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Business management conditions for dairy production in Germany

The recent decisions of the Council of the European Community reforming the milk market as well as reforming the regulations for direct payments (decoupling of direct payments, modulation, cross compliance) and further measures in the German agricultural and financial policy will lead to income reductions for dairy farmers in average. But, in the middle run, these effects can be damped by reductions in production costs, e.g. by using economies of scale or new biotechnical methods in cattle breeding. Dependent on the chosen model of decoupling some dairy farmers can also profit from reforming the Common Agricultural Policy. Nevertheless, most of the dairy farmers will have to accept lower profits as a result from the reduction of intervention prices for butter and milk powder. The consequence will be increasing structural change. Therefore, successful dairy farmers could expand their businesses faster.

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Autor:E. BAHRS


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