Servizio Comunitario di Informazione in materia di Ricerca e Sviluppo - CORDIS

Final Activity Report Summary - MODLAIT (Regional modelling of dairy sector and assessment for a sustainable development in a less-favoured region - REUNION)

The dairy sector at la Reunion, one of the less-favoured regions in France, has known a dynamic growth since the sixties. But the institutional and societal changes have raised new questions in terms of environment and resources management and social development at the regional level. The project objective was to develop decision-support tools for decision makers at regional level to assess the impacts of agricultural policy change on the livestock farming viability and the sustainable social and environmental development.

A regional dairy model based on a mathematical programming model has been developed as a 'whole farm' model with sub-regional heterogeneity built in. The heterogeneity specifically relates to the fodder-types, fodder productivity, fertiliser applications, number of farms, farm labour and land pressure. The objective of the model was to explore the objectives of the regional level decision makers with reference to the sustainability of the dairy sector in terms of economic, environmental and social variables.

The first simulations aimed to answer the objectives of the dairy cooperative to achieve the milk production quota for the island while adhering to the environmental regulations that are in place and with a view to achieve the minimum revenue for the farms. If the improvements in genetic potential (for higher milk yields) could be a partial solution, increases in number of milk cows seems inevitable to reach the 40 million-milk production objective. Referring to the N part of the model, the sustainability of dairy farms will depend increasingly not only on profitable milk production but also on farmers' ability to comply with nutrient management regulations (Powell, 2003). Therefore, the idea is to use the results of the model in terms of N calculations to discuss N management options.

The results of simulation show that an increase of 20 % of manuring area allows to reduce by 20 % the N in kg/ha. To assess the importance of the dairy chain on la Réunion, a 'Social accounting matrix' (SAM) has been also developed. A SAM is generally used to model country-wide economies. Here, the SAM methodology is applied to the dairy sector. This micro-SAM aimed at providing an overview of the dairy sector and its links to other sectors in the economy, to quantify the demand and supply flows between the dairy sector and related sectors and to estimate multiplier effects. The construction of a SAM with a disaggregated dairy sector is useful to analyse the multiplier effects of changes in demand of local dairy products and government support.

The results suggest that increased demand of local dairy products may mainly benefit the transformation industry and to a lesser extend the farmers. Furthermore, a removal of subsidies paid to farmers, the cooperative and the transforming industry can have a significant direct and indirect impact. Even if the removal of the support would be entirely compensated by increased demand for local dairy products, the net effect is estimated to be negative for dairy chain.

An efficiency analysis using the data envelopment analysis approach to data of dairy farmers showed two main points:
(a) the average technical efficiency was better than average sub-vector efficiency of the use of land; and
(b) efficient farms seemed to be larger in terms of herd size, operational costs and milk production.

Challenging for a small island with limited available land, increasing scale efficiency especially of land seems to be particularly important. Farms could search to rent land that is currently used for other crops or livestock activities, or they could merge. Alternatively, investments in farm infrastructure in order to reduce the dependency on land for forage production and manure disposal could contribute to increase in production efficiency. Some approaches developed in the project have been tested in other harsh environments, such as the dairy development sector in Vietnamese mountains.

Reported by

TA 30/B, Campus International de Baillarguet