Entry, Exit, and Farm Size: Assessing an Experiment in Dairy Price Policy

This article models and estimates the forces behind farm exits and changes in herd-size among Connecticut dairy farms under the New England Dairy Compact. A model of sunk costs and farm capital investment is used to specify two econometric estimations: a random effects probit model of farm entry and exit and an autocorrelated generalized least squares panel data model of farm size. The Dairy Compact's price strategy reduced farm exits and moderately increased cow numbers. In contrast, development pressures and historically low unemployment rates increased farm exits.     

Input Substitution,Productivity Performance and Farm Size

This paper develops a theoretical model to examine the relationship between the input elasticity of (technical) substitution and both farm total factor productivity and size. In the presence of ongoing technical change and its factor bias, the ‘income effect’ arising from farms' cost minimising behaviour enables them to increase productivity by saving inputs or, through the dual equivalent, enlarging farm size. As such, farms with higher elasticities of substitution tend to grow larger and become more productive, which provides a new mechanism through which farm heterogeneity in productivity growth can be examined. Empirical evidence from Australian broadacre agriculture supports this theory and points to important policy implications.     

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.     

The Measurement of Average Farm Size

Comparisons are regularly drawn between the average sizes of farms in particular countries or regions and in different farm-type categories. Indeed average farm size is often considered to explain (or create expectations of) changes or differences in technical or economic efficiency through time or between countries. There are, however, a number of issues involved in specifying what is meant by a farm and in choosing a suitable measure of farm size. These are examined prior to a discussion of various measures of average size, one of which (the mid-aggregate point) is described in some detail. The measures are illustrated with reference to agricultural holdings in England and in the Member States of the European Union.     

Vertical Integration in the Pork Industry

This article provides an economic explanation regarding why the share of U.S. pork raised on company-owned farms with hired management (integration) is increasing relative to production through independently owned-and-operated contract growers (contracting). The article develops a property rights model that shows how in certain circumstances production contracts do not transfer sufficient control over the use of production assets to intermediaries. On the other hand, integration removes certain grower incentives, with the result that production on company farms tends to be relatively costly. Practical examples of factors that influence the likelihood of full integration are emphasized.     

Farm Size,Technology Adoption and Agricultural Trade Reform: Evidence from Canada

Using detailed census data covering over 30,000 farms in Alberta, Saskatchewan and Manitoba, Canada, we document the vast and increasing farm size heterogeneity, and analyse the role of farm size in adapting to the removal of an export subsidy in 1995. Consistent with the Alchian-Allen hypothesis, the increase in per-unit trade costs due to the reform was associated with farms of all sizes shifting their production of crops from low value wheat to higher value canola. We find that switching to new labour-saving tillage technologies and away from summerfallow in response to the large negative shock to grain prices caused by the reform varied across the farm size distribution. We develop a theory of heterogenous farms and technology adoption that can explain our findings.     

Improving Food Safety at the Dairy Farm Level: Farmers' and Experts' Perceptions

This study examines farmers' and experts' perceptions of important action points for improving food safety on the dairy farm. Adaptive conjoint analysis is used to elicit these perceptions. A comparison on the basis of professional background (farmers versus experts) shows no major differences in the perceptions regarding chemical and microbiological hazards. Two-stage cluster analysis of individual perceptions regarding chemical and microbiological hazards results in four and three distinct groups, respectively. Although results indicate a rather good level of farmers' knowledge of most important action points, the findings can be used to modify current education programs aimed at improving farm-level food safety.     

The Economics of Anaerobic Digester Operation on a Minnesota Dairy Farm

Anaerobic digesters for livestock operations are receiving attention for energy production and odor control. A farm-based digester went into operation in September 1999, on an 800-cow dairy farm in Minnesota. The goals of this paper are to analyze the contribution that a digester system can make to dairy farm profitability, and to demonstrate the impact of government and utility subsidies on profitability. Results indicate that the current selling price of electricity is not sufficient to justify building an anaerobic digester in most cases unless there is a subsidy or significant nonenergy market benefits.     

