Competitiveness of Dairy Farms In Northern Europe: A Cross-Country analysis

The milk sector has received much attention in Europe due to the abolition of milk quotas in 2015 and its potential effect on the geographical distribution of milk production across countries. As a way of assessing the competitive advantage of Nordic EU countries, we investigated the productivity level and productivity growth of milk farms across eight countries of the Baltic Sea region from 1995 to 2010. We found considerable discrepancy in the productivity performance of dairy farms across countries. TFP growth rates indicate that, at farm level, the competitive positions of the older EU members are stable, and that there is no catching up from the newer EU entrants. We offer explanations for this evolution based on the different patterns of structural change followed by the studied countries.