How limiting is finance for Dutch dairy farms? A dynamic profit analysis

Accessibility to financial resources is considered a prevalent problem in the agricultural sector. We develop an approach to quantify the long-term opportunity costs of financial constraints in relation to peers who do not face any financial constraints. Using data on past financial performance, we assess creditworthiness and the size of an additional accessible bank loan to farmers. Combining this with data on reported expenditure, we determine the accessible finance. We quantify the opportunity cost as the forgone dynamic profit (intertemporal profit in current-value terms) from financial constraints. Using data envelopment analysis, we apply our approach to 264 specialised Dutch dairy farms for the years 2006–2017 and explore the potential impact of changes in finance provision for several scenarios. Our results show an increasing gap between frontrunners and other farmers, as the latter generate progressively less dynamic profit in comparison to their best peers. The gap between the dynamic profit of the average farm and that of its best peers from their production and investment decisions made over the span of 1 year grew from €40,040 in 2009 to €114,548 in 2017. However, the growth is not driven by insufficient access to finance. Financial constraints can only explain 6% of the forgone dynamic profit in 2009 and as little as 1% for 2017. The number of farms classified as financially constrained in comparison to their peers decreases in our sample from 44% in 2009 to 8% in 2017. This suggests that non-financial factors are driving the growing gap.     

Are Local and Organic Claims Complements or Substitutes? A Consumer Preferences Study for Eggs

This paper provides an analysis of consumer preferences for product claims, specifically about origin and production methods. In particular, it addresses two important questions: i) whether consumers are willing to pay a premium for food products carrying these claims; and ii) whether local and organic claims are complements or substitutes. A choice experiment designed to estimate two‐way interactions was undertaken in Spain for eggs. The findings show first, that consumers are willing to pay a positive premium price for an enhanced method of production (that of barn, free‐range and/or organic instead of cage produced eggs) as well as for the proximity of production (local, regional and national over imported). Second, the findings show that consumer preferences for the claims are heterogeneous with two consumer segments being identified: “origin preference”, the larger segment, and the “production method preference”. Results show that organic and local claims were complements for the larger first segment but that free‐range and local/regional claims were substitutes for the second smaller segment. These results provide the marketing chains with insights applicable for pricing strategies.     

To populate or preserve? Evolving political-demographic and environmental paradigms in Israeli land-use policy

There has been a recent proliferation of national land-use policies that emphasize protecting open space and ecosystem integrity. However, countries grappling with internal political conflict, or that are engaged in military conflicts with neighboring countries, have priorities that focus on control of land in areas where state sovereignty is perceived to be threatened. These two concerns, political-demographic control and environmental protection, create very different paradigms for how to think about open space policy. The objective of this paper is to consider the impact of competing paradigms in land-use policy formulation and implementation—one that encourages sprawl and the other that encourages compact development and the preservation of open space. We use Israel as a case study where both political demography and environmental land-use paradigms are currently influencing policy and planning. We explore the historical evolution of both land-use paradigms and consider how they are currently competing in the formulation and execution of land-use policy decisions. We consider how these distinct priorities are playing out in current discourse and policy implementation, and characterize the past, current and prospective future physical outcomes of policies on the landscape. Our goal is to alert policy makers and land-use scholars of the subtle and contradictory influence of political-demographic land-use priorities with regard to their potential impact on the successful implementation of environmental policies. The Israeli case study is indicative of a diversity of countries that have a history of political-demographic land-use policies, but have also begun to adopt environmentally motivated policies.     

Are preserved farms actively engaged in agriculture and conservation?

