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Nexus of non-farm enterprises and rural households’ livelihood: evidence from Nigeria
Views:96Agricultural sector in Nigeria is faced with diverse challenges that threaten the survival of rural households who constitute a significant proportion of the country’s population, thereby forcing them to diversify into alternative occupations outside farming. This study assessed the contributions of non-farm enterprises to livelihood of rural households in Osun State, Nigeria. The quantitative data were elicited from120 rural households’ heads across the state. The data collected analysis appropriate statistics. Results revealed that majority of rural households were involved in multiple non-farm enterprises and provide full-time employment for majority. Many were favourably disposed to contribution of non-farm enterprises to their households’ livelihood. Majority indicated that non-farm enterprises contributed moderately to their households’ livelihood. Income from non-farm enterprises, association membership and age were significantly correlated with the contribution of non-farm enterprises to rural households’ livelihood. It was concluded that non-farm enterprises play significant roles in sustaining the livelihood of rural households in the study area
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Less favoured area measure in the Netherlands: a welcome or negligible addition?
23-28Views:161The Less Favoured Areas (LFAs) Directive (75/268) which was introduced in 1975, was the first common European instrument of regional agricultural structural policy. LFAs are areas where agriculture is hampered by permanent natural handicaps. The major objectives were to ensure the continuation of farming, thereby maintaining a minimum population level and preserving scenic landscapes and environmentally valuable habitats. In the Netherlands, the LFA measure is used as an additional payment, to compensate farmers for negative economic effects due to the conservation of these natural handicaps. It was not implemented as a stand alone policy, but is linked to measures aiming at active nature and landscape conservation management. In this paper, the effects will be examined of the regulations aiming at the conservation of natural handicaps on farm businesses within LFAs, when comparing them to farm businesses outside LFAs, where these regulations and handicaps do not exist. The main data source that was used is the Farm Accountancy Data Network. Reference groups of farms were compiled with the use of the simple and multiple imputation approach in Stars (Statistics for Regional Studies). Both analyses were tested with the use of a parametric and a nonparametric test. When comparing the results of both analyses, it can be concluded that there is no evidence that there is a statistical difference in family farm income corrected for and not corrected for LFA payment between the LFA farm businesses and the reference groups. Based on these findings it can be concluded that the size of the compensatory allowances is small and there is no evidence that it has a significant effect on the family farm income of LFA farm businesses. The main purpose of the Dutch LFA policy is to compensate farm businesses for negative economic effects due to the conservation of natural handicaps. Although this may be true for some individual farms, based on the methods used in this paper, it appears not to be the case for the collectivity of LFA premium beneficiaries as a whole.
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Investment analysis of a piglet producer farm – a Hungarian case study
141-152Views:235The pig population in Hungary was about 8 million in 1990, while this number dropped to only 2.8 million by 2018. The previously so successful integrated domestic pig farming has almost completely disappeared and most of the smaller farms still operating in the 1990s are no longer functioning. At present, a process of concentration can be observed, which was accompanied by the further specialization of pig farming. The main profile of most pig farms is fattening, but there is a smaller number of farms in Hungary today specialized for piglet production, the successful operation of which requires significantly more expertise and more complex technology.
The main aim of this study is to present the production and economic indicators of a pig farm specialized in piglet production in Hungary as a result of a greenfield investment in the current economic environment, on a case study basis. For this purpose, an economic simulation was prepared based on primary data collection, operating on a deterministic basis, modelling the production and economic processes of the farm. The performed calculation does not derive the economic indicators of the activity from accounting records, but assigns the prices of natural inputs used on the basis of technological data. Primary data and information collection (e.g. technological data, input and output prices, unit cost items, etc.) took place between 2018-2019.
