analyse the potential effects of the Common agricultural policy (CAP) reform (June 2003) on their economic results (farm income, direct subsidies, single payment). Thanks to the individual data of the Farm Accountancy Data Network (FADN) of the fifteen Member States, this analysis takes into account the main characteristics of the dairy farms distributed according to several production areas, technical systems, size classes (dairy quota by farm) and economic performances classes (according to a method of classification privileging three indicators). On the assumption of a significant fall in the milk price, the CAP reform would induce a significant fall of the income of the specialized farms, especially those which are economically not very efficient. In all the cases, it will involve a significant increase of the direct subsidies. The amount of the single payment per hectare will be different between production areas and within each of them, according to intensification level and fodder system.