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Economics of Cattle Production Systems Post CAP Reform.
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2001-01-01
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Dunne, W., O'Neill, R., McEvoy, O., Economics of Cattle Production Systems Post CAP Reform, End of Project Reports, Teagasc, 2001.
Abstract
The radical reform of the Common Agricultural Policy (CAP) in the early 1990’s
impacted directly and indirectly on most of the farm enterprises in Ireland. The direct
focus of the reform was largely confined to the cereal and beef enterprises. The
reforms consisted of:
• A phased reduction in the institutional support prices for cereals and beef
of the order of 30 per cent
• A phased switch to a direct payment system of farm income support to
compensate for the product price reductions.
Most farms in Ireland have a cattle enterprise, either alone or in combination with
other land using enterprises. Therefore, the reforms of the CAP affected almost all the
farms in the country either directly or indirectly. For cattle farmers, the potential consequencee of these changes could be far reaching
in terms of their magnitude and their permeation into the details of the husbandry
practices of the production system(s) themselves. These changes clearly impact on the
economic efficiency of beef systems without necessarily affecting technical efficiency
of the systems. The economic optimum cattle production systems would thus be
achieved by using the best mix of feed resource costs, carcass values and direct
payments.
The purpose of the study was to:
• determine the economic impact on the cattle enterprise of the switch to:
• lower EU prices for beef
• lower EU prices for cereals and as a consequence a lower price
for concentrate feeds
• the direct payment system of income support
• identify the economic optimum cattle production system(s) that would
arise from these changes
• quantify the sensitivity of the economic optimum system to key policy,
economic and technical production variables.