农产品行业协会发展研究--以温州为例

温州农产品行业协会主要是围绕当地已形成主导产业的林果、蔬菜、畜产品等某一种特色农产品生产经营，在区域内聚集众多的大小不同的企业和农户家庭结网合作。由于生产经营同种产品的农户和企业相互关联，使得企业和农户具有了凝聚的“内核”，建立了正式和非正式的联系，通过联合经营，按专业化方式进行生产，从而获得了农产品行业的集群效应和生产经营的规模效益。     

Comparing the Profitability of a Greenhouse to a Vertical Farm in Quebec

Rapidly growing demand for year‐round fresh food, regardless of the weather or climate, is driving demand for controlled environment agriculture systems. Sales from greenhouses (GHs) are growing at 8.8%, while sales from vertical farms (VFs) are growing at 30%. It is commonly believed in industry circles that a VF cannot economically compete with a GH, due to the high cost of powering artificial lighting. Nonetheless, researchers have yet to analyze the economics underlying a VF, let alone compare the profitability of a VF to that of a GH. This research gap is particularly relevant to Canada, as it is uniquely positioned to be a leader in the VF market. Below, we report the results of a detailed simulation of the profitability of growing lettuce in a VF and in a GH located near Quebec City. Surprisingly, we find that the costs to both equip and run the two facilities are very similar, while the gross profit is slightly higher for the VF.     

Vertical Integration and Sunk Capital in Transition Economies

In recent years a distinction has been made in the development literature between “Asian” poverty, which is thought to be the result of high rural population densities and high rates of landlessness, and “African” poverty, which is more the result of sparse populations farming poor quality land and cut off by inadequate infrastructure from markets for goods, labour and credit. This paper pursues this distinction in the context of Indonesia and points out that in recent years the highest incidence of poverty has been found not in the densely settled islands of Java and Bali, but in the more remote and less populated provinces in the eastern part of the archipelago. This paper explores the correlates of poverty by province in Indonesia in 1996 and finds support for the view that the poorest provinces are those characterized by low population densities, undeveloped markets, low road densities and low educational attainment. The policy implications of these findings are examined in the final part of the paper.     

The Contribution of Financial Management Training and Knowledge to Dairy Farm Financial Performance

Cooperative Extension and other institutions (e.g., technical colleges, on-line self study programs, university short courses, etc.) frequently stress the importance of financial management education for successful farming operations. The research reported in this paper attempts to quantify the contributions of such training to the financial performance of dairy farms in Wisconsin. Our results suggest a link between a deeper understanding of financial concepts and greater financial returns but that it is a relatively weak one. Moreover, simple exposure to farm management training programs and self-confidence in farm financial decision-making ability are not significantly related to farm financial outcomes.     

新疆乳制品加工企业一体化经营探讨

新疆地域辽阔有着丰富的天然草地资源,是我国的四大牧区之一,发展畜牧业有着得天独厚的优势,乳制品加工的优势没有充分显现出来的。在新疆农业战略性调整过程中,如何促进乳制品加工企业一体化经营,提高乳制品的市场竞争力,无疑是一个值得我们探讨的问题。一、乳制品加工企业纵向一体化的发展(一)前向一体化北疆地区的牛奶生产的前向一体化主要是国有牛场和集体牛场自办加工厂,然后进行销售,前向一体化的做法如图1所示:北疆地区的前向一体化表现在各国有牛场自办乳品加工,国有牛场进行前向一体化加工的奶制品种类主要是袋装鲜牛奶(消毒奶)和…     

Cost Structure and Vertical Integration between Farming and Processing

In several food‐producing sectors, we observe vertical integration between the farming and processing stages. The salmon industry, which has motivated this paper, has seen a rise in large vertically integrated companies over the last decade, with direct ownership of production activities including hatcheries, fish processing and exporting. Both the farming and processing stages have become more capital intensive, which has led to a steeper U‐shaped average cost (AC) curve. In this paper we present a theoretical link between this technological shift and vertical integration: in a repeated game model of relational contracting, we show that when the AC curve is sufficiently steep, then processors and farmers are more likely to vertically integrate. The reason is that steep AC curves make it costly to deviate from the optimal production scale, which in turn makes processors more vulnerable to hold‐up and opportunistic behaviours from its suppliers.     

On the Role of Risk Versus Economies of Scope in Farm Diversification With an Application to Ethiopian Farms

This article investigates the economics of farm diversification. The analysis assesses economies of diversification using a certainty equivalent measure. It identifies two components: one associated with expected income, and one associated with risk exposure. This integrates two lines of research explored in previous literature: economies of scope and risk management. We examine the roles played by complementarity, scale and concavity effects in economies of diversification. The approach is applied to diversification decisions made on Ethiopian farms, with a focus on production uncertainty. The econometric analysis finds large complementarity benefits, providing incentives to diversify. But this is tempered by (non)‐concavity effects that provide incentives to specialise. The analysis also documents how risk affects diversification, including both variance and skewness effects. It provides new insights on economic tradeoffs between farm diversification and specialisation.