Can technology help achieve sustainable intensification? Evidence from milk recording on Irish dairy farms

This article explores the potential of a farm technology to simultaneously improve farm efficiency and provide wider environmental and social benefits. Identifying these ‘win-win-win’ strategies and encouraging their widespread adoption is critical to achieve sustainable intensification. Using a nationally representative sample of 296 Irish dairy farms from 2015, propensity score matching is applied to measure the impact of milk recording on a broad set of farm sustainability indicators. The findings reveal that the technology enhances economic sustainability by increasing dairy gross margin and milk yield per cow. Furthermore, social sustainability is improved through a reduction in milk bulk tank somatic cell count (an indicator of animal health and welfare status). Conversely, milk recording (as it is currently implemented) does not impact farm environmental sustainability, represented by greenhouse gas emission efficiency. While the study shows that milk recording is a ‘win-win’ strategy, ways of improving current levels of utilisation are discussed so that milk recording achieves its ‘win-win-win’ potential in the future.     

Identifying agroecological mixed farming strategies for local conditions in San Antonio de Los Baños,Cuba

Building on previous research at the experimental and national scales, this study was carried out at the local scale over a four-year period on three farms of reference: one specialized dairy farm ‘Vaquería 10’ (33.7 ha) and two mixed farms, ‘Remedio’ (9.4 ha) and ‘La Sarita’ (47 ha). All three farms are located in the San Antonio de Los Baños municipality, Havana, Cuba. This study illustrates the application of the Ecological Framework for the Assessment of Sustainability (ECOFAS). This methodology consists of a cyclical structure of six steps, aimed at guiding the process of implementing innovative mixed (crop–livestock) farming strategies. Local stakeholders (farmers, researchers, extension officers and representatives of the ministry of agriculture in the municipality) identified alternative strategies for agriculture in the region, based on the critical technological, environmental and socio-economic factors constraining the current performance of farming systems. The results show that implementation of ‘best practice’ mixed farming systems management strategies in the region potentially can lead to a strong positive impact on land productivity, food self-sufficiency as well as improve socio-economic performance.     

Feed use intensification and technical efficiency of dairy farms in New Zealand

In recent years, the traditionally pasture‐based dairy farms in New Zealand have become more intensive by using higher proportions of supplementary feed. This trend has been attributed to a range of factors, such as productivity enhancement, overcoming pasture deficits and the improvement of body condition scores. However, there is a lack of knowledge as to how feed use intensification affects the technical efficiency of dairy farms in New Zealand. This paper addresses the research gap by estimating the impact of feed use intensification on the technical efficiency of New Zealand dairy farms, using a fixed effects stochastic production frontier model and a balanced panel of 257 farms from 2010 to 2013. The empirical results show that technical efficiency on New Zealand dairy farms is positively and significantly influenced by feed use intensification, herd size and milking frequency.     

‘Good’ farm management employment: Emerging values in the contemporary Irish dairy sector

The number of Irish dairy farms with herds greater than 100 cows has increased from 4.5 % in 2005 to 23 % in 2016. The abolition of the dairy quota in 2015 has led to predictions that this trend will continue and that an additional 6000 people will be required to work on dairy farms by 2025. Ownership of farms is esteemed, with farm employment perceived as a poor second option, so it is necessary to identify possible routes towards creating 'good' farm employment relationships. This paper explores the social, cultural and economic values of employers and employees in the context of early experiences of farm employment in post-quota Ireland. Using narrative analysis, this study found that employees gained esteem and pride from acquiring managerial responsibilities and receiving recognition for their abilities and accomplishments from their employers. Greater social recognition of employ’ abilities by peer groups and in networks (social capital) cemented ‘good employee’ status. Employers, in a context of unprecedented dairy production expansion, emphasised the need for and demonstrated changing of power structures to open up the farm to new forms of influence. However, employers’ reflexivity in support of employment relationships was undermined overall by what the management literature calls a weak ‘rewards system’ for employees. Without the supportive scaffolding of a formalised rewards system, relational gestures of responsibility-devolution and employ’ appreciation of employees may be insufficient to sustain quality farm management employment in the long term. Inevitably, this diminishes the attractiveness of farm employment, limiting the drawing of talent not only into farm employment but into associated capacity-building programmes.     

Productivity and farm size in Australian agriculture: reinvestigating the returns to scale

A positive relationship between farm size and farm productivity is often considered to be largely due to increasing returns to scale in farm production. However, using farm‐level data for the Australian broadacre industry, we found that constant or mildly decreasing returns to scale is the more typical scenario. In this study, the marginal returns to various farm inputs are compared across farms with different sizes. We found that large farms achieved higher productivity by changing production technology rather than increasing scale alone. The results highlight the disparity between ‘returns to scale’ and ‘returns to size’ in the industry, suggesting that productivity improvement among smaller farms can be made through increasing their ability to access advanced technologies, rather than simply expanding their scale.     

