Structural change and dynamic efficiency of German dairy farms - Dairy farm exits and the role of the milk quota

The objective of the research is to improve the understanding of structural change in the German dairy sector. The relevance of this topic emanates from the dynamics of dairy production, which has characterized dairy production in the past, in conjunction with the value that the dairy sector adds to farm income in Germany and the European Union (EU). The aim here is to explore the particular role of the milk quota scheme on farm-level decisions whether to cease milk production or to continue. It is of particular interest whether the milk quota gives farms willing to exit an additional exit premium through selling the quota or whether the quota rent gives farms an incentive to stay in production. For this purpose it is planned to enhance an existing theoretical approach and estimate such a model with German and Dutch panel data from the Farm Accountancy Data Network.