Dynamics of dairy farm productivity growth

Abstract

This report compares the dynamics of productivity growth in the last decade in the dairy farm sector of three EU Member States: Estonia, the Netherlands and the United Kingdom (England and Wales). The evolution of the dairy farm sector in these countries is characterised by a decline in the number of dairy farms and an increase in the average herd size per farm. Policy factors have a strong impact on productivity growth at the farm. In Estonia, the dairy farm sector has expanded significantly in recent years and the productivity growth of the sector is led largely by a resource reallocation in favour of a small number of large and productive farms. In the Netherlands, the dairy farm sector adjusted to the different policy environments over time and the productivity growth of the sector is driven largely by productivity improvement at the farm level through technological adoption and efficient resource use. In the United Kingdom, productivity growth comes from the exit of smaller farms and farm size expansion of the remaining farms.