The agrarian question in dairy farms: An analysis of dairy farms in the European Union countries

Abstract

AbstractIn this article, we review the Agrarian Question focusing on dairy farms. We have the dual aim of adding to the debate surrounding the economic profitability of small and large dairy farms and increasing what is known about the decline of dairy farms. The agrarian question at the heart of our research centres on the paradoxical endurance of family farms, despite predictions from both liberal and Marxist perspectives that they would diminish in number over time. By addressing these complex issues, we hope to shed light on the challenges and opportunities facing the dairy industry today. We focus on analysing dairy farms in the European Union countries, using panel regressions from 2008 to 2018 to define the relationship between the average number of cows per farm, profit margins and Farm Net Income. The most important results show that (i) paradoxically, profits were higher on smaller farms; (ii) however, empirical data show that small dairy farms are disappearing; (iii) this is because when including subsidies, farms with a higher number of cows are more profitable than smaller farms.