This study addresses the question of whether farms enrolled in land preservation programs are actively engaged in agricultural or conservation activities. Data are drawn from an original survey administered to preserved farm owners in the states of New Jersey, Maryland, and Delaware in 2011. “Actively engaged” is defined as investment in conservation projects, buildings, equipment, or irrigation since the land was preserved. Affirmative answers to the survey's investment questions range from a low of 19% for irrigation to a high of 69% for equipment. Special attention was paid to differences between lifestyle farmers and small and large commercial farmers, which are classified using the USDA typology developed in 2000. Regression analysis estimates differences in investment behavior across these groups as well as farm tenure categories, controlling for farm size, program/state location, and demographic variables. Only owners who employ tenants or managers exclusively on their land were found to invest significantly less than the largest professional farmers, and they did so across all four types of investment.This study's findings support preservation goals articulated by legislators and program administrators, because (1) agricultural and land stewardship investments appear to be widespread on preserved farms, partly due to administrators’ preference for larger parcels, (2) there is no evidence that “hobby farmers” are disproportionately attracted to farmland preservation programs – in fact the opposite seems to be true – while those that exist in our sample behave similarly to the largest commercial farmers, (3) although tenant farming is associated in the sample with lower rates of investment, it is less common on preserved farms than on all farms in the three study states. The matter of land tenure, highlighted in this as in other studies, has not yet become a primary focus of either farm-behavioral research or state agricultural policy.     

Are Kansas farms profit maximizers? A stochastic additive error approach

Profit maximization is widely assumed as a behavioral objective in agricultural economics research. This paper applies deterministic and stochastic tests to examine adherence of a sample of Kansas farms to the profit maximization hypothesis. A modification of Varian's stochastic method is developed to account for farms that have zero netput. Results indicate that none of the farms satisfy the joint hypothesis of profit maximization and nonregressive monotonic technological change under the deterministic case. Results support the existence of nonregressive technological change during the study period for the sample of Kansas farms. Using a rejection criterion of 10% for measurement error in quantity data, most of the sample of Kansas farms (81% based on the additive error model and 92% based on the proportional error model) adheres to joint hypothesis of profit maximization and nonregressive monotonic technological change. The consistency with profit maximization is stronger for those farms that do not enter and exit in the production of an output.     

Deliberation or doctrine? Land use and spatial planning for sustainable development in Sweden

Spatial planning has been earmarked as an important tool for achieving sustainable development. In Sweden the important task of planning for sustainable spatial development and land use falls largely to the local authorities, since there is no official institute for spatial planning at a national or regional level. This article investigates local planning for sustainable development by analysing recent municipal comprehensive plans, which it is argued are a major instrument for this purpose. Although comprehensive plans are statutory, their design and content is very much at local discretion, and for the most part, not a rigid process governed from above. For this reason, a template analysis was used, where the template was built from the contents of the comprehensive plans, and not from a predefined understanding of what sustainability is or how planning for sustainable development should be done. What the findings reveal, however, is that there is not much deliberation concerning the meaning(s) of sustainable development, and, further, that the planning principles considered necessary to bring about sustainable development were not exclusively regarded as sustainable as such, but rather as part of a general ‘belief system’ about prudent planning—sustainable or not. It is suggested that, rather than rethinking planning, planners have internalized the concept of sustainable planning into the existing ‘belief system,’ and thus, the planning principles have become ‘sustainable’ by default.     

Italian Consumers’ Preferences for Pasta and Consumption Trends: Tradition or Innovation?

Abstract

The aim of this study is to know Italian consumers’ preferences for Pasta and consumption habits. Food culture and concerns about food security and product innovation were investigated. A sample of Italian consumers was interviewed. Consumer’ profile, motivations and purchasing behavior were described. Relationships between observed variables and the latent constructs that explain the preferences were highlighted. There is asymmetric information between consumers and producers. Consumers believe Pasta is made with Italian grains, and therefore it is healthy and safe, although that’s not always the case. Intrinsic and extrinsic high quality, which derives from growing and production technologies, is required.     

Landscape governance for or by the local population? A property rights analysis in Austria

