Short-term Marginal Costs in French Agriculture

The paper investigates short-term marginal costs in French agriculture for field cropping, beef cattle, and dairy farms during the period 1995-2006. The multi-input multi-output Symmetric Generalised MacFadden cost function is used, with three variable inputs (crop-specific, animal-specific, energy costs), four outputs and three quasi-fixed inputs. Results indicate that marginal costs are on average lower for crop farms than for livestock samples. However, for crop farms, Common Agricultural Policy crop direct payments are related to high production costs, while livestock direct payments have no relation to production costs for dairy farms.