In April 2015, the milk quota are abolished. To prevent an increase in the phosphate surplus of the dairy sector, the Netherlands have introduced a new legislation: the dairy farming act or DFA. To analyse the impact of the new legislation on an average Dutch dairy farm, a whole farm linear programming (LP) model was used to simulate changes in farm management and labour income related to the new legislation.
Since the introduction of this act, growth is only possible when it is bound to land. In addition, each farmer in the Netherlands is allocated a certain amount of phosphate rights, based on the total number of dairy cows that were present on the farm in 2014.
To analyse the impact of the new legislation on an average Dutch dairy farm, a whole farm linear programming (LP) model was used to simulate changes in farm management and labour income related to the new legislation. Three scenarios were analysed: A scenario in which the milk quota still existed (scenario 1), a scenario in which the milk quota was abolished and the new legislation has not been introduced (scenario 2) and a scenario in which the milk quota were abolished and the new legislation is introduced (scenario 3). On the last scenario a sensitivity analysis has been done. In scenario 1, the milk quota is the limiting factor, resulting in the lowest number of cows per hectare, the lowest milk production, and the lowest labour income. In scenario 2, stable capacity is the limiting factor. Building extra stable capacity seems not profitable. In this scenario, the number of cows and milk production per hectare is higher than in scenario 1. Also labour income is €17,000 higher than in scenario 1. In scenario 3, phosphate rights are the limiting factor. The stable capacity is not completely used in this scenario. This scenario results in the highest number of cows and the highest milk production per hectare. Labour income is lower than in scenario 2, but €6,000 higher than in scenario 1. The sensitivity analysis shows that costs for extra land do not influence the outcome, because phosphate rights are limiting before land is limiting. Milk price has a major effect on labour income and farm management.
Student: GGG van den Biggelaar
Supervisor: dr ir C van Middelaar