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Generation and distribution of productivity gains in beef cattle farming: Who are the winners and losers between 1980 and 2015?

Published online by Cambridge University Press:  15 October 2018

P. Veysset ,
M. Lherm ,
J. P. Boussemart  and
P. Natier
P. Veysset*
Affiliation:
Université Clermont Auvergne, INRA, VetAgro Sup, UMR Herbivores, F-63122 Saint-Genès-Champanelle, France
M. Lherm
Affiliation:
Université Clermont Auvergne, INRA, VetAgro Sup, UMR Herbivores, F-63122 Saint-Genès-Champanelle, France
J. P. Boussemart
Affiliation:
Université Lille, CNRS, IESEG School of Management, UMR 9221-LEM, F-59000 Lille, France
P. Natier
Affiliation:
Université Lille, CNRS, IESEG School of Management, UMR 9221-LEM, F-59000 Lille, France
*
†E-mail: [email protected]
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Abstract

Surplus accounting is a method for evaluating trends in how a firm’s productivity factors (intermediate inputs, capital, land, labour) are performing and how the productivity gains are redistributed between agents in the economy. Here the surplus accounting method was applied on a database of 164 Charolais-area suckler cattle farms running from 1980 to 2015. Over this 36-year period – with differences per sub-period – the cumulative productivity surplus (PS) increased at a low rate of +0.17%/year (i.e. cumulative volume of outputs produced increased slightly more than cumulative volume of inputs used). This timid increase in PS is linked to the constant expansion in labour productivity whereas other factor productivities have shrunk. The observable period-wide macrotrends are that commercial farm businesses struggle to protect their revenues, we also observe a slight fall in input prices, land rent and financing costs, and a huge climb in direct support-policy payments. The bulk of the cumulative economic surplus has been captured downstream – 64% downstream of the cattle value chain as a drop in prices, and 22% downstream of other value chains (chiefly cereals). It emerges that the productivity gains in beef cattle farming mostly benefit the downstream value chain (packers–processors, distributors and consumers), whereas it is mainly government money backing this drop in prices of agricultural output. Here we see the principal of the 1992 ‘MacSharry’ reform at work, with a transfer from the taxpayer through direct support-policy payments through to the consumer via lower prices. The simple fact that farmers’ incomes are stagnating is a clear indication that they are net losers in this distribution of productivity gains, despite the improvement in labour factor productivity.

Keywords

efficiencyfarm economicslivestock farmsbeef sectorsurplus account
Type
Research Article
Information
animal , Volume 13 , Issue 5 , May 2019 , pp. 1063 - 1073
Copyright
© The Animal Consortium 2018 

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