ABSTRACT
This paper incorporates the milk quota system into technical efficiency analysis of dairy farms in England and Wales. Our approach accounts for milk quota trade, allowing an investigation of the relationship between the way in which milk quota market is used by farmers and technical efficiency. In addition, several explanatory variables for inefficiency were used. Results obtained from a Bayesian stochastic frontier analysis show that the way in which farmers use the milk quota market is linked to farm efficiency. Other aspects such as environmental payments received by the farmer are linked to inefficiency.
Subject(s)
Dairying/methods , Milk/supply & distribution , Animals , Bayes Theorem , Cattle , Dairying/legislation & jurisprudence , Dairying/organization & administration , Efficiency, Organizational , England , Stochastic Processes , WalesABSTRACT
BACKGROUND/OBJECTIVES: Previous studies have analysed impacts on average intakes. Agueably however intakes that are of real concern are those which are some distance away from the recommendations. Fiscal measures might have a limited impact on such diets, and as a result, on health. We measure the impact of a fiscal intervention on the the risks of diet-related disease, accounting for the full range of diets. SUBJECTS/METHODS: Demand equations are estimated with data collected from 6760 households in the UK Expenditure and Food Survey. The model is used to simulate the impacts of a policy, in which a tax based on saturated fat content is combined with subsidy on fruit and vegetables. Changes in consumption are used to compute the effects on the risks of a range of diet-related disease using measures of relative risk. In contrast with other studies, we simulate the impacts of the fiscal regime at the level of the individual households in the sample. RESULTS: The subsidy brings mean levels of fruit and vegetable consumption in line with dietary recommendations, but the tax is insufficient to achieve this goal for fat intakes. Once the changes in diet are converted into changes in the risks of disease, the impacts of the policy are negligible. A substantial part of the population continues to consume an unhealthy diet. CONCLUSION: Fiscally based interventions should be considered amongst a suite of policy interventions, which also include policies aimed at improving the poorest of diets.
