Abstract:
Norwegian dairy farming is facing changes in the economic environment. The scope of this dissertation is to study adjustments to these changes. Impacts of changes in prices, subsidies and the farm resource situation on dairy production systems are examined in the first two papers. In the first paper a production-function approach is applied. In the second paper dairy farms models (LP) are developed. If forage is offered ad libitum, forage intake fall and milk yield increase as cows are fed more concentrates. Effects of this characteristic (forage as an inferior input) are examined. Representation of milk quotas and the biology of milk production systems yield valuable policy information about farm level adjustments. Within a quota system, milk price support is a targeted instrument to improve farm incomes. Area and headage payments have effects on production, as lower yielding but more cows increase grassland utilization. Production of public goods may then be encouraged.
In the third paper a simulation model is developed to study effects of different rates of structural change on social costs of milk production and employment. Fast restructuring results in the lowest cost. Much of the cost savings achieved by large farms can be attributed to lower labor input, having negative impacts on rural viability. Rural landscapes, biodiversity, heritage values etc. may also be damaged. The balance between cost savings and rationales for retaining small farms is a complex issue.

Key words: Dairy farming, production economics, farm models, multifunctionality, structural change.

The dissertation was handed to the committee for evaluation in July 2002, and successfully defended on February 7, 2003. Professor Harald Giæver was the advisor of this dissertation.

Ola Flaten was born in Alvdal in 1966. He holds a Master of Science (cand. agric.) in Agricultural Sciences from the Agricultural University of Norway (1990). Currently he works as a researcher in the Norwegian Agricultural Economics Research Institute in Oslo, Norway.

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