Dairy Intensification and Quota Abolition: A Comparative Study of Production in Ireland and the Netherlands

Abstract

SummaryThe milk quota abolition in 2015 set in motion major adjustments in the EU dairy sector and considerable differences in expansion and contraction of milk production are observed across Member States. Despite significant differences in production methods, Ireland and the Netherlands are among the EU countries that achieved the largest dairy production growth rates. This article compares and contrasts Irish and Dutch dairy farms that intensified and expanded production. To this end, Farm Accountancy Data Network data of specialised dairy farms are used and Principal Component Analysis was performed with a view to assessing common themes and differences in intensification efforts. In both countries, farms that intensified their production have higher gross investments and larger dairy herds, when compared to the average dairy farm in their country. The Principal Component Analysis revealed farm size variables, dairy specialisation and direct payments, as well as investments and financial leverage as common themes of intensification, with differing importance in the two countries. Implications of intensification for policies to ensure longer‐term sustainability are discussed.