Calculating environmental cost indicators of apple farm practices indicates large differences between growers

This study evaluates the environmental impact of current apple cultivation practices in Flanders, Belgium. It evaluates integrated production, the most common practice, and it compares this production method with conventional and organic production. The assessment was based on Farm Accountancy Data Network data from 2010 to 2012 for 64 farms in the region and a life cycle approach was used. The findings showed no significant improvement in environmental impacts for integrated farms compared to conventional farms and, even more, the former showed significantly higher average impacts per hectare for the categories ‘acidification’, and ‘non-renewable energy use’ in comparison with the latter. The organic production group showed higher average impacts per kilogram due to lower yields. Secondly, impacts related to the categories ‘acidification’, ‘eutrophication’ and ‘global warming potential’ were monetized based on the shadow price method in order to obtain external costs. Results show that external costs increase the production costs for integrated farming at least with 5%, both when these costs are expressed per kilogram and per hectare. However, the findings show a large variability in impacts and costs per farm. Farm-specific practices have therefore an important influence on the total environmental cost rather than production group-specific practices.     

Plot-level technical efficiency accounting for farm-level effects: Evidence from Chilean wine grape producers

This paper applies alternative panel data models to a cross-sectional dataset that contains observations at the plot level for a sample of wine-grape farms in Central Chile. The input–output data as well as key attributes of the production system are at the plot level, at which individualized management exists. However, plots belonging to a particular farm are also subject to overall centralized (farm-level) management. Thus, this data configuration offers the possibility of analyzing technical efficiency (TE) both across plots and across farms. A Generalized True Random Effects model, which permits the separate identification of farm-level and plot-level inefficiency while controlling for unobserved farm-level heterogeneity, shows that TE varies across farms but not among plots within the same farm. Geographical location also affects grape production and agro-climatic conditions influence production levels, with grape farms located on cooler zones producing significantly less than their counterparts in warmer zones, as expected. The analysis underscores the value of using recent methodologies typically applied to panel data when cross-sectional information is available for individual plots within a farm unit or in similar settings.     

Diseconomies of Size with Fixed Managerial Ability

Managerial ability has important implications for farm growth. In this article we first show in a production model that increasing output with a fixed level of managerial ability can lead to a decrease in profits. Next, we discuss the effect that managerial ability has on economies of size. In the empirical part, economies of size are estimated for a sample of dairy farms using a proxy for managerial ability, which is calculated as a technical efficiency index. The results show that increasing farm size while holding managerial ability constant can be an important source of diseconomies of size.     

Patterns in Technical Efficiency and Technical Change at the Farm‐level in England and Wales, 1982–2002

English and Welsh farm‐level survey data are employed to estimate stochastic frontier production functions for eight different farm types (cereal, dairy, sheep, beef, poultry, pigs, general cropping and mixed) for the period 1982 to 2002. Differences in the relative efficiency of farms are explored by the simultaneous estimation of a model of technical inefficiency effects. The analysis shows that, generally, farms of all types are relatively efficient with a large proportion of farms operating close to the production frontier. However, whilst the frontier farms of all types are becoming more efficient through time because of technical change, it is also the case that the efficiency of the average farm for most farm types is increasing at a slower rate. In addition, annual mean levels of efficiency for most farm types have declined between 1982 and 2002. The factors that consistently appear to have a statistically significant effect on differences in efficiency between farms are: farm or herd size, farm debt ratios, farmer age, levels of specialisation and ownership status.     

Off‐farm work and technical efficiency on U.S. dairies

In this study, we investigate the impact of an increase in farm households’ off‐farm work on technical efficiency (TE) of U.S. dairies. We present a theoretical framework that implies that an increase in farm household off‐farm work decreases TE. We use two nationally‐representative samples of U.S. dairies (2010 and 2005 Agricultural Resource Management Surveys) and a parametric approach (stochastic frontier analysis) to empirically test the hypothesis. Results are generally consistent with the hypothesis and show that an increase in off‐farm work by the farm household is associated with a significant decrease in TE. In addition, results show that there is a statistically significant difference in TE between small, medium, and large farms. Small farms are associated with significantly higher off‐farm work and have lower TE than large farms, which implies that less off‐farm work by households with larger farms is at least partially responsible for the evidence of economies of scale in the U.S. dairy industry.     