At the purchase prices of pigs in the last two years, which have increased significantly due to the African Swine Fever (ASF), the majority of pig farms in Hungary have an outstanding profit-making capacity. The physical efficiency indicators of the analysed pig farm are almost identical to the average data of such farms in the Netherlands, which has one of the most developed pig industry. The income of the examined pig farm at farm level is about 734 thousand EUR, i.e. 232 EUR per sow. Moreover, this activity is profitable even without subsidies. As a result, the greenfield investment pays off in the 8th year by default (average scenario). The investment has a Net Present Value (NPVr=3%) of EUR 2,609 thousand for 10 years, an Internal Rate of Return of 8.5%, and a Profitability Index (PIr=3%) of 1.3. At the same time, risk factors such as sales prices, output and capacity utilization, and feed costs should be taken into consideration as in extreme cases the return on investment may be unfavourable (pessimistic scenario).
JEL code: D24, M11, Q12
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Urban Food Crop Farming and Farm Households’ Food Security Status in Oyo State, Nigeria
23-28Views:158Food production and supply has been on the decline in Nigeria with a consequent impact on household food security. This study examined the influence of urban farming on household food security in Oyo State, Nigeria. Multi-stage sampling procedure was used to select 159 farm households in a cross-sectional survey. Structured questionnaire was used to obtain data on socio-economic characteristics, determine the food security status of urban crop farming households in the study area, and examine the effects of urban crop production on households’ food security status. Data were analysed using descriptive statistics while the statistical tools were Food Security Index (FSI) and Probit Regression Model (PRM). Results revealed that 84.9% of the respondents was male, 81.2% married. The average age, household size, and farm size were 49.6 years, 6 persons, 1.1 hectares respectively. Most (75.5%) of the respondents did not have access to consumption credit and 62.3% did not belong to any farmers association. Based on minimum daily energy requirement per adult equivalent of N230.8, 90.6% of the farm households was food secure.
The PRM showed that age (β = -0.1, p<0.05), household size (β= -0.4, p<0.01) and economic efficiency (β = -61.6, p<0.05) reduced the probability of household food security while access to consumption credit (β= 1.7, p<0.05) and allocative efficiency (β = 67.9, p<0.05) increased the probability of household food security. The study concluded that urban farming significantly influence household food security.
JEL Classification: Q11
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Interior point algorithm for solving farm resource allocation problem
45-49Views:169This paper introduces interior point algorithm as an alternative approach to simplex algorithm for solving farm resource allocation problem. The empirical result of interior point algorithm is compared with that of the simplex algorithm. It goes further to address a profit maximization problem. The result revealed several relevant patterns. Results of the interior point algorithm is similar to that of the simplex algorithm. Findings indicated that in both algorithms, the farm is to produce peppers, wheat which is irrigated and weeded manually, hire additional month of labour, and also purchase urea and muriate fertilizer to realize a similar amount of profit. Additionally, both algorithms suggested that practicing crop rotation where beans, if grown, should be altered with wheat cannot be possible since no beans will be grown. The Simplex algorithm saves 39 iterations over Interior Point algorithm in solving the farm resource allocation problem. The findings demonstrate that the interior point algorithm offers a useful alternative to the simplex algorithm when addressing farm resource allocation problem.
JEL code: D24, D57, C61, C63, C67
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Diversification strategies and their impact on farm performance
57-61Views:127The objective of this study is to identify factors determining the economic performance of agricultural holdings in Italy, with specific attention to the impact of the adoption of on-farm diversification strategies, namely income diversification and product differentiation. The adoption of these kinds of strategies has been increasingly recognised as a viable business option in agriculture as they allow better allocation of farm resources and an increase in the quota of value added retained on farms and therefore not passed on to other agents operating at the end of the food supply chain. By using a panel of professional Italian farms over the time period of 2003-2009, we estimate random effect, ordinary least square and quantile regression models to estimate the impact of income diversification and product differentiation strategies on the levels of farm income per unit of labour income. Our findings show that scale economies are important positive determinants of farm economic performance. On the contrary, when the family play an important role in the farm business, economic performance is worse. Finally, we do not find evidence of a statistically significant impact of the adoption of income diversification and product differentiation strategies. This latter result may be interpreted as a signal that farms use these strategies as risk management tools rather than as income increasing ones.
