The Spanish beef sector in the 1990s: impact of the BSE crisis on efficiency and profitability

Abstract

The beef sector has undergone a series of changes as a result of successive food scares and agricultural policy reforms. The purpose of the paper is to analyse technical efficiency and profitability in Spanish livestock enterprises during the 1990s, focusing on the possible impact of the BSE crisis and the 1992 CAP reform on each of these variables. The main findings reveal the existence of technical inefficiency during the sample period. Some factors have a positive impact, others a negative impact, on efficiency. As far as the effects of CAP reform and the BSE crisis are concerned, the results show the ineffectiveness of agricultural policy regulation to promote efficiency in the sector and the improvement in the efficiency as a consequence of the BSE crisis. The profitability analysis reveals the importance of direct subsidies, however. In their absence, a large percentage of holdings is unable to remunerate either own or rented factors. Analysis shows, therefore, that there are two counteracting effects from subsidies. On the one hand, they form a major part of the resources of livestock farmers, allowing them to meet input costs and preventing land abandonment. On the other hand, they have a significant negative impact on the level of technical efficiency estimated.

Price transmission in the Spanish bovine sector: the BSE effect

“…Most of this literature has focused on the effects of food outbreaks on the demand for food (see, for example, Smith et al, 1988;Burton and Young, 1996;Mazzocchi, 2006;Piggott and Marsh, 2004). A few have tried to assess whether the BSE crisis altered the efficiency with which the sector operates (Iraizoz et al, 2005). However, the analyses of the effects of the BSE crisis on vertical price transmission are very scarce.…”

Assessment of technical efficiency and its determinants in beef cattle production in Kenya

“…The finding on specialisation seems to contradict the suggestion by Rakipova et al (2003) that farmers who depend heavily on cattle production for their livelihoods might be more efficient. However, this result supports Featherstone et al (1997), Hadley (2006), Hallam and Machado (1996) and Iraizoz et al (2005), that specialised farmers are relatively less efficient due to lack of flexibility to adapt to changes in market and policy environments.…”

“…Moreover, investigating factors that influence TE offers important insights on key variables that might be worthy of consideration in policy-making, in order to ensure optimal resource utilisation. There is extensive literature on TE of crops, dairy and mixed crop-livestock farms, but that on beef cattle enterprises is limited (Barnes, 2008;Ceyhan and Hazneci, 2010;Featherstone et al, 1997;Hadley, 2006;Iraizoz et al, 2005;Rakipova et al, 2003 are exceptions). In Kenya, 70% of all households are engaged in crop and livestock farming; about 84% of them depend on livestock for livelihoods in rural areas (KIPPRA, 2009).…”

Spread and Control of Prion Diseases in the Food and Feed Chains

“…[23,24] BSE has had a huge impact on the beef industry worldwide. [25][26][27][28][29][30] In the USA, estimates of the total loss of beef and offal exports ranged from $3.2 billion to $4.7 billion in 2004 after the nation's first BSE case was confirmed at the end of 2003. [31] Although the link between BSE and vCJD through eating prion-contaminated meat has not been conclusively proven, the consumption of food of bovine origin contaminated with PrP Sc has been strongly linked to the occurrence of vCJD in humans.…”