Diverse and unique landscapes not only are one of the key assets of Austrian tourism industry, but are also highly valued for local identity, quality of life and their ecological functions. Society tries to prevent unintended landscape change and thereby purposefully intervenes in landscape development by countless environmental regulations, contracts with landholders, agri-environmental schemes, landscape and nature reserves, food-related activities such as ‘eat the view’ and labels of origin. In the face of increasing state control and the growing influence of (inter-) nationally acting civil society groups, the paper poses the question whether the local population still has a saying in the governance of their landscape. Is it the local people, their costumes and institutions that shape the diversity and uniqueness of landscapes (i.e., the ‘root meaning of landscape’ [Olwig, K.R., 2002. Landscape, Nature, and the Body Politic. From Britain's Renaissance to America's New World. The University of Wisconsin Press, Madison.]) or is local peculiarity lost to national or international landscape control? The paper analyses the changing structures of use and control rights to Austrian landscapes and resulting shifts between locally driven and centrally controlled landscape change. The paper is a meta-analysis of ten empirically founded interdisciplinary research projects on cultural landscapes in Austria. The results are compared with international literature that indicates a loss of control of the local rural population over their natural resources. In the Austrian case however, the local population (re-) negotiates and (re-) interprets complex and conflicting international and state regulations according to their respective needs before concretizing them in actual land use practises. Some participation projects and self-governed local civic society movements integrate non-landholders. In few of homogenisation forces such as CAP and international regulations, diverse and unique landscapes call for the involvement of the local preferences, traditions, knowledge and skills—of both local non-landholders and landholders.     

Is Input Mix Inefficiency Neglected in Agriculture? A Case Study of Pig‐based Farming Systems in England and Wales

The principal concern of this article is the relative importance of input mix as a source of inefficiency. Emphasis in efficiency analysis studies in agricultural production has historically focused on technical inefficiency as a single concept until methodological advances enabled it to be decomposed into pure technical inefficiency and scale inefficiency. But, this advance was insufficient to identify what we consider to be the major source of inefficiency in agricultural production, namely mix inefficiency. We consider that farm enterprises may be particularly susceptible to input mix inefficiency because of restrictions on movement around the frontier isoquant; delays in the adoption of improved technologies embodied in new vintages of production processes; risk as a source of friction in input allocation decisions; and the potential for inconsistency in simultaneously attempting to reach points of allocative efficiency and mix efficiency in input use. We use non‐parametric methods to calculate a Hicks–Moorsteen productivity index using panel data for a sample of specialised pig producers in England and Wales. This index is then decomposed into measures of technology, technical efficiency, scale efficiency and mix efficiency for an input orientation. Results of the analysis show that the estimated mean mix inefficiency (0.736) was substantially larger than mean technical inefficiency (0.975) and mean scale inefficiency (0.957) over the study period.     

Is there a future for small farms in developed countries? Evidence from the French case

This research aims to identify the specific characteristics of small farms in developed countries and the factors that influence their survival and growth. Using the case of France, we employ statistical and econometric analysis of data from the Farm Structure Survey (N = 70,000) for the period 2000–2007. The principal findings suggest that small farms are no more likely than other farms to employ “alternative” strategies to the predominant model of increasing farm size, nor are they more likely to diversify on‐farm activities or operate under quality‐labeled production systems, with the notable exception of organic agriculture. However, where small farms do adopt or practice these activities, they are seen to have a favorable effect in ensuring their survival and growth. In contrast, we are unable to conclude that pluriactivity of farm households has a positive impact on the survival of small enterprises. The effect of geographical location on small farms is largely expressed in their concentration in mountainous or disadvantaged regions. Overall, the trajectory of small farms is marked by farm exit, principally as the result of farmers retiring at the end of their careers. The small farm sector is also revitalized by both larger farms declining and thus being reclassified as small farms, as well as the progressive entry into agriculture of small farm holders whose income was previously derived largely off‐farm.     

Local sustainability initiatives in English National Parks: What role for adaptive governance?

Adaptive governance has assumed growing importance in natural resource management literatures, emphasising learning and adaptation among actors at different political administrative levels and geographic scales as a precondition for the emergence of sustainable development. Here we assess this claim by examining five case studies of ‘good practice’ in sustainability, drawn from a national survey conducted in English National Parks. Specifically, we evaluate whether (1) adaptive governance characteristics are present in these ‘good practice’ initiatives, and (2) what governance role, if any, National Park Authorities have played in mediating individual and collective activities and behaviours within these projects at different levels and scales. We conclude with a critical assessment of the capacity of the adaptive governance approach to furnish new understandings of sustainable development initiatives in English NPs.     

Introduction to the special issue “small farms: decline or persistence?”

This issue of Agricultural Economics contains articles from a seminar entitled “Small Farms: Decline or Persistence?” held at the University of Kent. This issue includes nine papers selected from more than 50 papers presented at the seminar. Articles published use a range of econometric and simulation methods to provide a suite of case studies. Topics studied range from such fundamental issues as what constitutes a small farm to recent trends in the diversification of small farms and their integration into modern globalized food chains. Several papers emphasize the link between agricultural policy development and the future of small farms.     