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Economic results of Croatian farms
53-58Views:106The objective of the paper is to provide an overview of the situation and performance of Croatian farms. Croatian farmers rarely keep business books and therefore farm level business data are deficient. Croatian accession to the European Union in 2013 brought numerous innovations to agricultural sector. One is introduction of Farm Accountancy Data Network (FADN) which aims to determine the impact of the Common Agricultural Policy on national agriculture of EU member states. The sample of Croatian FADN comprises 1,250 commercial farms. The paper brings results of agricultural sector financial analysis for the period 2011-2013. Total farm output decreased, but since the stronger decrease trend occurred in total inputs, this led to positive trend of gross and net farm income in the year 2013. Positive results are also shown at efficiency and productivity of Croatian farms. In the years 2011 and 2012 farms operated below the efficiency level while in 2013 efficiency increased above the efficiency level. In the observed period there was a 70% increase in productivity. The analysis shows that the most efficient farms are those in vegetables and flowers type. It also has the highest debt ratio due to their capital intensiveness. The vegetable and floriculture farms have the largest gross farm income in all three analysed years, but with a large drop in 2013, while the farms in type pigs and poultry have largest increase of gross farm income in last observed year.
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The influence of employment modes on employee turnover and agri-business performance: a case for Hunyani farm in the Zvimba district, Zimbabwe
17-27Views:285The labour intensive nature of Zimbabwean agriculture demands that farmers meet excessive labour requirements, at the same time keeping labour costs as low as possible to guarantee profits and achieve maximum business performance. This study, carried through a questionnaire survey, at the Hunyani Matura Farm, in the Zvimba district of Zimbabwe between from October 2017 to March 2018, investigated the effect of employment mode on turnover and agri-business performance. Data collected from the participants, was compared with the information from secondary source documents. From the results temporary workers performed better than permanent workers and they cited problems of low wages, poor working conditions, high work targets, inequality in work allocation, job insecurity and constant shuffling. Temporary workers had higher turnover and turnover intentions than permanent workers. Temporary employment mode had a positive
effect on agri-business performance. This study recommends the use of permanent employment mode on key positions like forepersons, stores persons and supervisors, and temporary employment mode on general farm tasks, while seasonal contracts were seen good for skill demanding operations such as tobacco seedbed establishment, tobacco reaping and curing and grading. A ccareful selection of employment modes reduces inequalities and unhealthy attitudes at work and improves on farm business performance.JEL Classification: Q12
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Modeling multifunctionality of agriculture at a farm-level: The case of kerkini district, Northern Greece
59-64Views:115Multifuncionality has become a central concern at both conceptual and empirical levels. In this study, a comparative evaluation of the economic performance of conventional and multifunctional farms (mainly organic farms) was conducted for the Lake Kerkini region (North Greece) with the use of mixed integer non-linear programming method. The economic performance of farms was evaluated in terms of farm income, resource allocation, production level and production mix. The results indicate that multifunctional farms have overall better economic performance and young farm managers are keener to adopt multifunctional farming than the older ones. Differences between the model results and the observed facts are attributed to the structural characteristics of the farms, along with the CAP measures and the existence of multiple objectives, beyond maximization of net farm returns.
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Economic aspects of an agricultural innovation – precision crop production
51-57Views:190Innovation in agriculture ensures the wide-spread use of the latest, up-to-date technology. Such new technology is precision farming in crop production, which serves as a validation of the criteria of environmental and economic sustainability. The economic applicability of precision crop production depends on several factors.Among them the following aspects must be emphasized: the size of the farm, the characteristics of the production structure, the current input-output prices and their tendencies, the investment needed for transitioning to precision technology and its capital source, the level of professional knowledge and the managerial attitudes of the farm. I have examined the economic relations between potential savings in chemicals on EU level. It has been found that after switching to precision farming, the active ingredient use for fertilizers can be reduced by 340 thousand tons at the same expected yield level in an optimistic scenario in the EU-27, while the savings in pesticide use can be 30 thousand tons (calculating with the current dose-level). If approximately 30% of the crop producing and mixed farms over 16 ESU adopt this new technology, this will diminish environmental loads by up to 10-35%. The majority of farms characterized by greater output and size can be based on their own equipment but it might as well be presumed that smaller farms can turn to precision farming not based on their own investment. They can buy the technical service from providers, they can establish producer cooperation, for example in the frame of machinery rings. At a certain farm size and farming intensity precision crop production is a real, environmentally friendly farming strategy, with the help of which the farm can reach earnings that cover at least the economic conditions of simple reproduction.