Determining farm effects attributable to the introduction and use of a dairy management information system in The Netherlands

Yearly production and reproduction data on dairy farms in The Netherlands were obtained to determine whether management information systems significantly improved herd performance variables (management information systems (MIS) effects). The analysis included 357 adopters of a management information system and 357 herds were used as controls. The data comprised years 1987 through 1996, and included for the adopters both the ‘before’ and ‘after’ period. Panel data analysis enabled to estimate MIS effects both within and between farms, allowing for a separation of farm‐specific effects and common (trend) effects. Adoption and use of a management information system resulted in a significant annual increase in rolling herd average milk (carrier) and protein production of 62 and 2.36 kg per cow, respectively. Calving interval was shortened by 5 days. The pay‐back period was approximately 5 years of the system (including the hardware), and therefore, MIS appears to be economically profitable.     

The novelty of simple and known technologies and the rhythm of farmer-centred innovation in family dairy farming in Brazil

Family dairy farming is under threat from the expansion of the sugarcane economy in south-eastern Brazil. This paper analyses an intervention programme which aimed to intensify dairy production and make family dairy farming sustainable in this competitive context. The case study of the ‘Balde Cheio’ Programme (Full Bucket) can be seen as an alternative method of knowledge generation to that of the dominant research approach which prioritizes cutting-edge technologies. This paper characterizes this farmer-oriented innovation programme for dairy farming systems, in which research, development and extension are seen as a long-term learning process. It analyses how the programme has been adapted to fit the diversity of situations found amongst farmers and to heterogeneous production conditions. The study relates the circulation of knowledge, the search for innovation by recombining apparently simple and known technologies, the use of experiments on the farm and the adaptation of the rhythm of innovation to the specific situation of the farm as the critical issues to achieve sustainable production systems.     

State‐contingent analysis of farmers’ response to weather variability: irrigated dairy farming in the Murray Valley,Australia

The agricultural sector is commonly regarded as one of the most vulnerable to climate change. Current understanding of the impact of climate change on this sector relies on the underlying assumptions about farmers’ possible responses to weather variability, including changes in crop choice, input combinations and land management practices. Many previous analyses rely on the implicit (and restrictive) assumption that farmers operate under a fixed technology set across different states of nature. This assumption, represented through stochastic production or profit functions, is commonly made but seldom tested and may understate farmers’ responses to climate change if state‐contingent production technologies are, in reality, more flexible. The potential for farmers to adapt production technologies in response to unforeseen events is at the core of the state‐contingent approach. Advanced in Chambers and Quiggin (2000), the theory contends that producers can manage uncertainty through the allocation of productive inputs to different states of nature. In this article, we test the assumption that farmers’ observed behaviour is consistent with the state‐contingent production theory using farm‐level data from Australia. More precisely, we estimate the milk production technology for a sample of irrigated dairy farms from the southern Murray–Darling Basin over the period from 2006–2007 to 2009–2010.     

A Parametric Approach to Estimating Eco‐Efficiency

The concept of eco‐efficiency is becoming increasingly popular as a tool to capture economic and environmental aspects of agricultural production. The literature to date has exclusively used the Data Envelopment Analysis (DEA) approach to measure producers’ eco‐efficiency. We show that it can also be estimated using a Stochastic Frontier Analysis (SFA) approach. Our approach not only allows controlling for random noise in the data but also permits an analysis of the potential substitutability between environmental pressures. We provide an empirical application of our model to data on a sample of Spanish dairy farms.     

Analysing Production Technology and Risk in Organic and Conventional Dutch Arable Farming using Panel Data

This paper compares the production technology and production risk of organic and conventional arable farms in the Netherlands. Just–Pope production functions that explicitly account for output variability are estimated using panel data of Dutch organic and conventional farms. Prior investigation of the data indicates that within variation of output is significantly higher for organic farms, indicating that organic farms face more output variation than conventional farms. The estimation results indicate that in both types of farms, unobserved farm‐specific factors like management skills and soil quality are important in explaining output variability and production risk. The results further indicate that land has the highest elasticity of production for both farm types. Labour and other variable inputs have significant production elasticities in the case of conventional farms and other variable inputs in the case of organic farms. Manure and fertilisers are risk‐increasing inputs on organic farms and risk‐reducing inputs on conventional farms. Other variable inputs and labour are risk increasing on both farm types; capital and land are risk‐reducing inputs.     

Productivity and Producer Welfare in the Presence of Production Risk

Production risk is an inherent characteristic of agriculture and changes in production risk will affect the welfare of risk‐averse producers. Using standard concepts from the literature on uncertainty, we introduce a welfare measure which comprises total factor productivity (TFP), production risk and farmer risk preferences, and which reflects the impact on producer welfare of changes in production technology. An empirical application is carried out using data from a sample of Spanish dairy farms which shows how the positive impact of increases in TFP on welfare can be offset by increases in the risk premium (‘cost of risk’) to the point where welfare may decrease.     

