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CABI Book Chapter

The economics of regulation in agriculture: compliance with public and private standards.

Book cover for The economics of regulation in agriculture: compliance with public and private standards.


This volume investigates the cost implications and competitiveness effects resulting from regulations and standards in the fields of environment, human health and animal welfare and production-linked rules of "good agricultural conditions" for a range of agricultural products in the EU, USA, Canada and New Zealand. Part I of the book (chapters 2-6) highlights changes taking place in developed coun...


Chapter 7 (Page no: 117)

Environmental and health standards in the dairy sectors of the EU, the US and New Zealand.

This chapter discusses the environmental compliance costs issues in the dairy sector of the European Union, and the implications of those issues for farm level and external competitiveness between the EU and the USA and New Zealand. The impact of compliance to standards on production costs in the dairy sector were estimated using a farm level analysis, taking into account actual farm accountancy data. Representative farm studies were conducted and used as a basis for the cost calculations. It was shown that the nitrates standard caused the most significant impact. At the sector level, full compliance to the nitrates standard for all affected farmers involved an increase in production costs between 0.1 and 0.6%, with rates varying between EU Member States. When the standards for nitrate pollution taken by the USA and New Zealand were taken into account, along with a full compliance assumption in all countries analysed, the trade balance was impacted by 1.07% and resulted in a lower decline of EU exports (about 0.41%). Aside from cost differences induced by environmental and animal registration regulations, differences in labour costs (fixed costs) per 100 kg of milk between the considered countries also accounted (and was more important) for the dairy farm sector's competitiveness.

Other chapters from this book

Chapter: 1 (Page no: 1) Introduction. Author(s): Brouwer, F. Fox, G. Jongeneel, R.
Chapter: 2 (Page no: 9) The role of cross compliance in greening EU agricultural policy. Author(s): Hart, K. Farmer, M. Baldock, D.
Chapter: 3 (Page no: 29) State and federal responses to increasing input intensity in the US. Author(s): Winsten, J. Knight, L. G.
Chapter: 4 (Page no: 55) Canadian agricultural environmental policy: from the right to farm to farming right. Author(s): Rajsic, P. Ramlal, E. Fox, G.
Chapter: 5 (Page no: 79) Decentralized, outcome oriented management of agricultural environmental issues in New Zealand. Author(s): Meister, A. Beechey, N.
Chapter: 6 (Page no: 97) Voluntary certification schemes and legal standards in the EU. Author(s): Jongeneel, R. Herzfeld, T.
Chapter: 8 (Page no: 131) An EU/US perspective on nutrient management policies and growth hormone bans in the beef sector. Author(s): Roest, K. de Winsten, J. Dillen, K.
Chapter: 9 (Page no: 147) Good agricultural and environmental conditions in the EU and their implications for international trade in cereals. Author(s): Jongeneel, R. Poux, X. Fox, G.
Chapter: 10 (Page no: 165) Trade effects of environmental and animal welfare standards in the hog sectors of the EU, US and Canada. Author(s): Roest, K. de Winsten, J. Rajsic, P. Dillen, K.
Chapter: 11 (Page no: 181) Environmental standards in the fruits and vegetables sector of Spain. Author(s): Varela-Ortega, C. Esteve, P.
Chapter: 12 (Page no: 197) Evaluating WTO institutions for resolving trade disputes involving non-tariff measures: four cases involving Brazil. Author(s): Miranda, S. H. G. de
Chapter: 13 (Page no: 215) Meeting standards in EU agriculture: the changing policy context. Author(s): Swales, V.
Chapter: 14 (Page no: 233) The pollution haven hypothesis and the location of livestock production: two North American case studies. Author(s): Weersink, A.
Chapter: 15 (Page no: 247) Cost effectiveness of sediment abatement policies in potato production: assessing policies in Canada, the Netherlands and the US. Author(s): Jatoe, J. B. D. Weersink, A. Deaton, B. J. Yiridoe, E. K.
Chapter: 16 (Page no: 263) Environmental compliance costs in developed country agricultures: implications for trade and competitiveness. Author(s): Fox, G. Brouwer, F.