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Effect of Training on Small-Scale Rice Production in Northern Ghana
13-20Views:138Training in modern farming methods enables farm households in developing countries to improve agricultural productivity. Notwithstanding the efforts of governmental and non-governmental organisations to provide farmers with agricultural training, productivity remains low. The existing literature provides little empirical evidence of the effect of training on agricultural productivity in Ghana. This study therefore seeks to bridge this gap by investigating small scale rice farmers’ participation in agricultural training programmes and its effect on productivity in northern Ghana. A treatment effect model was used to account for sample selection bias. The results indicated that participation in training increased with the number of extension visits, group membership, access to credit and the degree of specialisation in rice production. Furthermore, total output and labour productivity both increased with participation in training but the relationship with land productivity (yield) was insignificant. On average, participation in training was associated with 797kg increase in rice output, while labour productivity increased by 7.3kg/man-day. With the exception of farm capital, all the production inputs had a positively significant relationship with output suggesting sub-optimal use of capital in production. The study concludes that farmers’ training needs are not adequately being met while inadequate capital is constraining farm output. Increasing access to extension service and involving farmer-based organisations in the design and implementation of training programmes will enhance participation and farm performance.
JEL Classification: C21, D24, Q12
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Climate change impact on crop production in Central Asian Countries
75-82Views:165Increased risk due to global warming has already become embedded in agricultural decision making in Central Asia and uncertainties are projected to increase even further. Agro-ecology and economies of Central Asia are heterogeneous and very little is known about the impact of climate change at the subnational levels. The bio-economic farm model is used for ex-ante assessment of climate change impacts at sub-national levels in Central Asia. The bio-economic farm model is calibrated to ten farming systems in Central Asia based on the household survey and crop growth experiment data. The production uncertainties and the adaptation options of agricultural producers to changing environments are considered paramount in the simulations. Very large differences in climate change impacts across the studied farming systems are found. The positive income gains in large-scale commercial farms in the northern regions of Kazakhstan and negative impact in small-scale farms in arid zones of Tajikistan are likely to happen. Producers in Kyrgyzstan may expect higher revenues but also higher income volatilities in the future. Agricultural producers in Uzbekistan may benefit in the near future but may lose their income in the distant future. The negative impacts could be further aggravated in arid zones of Central Asia if irrigation water availability decline due to climate change and water demand increase in upstream regions. The scenario simulations show that market liberalization and improved commodity exchange between the countries have very good potential to cope with the negative consequences of climate change.
JEL classification: Q11, Q18
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Hungarian dairy and beef production sector technical efficiency comparsion using DEA
131-138Views:183To examine and compare the technical efficiency of dairy sector and the beef sector, this research introduced the main indicators of milk and beef production in the world, EU and Hungarian aggregates. Based on the data it can be said that the milk and beef production of Hungary does not occupy any significant position in the world as well as in the European Union neither today nor even in the past. If Hungry must compete in the European counties and international market, their dairy sector must focus to increase of their production efficiency as the key breakthrough point. This paper we compared technical efficiency of both dairy and beef sectors in total, for the year 2014 and 2015 separately and based on the farm size. The specific objectives of the research are: comparing dairy and beef farms efficiency in Hungary. Based on the results, we can determine which sector in Hungary is more effective. The second objective is to compare the efficiencies of both the sectors in 2014 and 2015 separately and from the results we can determine which year was more effective in terms of production efficiency and the third objective of the research is technical efficiency comparison of certain economic sizes for both sectors. In the research, we used (KOVACS, 2009) deterministic (DEA) model adapted to the Hungarian dairy farms and beef farms. For the dairy farms milk and dairy products as well as meat (other income). The input factors originated from the domestic AKI - FADN database. Summarizing the results of the research it can be conclude that the dairy sector is more effective than the beef sector in Hungary. In terms of years compared 2014 was more effective for both sector as compared with 2015. In regards to the farm size almost the same result in evaluating the scale of efficiency, which means that large economies can in most cases, manage resources more efficiently than small farms. In the examined years, based on the results of the DEA model, the VRS technical efficiency of the test for these two years was 72.90% for the dairy farms and 63.60% for the beef farms, which means that the dairy sector is more efficient than the beef sector in Hungary. The VRS technical efficiency of the research was 82.10% in 2014 and 75.10% in 2015 for the dairy farms and 77.50% in 2014 and 68.90% in 2015 for the beef farms, which means that both the dairy sector and the beef sectors followed the same trend and were more efficient in 2014 compared to the efficiency in 2015. The large size dairy farms were most effective in Hungary in the examined period (90.90%). VRS technical efficiency for small farms is 88% and the total number of small, the technical efficiency medium farms was 72.80% For the beef sector VRS technical efficiency for small farms is 71.30% and the technical efficiency medium farms was 74.40% and 70% of the beef meat producing farms in Hungary are medium sized. So, the conclusion is the small size dairy farms have a higher VRS efficiency than the small size beef farms whereas medium sized beef farms had higher VRS efficiency than the medium size dairy farms. As a conclusion, both dairy and beef sectors in Hungary have the potential to overcome technology and knowledge constraints and attain the upmost attainable productivity level through improvements in; farmer volume of production i.e. output, beef cattle technologies, and advertising, and the efficiency of the technology transfer process.
JEL Code: Q13
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The choice between conventional and organic farming. A Hungarian example
55-58Views:123The paper deals with organic produce in one of the largest and, concerning organic production one of the most diffused counties in Hungary, Pest County located in the north-central part of the country. Factors influencing farmers’decision on adopting or not e.g. farm size, farm type, location, structure, market for organic products, existence of organic AEM were analysed. Hypotheses based on previous empirical literature were tested by a model explicitly accounting for the effects of farm-specific variables like age, education, size of farms and share of rented land. Logit model was estimated on a cross-section data set of Hungarian farmers for the period 2007. It appears that education has a positive impact on the choice between conventional and organic farming, and, the size of the farm in hectares has a negative effect on this choice.Age and some general considerations on environmental friendly technologies do not have a significant effect on choice between conventional and organic farming.
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THE PROFIT EFFICIENCY OF MORINGA OLEIFERA PRODUCTION IN OSUN STATE, NIGERIA
Views:64This study examined the profit efficiency of Moringa oleifera production by farmers in Osun State, Nigeria. Primary data were obtained from 150 respondents. Multistage sampling procedure was used for selecting respondents. The data were analyzed with the aid of descriptive statistics, budgetary analysis and stochastic frontier production function. The findings revealed that male predominate moringa enterprise with about 55.3% male, most producers fall between the age bracket 41-50years with a mean age of 44.92 (± 13.168) years and the average farm size is 0.3 hectares whilst indicating that most producers had less than 0.1 hectares of land. Moringa production had a benefit cost ratio of ₦5.852, profit margin of ₦0.182, expense structure ratio of ₦0.107, net return on investment ₦4.857, rate of return of ₦5.482 and profitability ratio of ₦0.981. The average profit efficiency of moringa producers was 18.73% on the profit frontier. Family labour, hired labour and transport cost were significant and had positive coefficient while the seed cost, pesticide cost, level of education and farm size are also significant but bears negative coefficient. The level of education and farm size are amongst the inefficiency variables considered. This study concludes that Moringa oleifera production is highly profitable but producers have not been able to maximize profit efficiency. It therefore recommends that producers improve on adding value to moringa products and extend their channels of distribution considering the cost incurred on transportation.