Heterogeneity of Long‐run Technical Efficiency of German Dairy Farms: A Bayesian Approach*

In parametric efficiency studies, two alternative approaches exist to provide an estimate of the long‐run efficiency of firms: the dynamic stochastic frontier model and the generalised true random‐effects model. We extend the former in order to allow for heterogeneity in the long‐run technical efficiency of firms. This model is based on potential differences in firm‐specific characteristics and in firms’ inefficiency persistence. The model is applied to an unbalanced micro‐panel of German dairy farms over the period 1999 to 2009. Estimation of long‐run technical efficiency and inefficiency persistence is based on an output distance function representation of the production technology and estimated in a Bayesian framework. The results suggest that heterogeneity in long‐run technical efficiency of farms is mostly attributed to discrepancies in farm‐specific factors rather than differences in farms’ inefficiency persistence. Farm size is positively related to long‐run technical efficiency while subsidies exert a negative effect on the long‐run technical efficiency of farms. Inefficiency persistence is found to be very high, but heterogeneity in this persistence is low.     

Herd Growth,Farm Organisation and Subsidies in the Dairy Sector of Russia and Kazakhstan

Initially taken as a template for farm restructuring after the demise of collective agriculture, the ‘Western family farm model’ has taken root in the former Soviet countries only belatedly and incompletely. We examine dairy structures in Russia and Kazakhstan and analyse the drivers of recent herd growth. We are specifically interested in the role of farm management and organisation, vertical integration, and the role of policy. Regression analysis based on a sample of 180 randomly selected commercial dairy farms, using an innovative simultaneous equation framework, shows that better herd management and access to milk marketing contracts were more effective in stimulating herd growth than current subsidy payments. We do not find evidence that milking plants belonging to corporate entities or even supra‐regional agroholdings grow more substantially than medium‐sized individual farms. Twenty‐five years after the end of central planning, structural change among commercial dairy farms in Russia and Kazakhstan appears similar in many ways to the patterns observed in the West more recently: smaller farms catch up in terms of herd growth and classical family‐run operations coexist with or even emulate vertically integrated agribusinesses based on hired labour. In moving toward this ‘new normal’ of farming structures, commercial dairy farms in Russia may even be a few steps ahead of their Western counterparts. At the same time, the still sizeable but stagnating group of subsistence producers in rural households finds no equivalent in the West.     

Professional urban agriculture and its characteristic business models in Metropolis Ruhr,Germany

‘Low-cost specialization’, ‘differentiation’, and ‘diversification’ are three overarching business models of professional urban agriculture in developed countries. Manifold city-adjusted farm activities belong to these business models resulting in the characteristic farm heterogeneity of urban areas. This paper makes use of the business models as tool for a geo-statistical analysis to spatially investigate farming patterns in reference region Metropolis Ruhr, Germany. Additional farm interviews substantiate findings of the geo-statistical analysis by focusing on horticulture as a common farm activity towards ‘low-cost specialization’, direct marketing and participatory farming belonging to ‘differentiation’, and equestrian services as a representative of the ‘diversification’ business model. These farm activities and underlying business models concentrate and tend to spatially cluster in the metropolitan’s center where population density is highest and farmland proportion is lowest. Agriculture plays a significant role in Metropolis Ruhr cultivating about one-third of the metropolitan area, but on-going loss of farmland and short-term lease of land affect farms considerably by complicating access to land. Most differentiated and diversified farms require certain amount of farmland to be successful, which is threatened by further farmland losses along with increased competition for the remaining farmland. Long-term planning security is crucial for farms focusing on high added value crops and organic farming. Progressively emerging participatory farming activities demonstrate urban farms’ abilities to innovatively adapt to societal demands. Better knowledge on professional urban agriculture’s farm activities and business models is of importance for farms and their related advisory services to address the urban context in farm development strategies more accurately, but also for public authorities’ planning and policies in land-related decision making. Economic viability of professional urban agriculture is the key requirement for additional social, environmental, and landscape functions within urban areas.     

Farm-level determinants of product conversion: Organic milk production

We investigate the role of technology in the decision of dairy farmers to convert to organic production methods. We measure the characteristics of the production technology using data from the USDA Agricultural Resource Management Survey and a recently developed functional form that allows for a global approximation to the unknown distance function without compromising approximation at the data boundaries. Conventional dairies with lower technical efficiency, higher returns to scale, and the ability to easily substitute away from restricted inputs are more likely to convert to organic production. Findings suggest further consolidation in the conventional industry as low-performing farms exits for the organic industry.