The influence of management decisions and external factors on the dairy farmer's environmentally friendly farming objective: the Green Dairy experience

Ten dairy farms participated in an EU project that aimed to improve nitrogen use and assist with the adoption of more environmentally friendly farming practices. Nitrogen use and management decisions were monitored during 2003, 2004 and 2005. Nine farms improved nitrogen use (nitrogen output relative to input) in Year 2. Four farms maintained or further improved nitrogen use in Year 3. Management decisions and external factors that improved nitrogen use were increasing farm milk output, adopting best management practices for nitrogen use, growing forage crops that required less nitrogen than grass and favourable crop production conditions that rendered large quantities of good quality forage. Decisions that worsened nitrogen use were increasing cow numbers without sufficient management support, the late start of supplementary feeding when grass quality declined, setting the target yield too high, pursuing a higher milk price, less palatable silage and disease. Sufficient slurry storage is essential to improving nitrogen use. The savings from lower nitrogen input and the revenue from milk were in no proportion to the investments required for additional slurry storage, however. The farmers did adopt environmentally friendly practices, but only to the degree their businesses were able to sustain.     

Measuring financial performance on dairy farms

The motivation for this paper was to improve the information provided by the extension service for dairy farming. Databases as the Norwegian Dairy Financial Recording (NDFR) are commonly used for comparative analysis of farms. In the present paper, the problems related to these comparisons are discussed. Four different measures of financial performance are presented. The measures are; the gross margin, extended gross margin, and two different efficiency indexes based on use of data envelopment analysis (DEA). All four measures have advantages and disadvantages. The two gross margins are suitable for ranking farms when evaluating the impact of operative management variables, e.g., disease and miscellaneous welfare enhancing inputs on performance. However, efficiency indexes, which are estimated as ratios of actual and maximum output, given inputs, are more suitable when evaluating the impact of strategic management variables, e.g., concentrate or roughage per litre milk produced on performance.     

Estimating technical efficiency under unobserved heterogeneity with stochastic frontier models: application to northern German dairy farms

This article uses panel data estimation techniques to examinetechnical efficiency of individual dairy farms in northern Germany.To the extent that agricultural production is characterisedby heterogeneous production conditions, estimation techniquesthat do not account for unobserved heterogeneity produce biasedefficiency estimates. We therefore estimate a number of conventionalpanel data models and Greene's recently proposed ‘true’random-effects model, as well as an extension of the model toascertain the effects of different specification on the productionfunction and efficiency estimates. Our results appear to supporttheoretical expectations and previous findings according towhich a specification that is both time-variant and also controlscorrelations between unobserved heterogeneity and the explanatoryvariables avoids heterogeneity bias and thus ensures consistentefficiency estimates.     

The links between management's critical success factors and farm level economic performance on dairy farms in Sweden

Management's critical success factors (MCSFs) are used to indicate how farm profits develop, but their usefulness as profitability predictors has previously not been analyzed statistically. This paper explores the usefulness of some commonly used MCSFs in Swedish dairy farms, by investigating whether the MCSFs are significant predictors of economic efficiency. Further, the paper takes a comprehensive view of evaluating farm level efficiency, in that all major input and output efficiency scores are estimated. Previous literature has focused on only one score, or on only one perspective. Our results show that cost efficiency is the more problematic part of the profitability process. Especially the allocative part needs to be improved. Moreover, the results show that the MCSFs milk quality, herd fertility and involuntary culls ratio may not work as indicators of economic performance, whereas milk yield per cow and the mastitis ratio are significant indicators.     

Economic analysis of the impact of adopting herd health control programs on smallholder dairy farms in Central Thailand

The economic impact of adopting herd health programs for mastitis and reproduction by small-scale dairy producers of Central Thailand was assessed using a policy analysis matrix (PAM). Following a reduction in the incidence of bovine disease on adopter farms, an increase in private net profits is observed. More importantly the social costs of supporting dairy farmers is reduced; the PAM effective protection coefficient was reduced by 35% for mastitis program adopters and by 44% for reproductive program adopters, indicating improved social efficiency of dairy policy. Other indicators of efficiency and policy implications are discussed.     

Determinants of efficiency of vegetable production in smallholder farms: The case of Ethiopia

Improving production efficiency remains as a plausible means of increasing productivity when resource reallocation, and the creation and adoption of new technologies are limited. Technical, allocative and economic efficiencies are derived from a sample of smallholder vegetable farmers in Ethiopia using parametric and non-parametric methods. The results reveal that the two methods yield similar estimates and the existence of substantial inefficiencies in production as well as efficiency differentials among farmers. The analysis of the determinants of efficiency of vegetable production using regression models show that low asset ownership, illiteracy, large family size, inadequate extension contacts, small farm size, age, low off/non-farm income and high consumer spending are the major socio-economic factors causing inefficiency of vegetable production in the study areas. A comparison of the market-driven (vegetables) with the whole-farm (crops and livestock) production efficiency indicates that lower economic efficiency scores for the former might be related to the limited access to capital markets, high consumer spending, and large family size.     

Tree farms: Driving forces and regional patterns in the global expansion of forest plantations

People have planted trees in rural places with increasing frequency during the past two decades, but the circumstances in which they plant and the social forces inducing them to plant remain unclear. While forests that produce wood for industrial uses comprise an increasing number of the plantations, most of the growth has occurred in Asia where plantations that produce wood for local consumption remain important. Explanations for these trends take economic, political, and human ecological forms. Growth in urban and global markets for forest products, coupled with rural to urban migration, may spur the conversion of fields into tree farms. Government programs also stimulate tree planting. These programs occur frequently in nations with high population densities. Quantitative, cross-national analyses suggest that these forces combine in regionally distinctive ways to promote the expansion of forest plantations. In Africa and Asia plantations have expanded most rapidly in nations with densely populated rural districts, rural to urban migration, and government policies that promote tree planting. In the Americas and Oceania plantations have expanded rapidly in countries with relatively stable rural populations, low densities, and extensive tracts of land in pasture. If, as anticipated, the growing concern with global warming spurs further expansion in forest plantations in an effort to sequester carbon, questions about their social and ecological effects should become more pressing.     

CAP payments and spatial diversity in cereal crops: An analysis of Italian farms

Agricultural biodiversity conservation has been recognized as a fundamental resource for the maintenance of ecological and economic functions. In this paper, we test the hypothesis that the Common Agricultural Policy (CAP) has an impact on crop diversity decisions of farm managers. In so doing, we allow the diversity decision to depend on a rich set of economic and agro-ecological variables, such as prices of the most common cereal varieties, and agro-ecological and socio-economic characteristics at farm and regional level. Using a panel dataset over the period 2004–2010, we compare the results obtained from pooled-OLS and dynamic panel GMM estimators. The empirical analysis shows the existence of a positive relationship between CAP payments and diversity. In addition, decoupling subsidies from production seems to have a positive effect on biodiversity.     

Scale Economies and Inefficiency of U.S. Dairy Farms

This study employs data drawn from the 2000 Agricultural Resource Management Survey, a U.S. Department of Agriculture-sponsored farmers' survey. The article estimates returns to scale relationships across dairy farms of different sizes and across different regions, incorporating variables hypothesized to influence farm performance. Results point to significant scale economies in U.S. dairy farms and underscore the importance of taking account of inefficiency when estimating scale economies. Contrary to previous research, the preferred cost function specification does not show a region of decreasing returns to scale. This finding helps explain why the average size of dairy farms has been increasing.