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OPERATING RESULTS OF SILAGE ENTERPRISE OF A FARM - A CASE STUDY
Views:72Improvements in agriculture has been focusing on innovations to improve the efficiency of the activity by making the traditional production structure currently in use more flexible and by making the necessary technological changes for farmers with large areas and the necessary machinery and equipment. Farms with significant arable land are able to offset the effects of changes affecting efficiency and profitability. The decisive sector of agriculture in Hungary is crop production, therefore its performance is largely determined by the annual output of the crop sector and the volatility in prices. From the farm data, we calculated farm-level results that support the need for machinery modernisation efforts, as precision tools and improvements already started in maize production can be applied fruitfully even in the light of the increasing frequency of negative climatic effects. During the development of silage maize cultivation technology, the achievements of precision farming were applied. Differentiated nutrient replenishment and sowing operations were used, in addition to the fact that harvesting was also documented. We set ourselves the goal of analyzing the management data of the study period between 2019-2022 in order to reveal the nature of the changes that occurred in terms of production value, production cost, and income, as well as the components that shape them. The presented values are average values of such conditions which are also suitable for crop-level conclusions. At the same time, they can be used to identify sector-level challenges and trends.
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An Agro-Food Waste Commercial Utilisation Behaviour Lens among Urban Agro-producer Households in a Developing Economy
Views:136Small-urban farm businesses utilise agro-food waste emanating from own production and other levels of food supply chain activities to supplement conventional inputs. Out of these, the food produce surplus from agro-producer households is offloaded to the urban market. As such, the aim of the study was to assess the determinants of agro-food waste commercial utilisation behaviour among urban agro-producer households. An electronically-designed research tool was administered to 456 agro-producer households to collect self-reported estimates of their agro-food waste utilisation behaviour. Results indicated higher budget share towards conventional inputs (0.73) compared to agro-food waste (0.27) but the observed suboptimal production intensification could be rectified with increased use of agro-food waste. Structural equation modelling results indicated that attitude, environmental awareness and concern, motivation and perceived moral obligation had positive significant influence on commercial utilisation intention. The adopted constructs for the model could explain 79.1% of the commercial utilisation behaviour variance. Furthermore, commercial utilisation intention, risk perceptions and perceived behavioural control had significant influence on the commercial utilisation behaviour. Findings are an indicator that agro-food waste commercial utilisation intentions among small-urban farm businesses would likely transition to commercial utilisation behaviour. Since behaviour can be learnt and developed, aspects that contribute to commercial utilisation intentions and behaviour would need to be stimulated. As a strategy of reducing the collectible waste, urban authorities may introduce tailor-made programs meant to stimulate commercial utilisation intention and behaviour in small-urban farm businesses. In valuation of agro-food waste, methodologies that could factor in utility would provide more precise insights in its commercial utilisation.
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Produce certification and income risk management strategies of cocoa farming households in South-West Nigeria
75-79Views:157Agricultural produce certification is synonymous to farm assurance of which cocoa certification is an example; dealing with issues of Good Agricultural, Environmental and Social Practices (GAP, GEP and GSP) in cocoa production. Essentially, GAP, GEP and GSP packages had in-built mechanism that can aid farmers mitigate factors that could lead to farm income risks in cocoa production. Consequently, this study examined the influence of cocoa certification on income risks of cocoa farming households in South-west Nigeria. A multistage sampling technique was used to select 180 cocoa farming households from whose heads data were obtained with interview schedule in Southwest Nigeria. Data were analyzed with Chi-square Statistic, Income Risk Management Diversification Index (IRD) and Mann-Whitney-U Test Statistic. Chi-square analysis shows that (52.3%) certified cocoa farming households employed more risk management strategies than (94.2%) uncertified cocoa farming households (p<0.01). The Mann-Whitney-U test revealed a significant difference (p>0.05) between the income risk management practices of certified and uncertified cocoa farming households. Therefore, produce certification has been helping cocoa farming households in mitigating farm income risk in cocoa production through the employment of diverse (risk) management strategies. Hence, stakeholders should intensify efforts in encouraging farming households to embrace (cocoa) produce certification.