Economies of Scale and Inefficiency in County Extension Councils: A Case for Consolidation?

Current funding, mission, and organizational difficulties question the long-run survival of extension and the Land–Grant system. Consolidation of county extension offices is seen as a possible remedy for extension's problems. This paper estimates scale economies and inefficiencies in county extension offices in Kansas using parametric and nonparametric techniques. Large economies of scale and inefficiencies are found. Based on the empirical results, several simulations are performed to measure the short-run cost savings associated with consolidation. The results reveal that while all counties would experience significant savings from consolidating, rural and less populated counties would experience the greatest per unit savings.     

SPS and TBT agreements and international agricultural trade: retaliation or cooperation?

In this article, we investigate whether the Brazilian notifications to the TBT and SPS agreements are characterized as retaliation or as cooperation in international agricultural trade in the period 1996–2008. A Generalized Method of Moments (GMM) model is used to estimate game models of bilateral trade between Brazil and its major partners (United States, European Union, and Japan). From the viewpoint of strategic games, the results suggest that the Brazilian notifications are forms of retaliation against the United States, and, regarding the European Union, the best result for Brazil was conciliation. On the other hand, if the results are interpreted as equilibria of bargaining games, they suggest that Brazil has great bargaining power in trade with the United States and that cooperation characterized agricultural trade between Brazil and the European Union in the period analyzed. In the case of agricultural trade between Brazil and Japan, only Japan has characteristics of a country with significant bargaining power.     

A tipping point for agricultural expansion? Technological changes and capital accumulation in Argentina's rural sector

Drawing upon a case study located in central Argentina, we analyse in what ways technology is contributing to the accumulation of capital in a context where prevailing strategies resting on farm‐scale extension are no longer effective. We identify two major technological phases that go along with changes in actors' strategies aiming at re‐establishing expanded capital accumulation. These phases allow a better understanding of the mediating role of technology between capital accumulation and the appropriation of nature. In a context of increasing depletion of agro‐ecological conditions, the call for a new wave of innovations can be seen as an attempt to restore that mediating role. As we suggest, this entails broader changes in multiple levels.     

Rural decline or restructuring? Implications for sustainability transitions in rural China

With the increase in climate change and increasing social concerns about environmental deterioration, sustainability has become a hot topic in both natural and social research. Nowadays, sustainable cities are one of the focal points, while rural areas have been disregarded. In fact, rural areas have been suffering from environmental degradation for decades. Thus, sustainability transitions in both urban and rural areas should be given commensurate emphasis. In this paper, we provide an overview of rural evolution worldwide and attempt to explore alternative approaches for enhancing rural sustainability. As depicted in the literature, rural evolution is multifaceted. For a long time, depopulation and demographic aging have been like chronic diseases torturing rural areas. Although there were some bright spots of rural repopulation and economic restructuring, they were not mainstream of rural development. Based on the existing research, we established a conceptual framework and analyzed the rural evolution paradigm from a geographic perspective. We found that rural composition determined rural architecture, while rural architecture affected rural functioning. Changes in rural functioning formed the rural evolution trend. Since rural development was also influenced by external factors, both self-organization and governmental intervention were found to be alternative approaches to guiding rural transitions. We took the case study of Tengtou village to exemplify the sustainable pathways of a rural transition. The case study indicated that national policies were the fundamental impetus for rural transformation, while self-organization played a more important role. We hope that our study will shed new light on policy orientations and rural transitions.     

Grain marketing and National Competition Policy: Reform or Reaction?

Grain marketing arrangements in Australia have been controversial for many years. Following an account of the historical background to grain marketing, this article concentrates on more recent debates. The most interesting technical economic argument concerns the validity of claims that statutory marketing authorities with export monopoly powers can obtain higher prices. The article also discusses how marketing in Australia has been affected by Commonwealth and State Government policies with respect to microeconomic reform and privatization. Although major changes appear to have been made in grain marketing and its institutions, there are inherent economic problems with the current approach to deregulation.