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Subsidies are Potential Sources of Profitable Management – Their Payment Between 2010 and 2016
97-120Views:167Based on the allocations and distributions of subsidies in the sheep sector in the previous years (2004-2009), the authors examined the sum of aids claimed and paid from 2010 to 2016 and their farm-size related changes. The following data were collected from the Agricultural and Rural Development Institute on payments under specific subsidy titles, classified by sheep and goat farm sizes: 0-50; 51-100, 101-200, 201-300 and also 0-100, 101-300, 301-500, 501-1000, 1001-5000 and above 5000. Data procession was carried out by the SPSS for Windows 22 program. The size and population of the examined sheep sector underwent visible changes during the studied years leading to a reduction rather than growth. Their analysis highlights that size distribution of sheep farms has changed significantly in recent years, combined with simultaneous modifications of their sheep stock sizes in production. Their conclusions suggest that effects of years and farm sizes in the sheep and goat sector have considerably modified the aid sums paid under different titles.
JEL Classification: H5, Q14
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The impact of the “greening” of the common agricultural policy on the financial situation of Polish farms
49-55Views:286This paper presents an assessment of the impacts of introducing the greening scenario of the CAP, proposed by the European Commission as an alternative for the reformed CAP after 2013. In the past, the CAP has undergone numerous transformations in response to the changing macroeconomic environment and in reaction to developments in the farming sectors in EU countries. On the 12th of October 2011, the Commission presented a set of legal proposals designed to make the CAP a more effective policy to encourage more competitive and sustainable agriculture and vibrant rural areas. The proposal brings various new elements under consideration, some of them raising strong controversies such as introducing “greening” as a component of direct payments. Changes in the direct payments scheme in line with the EC proposition include forcing adjustments in the cropping pattern and creating ecological focus areas (EFA) on 7% of the farm land ; the consequences of such a proposal on the size and structure of agricultural production, and thus on the economic performance of farms and the whole agricultural sector are uncertain. The authors analyse historical changes to the CAP with a focus on a growing importance of the environmental component of the CAP, discuss different scenarios of shaping the direct payments system and present the results of modelling the impacts of greening the CAP on the Polish farming sector with the use of the LP optimisation model. The study was based on Polish FADN data. Results show that the majority of farmers in Poland comply with the crop diversification constraint of greening. However, establishing the required EFAs and necessary diversification on farms with simplified cropping structures will have a negative impact on the volume of agricultural production as well as on farm incomes.
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Sheep production in Hungary – is it a sustainable sector?
95-100Views:138The question of sustainability of agricultural production especially animal production and events leading to its development can be dated back to the second part of the last century. Sustainability is a priority subject matter as it is a core element in our existence and in the survival of the forthcoming generations. The notion of sustainability comprises three aspects: ecological, social and political and economic target systems, which by now have been supplemented with cultural and regional elements including the protection of environment, local traditions, scale of values, cultural and historical heritage. The principles of sustainable development also include the improvement of human and animal health and the maintenance of vital rural communities. The priority notion of sustainability of agricultural production refers also to animal husbandry and especially sheep production. Sheep have contributed substantially to the grassland-based agricultural production in Hungary for centuries. Sheep sector is important in rural areas as the tool of sustainability of animal production. It should also be highlighted that contrary to numerous efforts, the globally difficult process of sustainable development poses almost unsolvable problems for implementers even on local and regional levels. This paper will review briefly the levels of sustainability in the Hungarian animal production with a special regard to sheep production and their content and then points out the most significant economic issues by the application of “SWOT” – analysis, “problem tree’and “structure of objectives” methods, on the grounds of the received findings.
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The role of agribusiness in stimulating on-farm investments – case-study of the armenian dairy sector
85-91Views:120This paper analyses the impact on investments of contractual arrangements between farms and agribusiness in the Armenian dairy sector. Our empirical evidence is based on a unique survey of 300 Armenian dairy farms. The dairy sector is of particular importance as it provides vital employment and income, in an environment of weak social security and scarce job opportunities. Furthermore, milk production is predominantly organized in small-scale farms, which are most likely to be affected by adversarial financial conditions and limited in their opportunities to raise resources to invest. The results show that a large share of milk producers in Armenia is actively investing to upgrade their farm business. Furthermore, investment activity is not limited to large dairy farmers as over 30% of respondents with less than eight cows have made dairy-specific investments. We find that the linkages between farms and agribusiness – and more specifically the support programs that agribusiness firms offer to their suppliers – have been crucial in stimulating this restructuring process at the farm level. Interestingly, farmers with a more exclusive relationship to the buyer and farmers that deliver to more internationally oriented buyers are more likely to receive support. On the other hand, buyers that operate in a more competitive market are less likely to provide support to their suppliers. These findings have interesting policy implications. On the one hand, our results point to the gains that can be made from openness to international firms. On the other hand, the negative competition effect indicates that buyers are unable to enforce repayment of the provided farm services in an environment where a lot of buyers are competing for the same supply. Policy makers should look at ways of improving the enforcement capability of dairy companies under these circumstances.
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The influence of direct support under common agricultural policy on farm incomes in Poland
33-37Views:141The main objective of the paper is the analysis of changes on the level of income of agricultural producers, which took place in Poland in the early years of the accession to the EU, as well as a determination of the scale of the impact of financial support under the Common Agricultural Policy on the farm income situation. Poland’s membership in the EU gives rural farms opportunities to improve their economic situation. Financial aid, mainly in the form of a direct payment, has been the main factor determining the economical status of rural farms, whilst the other income making factors, such as improved productivity and increased agricultural production have played a much smaller role. The increase in revenue has enabled farmers not only to increase current expenditures, but also to carry out modernization efforts, which will determine the future economic and structural situation of the Polish agricultural sector and its competitiveness. However, a strong differentiation in terms of the economic situation of rural farms according to their size and specialization in production was also noticed. As a result, there is a still large number of farms in which the revenues received by farmers are insufficient to assure them adequate life standard. Therefore such farms are not able to both develop and invest. Only economically strong rural farms with high production potential have such opportunities, meaning that EU support will never be able to fully minimize the effects of small-scale production or to offset the insufficient efficiency and productivity of production factors.
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Farm-retail price transmission in Malaysian pork sector
87-92Views:154This study intends to determine the farm-retail price transmission behaviors of pork in Malaysia to serve as a good implication for pork pricing system in Malaysia. Using monthly data from January 1997 to December 2008, markup pricing model, Houck, and ECM approaches were estimated. While many previous studies found that farm-retail price transmission is asymmetric, this study encountered different result where the findings in both the Houck and ECM approaches suggested that the Malaysian pork farm-retail price transmission is symmetric. A change in farm price of pork is likely to have similar direction in change of retail price of pork in Malaysia. The pricing system of pork can therefore be further described by the estimated price transmission elasticities (that derived from the symmetric mark-up pricing model) where retail price is very sensitive to the changes in farm price. A change in farm price is expected to result in a bigger change in retail price of pork while other things remain unchanged.
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Trajectories of agricultural modernization and rural resilience: some first insights derived from case studies in 14 countries
31-43Views:193In this paper, alternative trajectories of agricultural modernization and rural resilience are explored based on case studies in 14 countries. The analysis is to support discussions about the further development of agriculture at a time when the agricultural sector must respond to an increasing scarcity of natural resources, challenges like climate change, urbanization, demographic change, food security, consumer demands, distributional issues in food value chains and changing urban-rural relations. The discussion relates different trajectories of agricultural modernization to the multiple mechanisms underlying rural prosperity and resilience. The mainstream capital-intensive and technology-driven model of agricultural modernization is contrasted with more incremental, socially embedded and localised forms of development. Potential synergies between different modes of farm ‘modernization’, resilience and sustainable rural development are highlighted and a different future-oriented understanding of the term ‘modernization’ explored. The basis for the analysis are case studies in 14 countries (including Turkey and Israel). The key question asked is how actors are connecting economic, social and natural systems in the different cases and how the connections made (or not) point to different ideas about modernization. The conclusions focus on some current information needs of policy-makers: the links between different forms of farm modernization, rural development and resilience, and the implications for agricultural knowledge systems and the new European Innovation Partnerships. It is emphasized that local capacities for transdisciplinary research need to be strengthened and that more attention should be paid to addressing modernization potentials that are less mainstream. The paper seeks to foster discussions that help overcome simplistic viewpoints of what ‘modernization’ entails. It is based on an earlier review paper by Knickel, Zemeckis and Tisenkopfs (2014).
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