A structural change analysis of the cost efficiency of farms in Scotland 1989-2008

One of the aims of the reform of the Common Agricultural Policy (CAP) is to increase the competitiveness of farmers through increasing their exposure to markets. An aspect of competitiveness is the gains in economic efficiency. Thus, the purpose of this paper is to estimate indicators of farm efficiency for the period 1989 to 2008 by farm type and to analyse what the effect on efficiency of changes in the CAP has been. In terms of the methodology, the information used comes from the Scottish Farm Account Scheme (FAS) survey, which allows us to assemble panel dataset and to construct cost efficiency indicators. The results indicate while mixed farms and lowland farms have maintain their levels of efficiency. LFA farms have seen their efficiency reduced since approximately 2004 or 2005 (especially LFA sheep farm specialists). Also, the analysis shows that there seems to be an increase in the dispersion of farmers in terms of efficiency for some farm types in periods of change in agricultural policy.Farm efficiency, stochastic cost frontier, Scottish agriculture, Agricultural and Food Policy, Farm Management, Land Economics/Use,

A STRUCTURAL CHANGE ANALYSIS OF THE COST EFFICIENCY OF FARMS IN SCOTLAND 1989-2008

One of the aims of the reform of the Common Agricultural Policy (CAP) is to increase the competitiveness of farmers through increasing their exposure to markets. An aspect of competitiveness is the gains in economic efficiency. Thus, the purpose of this paper is to estimate indicators of farm efficiency for the period 1989 to 2008 by farm type and to analyse what the effect on efficiency of changes in the CAP has been. In terms of the methodology, the information used comes from the Scottish Farm Account Scheme (FAS) survey, which allows us to assemble panel dataset and to construct cost efficiency indicators. The results indicate while mixed farms and lowland farms have maintain their levels of efficiency. LFA farms have seen their efficiency reduced since approximately 2004 or 2005 (especially LFA sheep farm specialists). Also, the analysis shows that there seems to be an increase in the dispersion of farmers in terms of efficiency for some farm types in periods of change in agricultural policy.Farm efficiency, stochastic cost frontier, Scottish agriculture, Farm Management,

Modelling Regional Agricultural Output Adjustments in Scotland in Response to CAP Reform

The purpose of the paper is to present an agricultural supply model for Scotland used to estimate regional changes in agricultural outputs due to the 2003 Common Agricultural Policy (CAP) reform. Supply functions were estimated for several farm types based on generalised trans-logarithmic multiproduct cost functions (Caves, Christensen and Tretheway, 1981). The data used for the estimation were an unbalanced panel dataset constructed using farm level data from the Scottish Government’s Farm Accounts Scheme (FAS) survey. Using the estimated supply adjustments, individual farm level responses to subsidy and price changes were aggregated using agricultural census weights to estimate the output changes for different regionsAgribusiness, Farm Management, Regional models, CAP reform, agricultural production econometrics,

Evaluation of approaches to control of Maedi-Visna disease of sheep using a Markov chain simulation model for a range of typical British Flocks

An epidemiological model is described that closely mimicked results of a published serological study of natural transmission of Maedi-Visna virus in a low ground flock of sheep. We adjusted parameters in the model from this baseline to explore the possible implications for the control of Maedi-Visna virus in typical British flocks. On closed hill farms, low probability of effective contact was most critical for control. In open low ground flocks, purchasing accredited replacements eliminated disease spread, otherwise flock size was the most important factor governing flock prevalence. Results highlighted the need for more epidemiological information about Maedi-Visna, particularly whether hill farms act as a hidden reservoir of virus or reduce the impact of this disease on the industry by providing a source of clean replacementsLivestock Production/Industries, Maedi-Visna, Model, Markov Chain, Sheep, Control,

Efficiency of Scottish Farms: A Stochastic Cost Frontier Analysis

In this paper the relative cost efficiency of Scottish farms is determined, and variables that explain this efficiency by farm type are identified and implications discussed. A panel dataset from the Farm Accounts Scheme (FAS) survey for the period 1997-2004 was used for the estimation. A cost efficiency indicator was measured using a fixed effect panel data regression. Further analysis, to explain the efficiency results, indicated the presence of important farm size and regional effects. However, other variables, whilst statistically significant, did not produce a consistent effect across the different farm types.Stochastic cost frontier analysis, cost efficiency, Scottish farms, Common Agricultural Policy, Farm Management, Q12,

Explaining Cost Efficiency of Scottish Farms: A Stochastic Frontier Analysis

In this paper the cost efficiency of Scottish farms is determined, variables that explain the relative cost efficiency by farm type are identified and implications discussed. A cost efficiency approach was selected as it can deal with farms producing multiple outputs (in contrast to production frontiers), and second because it can accommodate output constraints imposed by the Common Agricultural Policy (CAP). To estimate the stochastic cost frontier, a generalised multi-product translog cost function was estimated for five farm types: dairy, cereals and general cropping, cattle and sheep, specialist sheep and mixed farms. Eight farm outputs and four inputs were considered. The data for the estimation were drawn from the Farm Accounts Scheme (FAS) survey for the period 1997-2004, which allowed the construction of an unbalanced panel dataset for 358 farms. Cost efficiency was measured as a fixed effect term and this was used to construct an indicator of relative cost efficiency by farm type. Further analysis, to explain the efficiency results, indicated the presence of important farm size and regional effects. However, other variables used in the analysis, whilst statistically significant, did not produce a consistent effect across the different farm types.Stochastic cost frontier analysis, cost efficiency, Scottish farms, Common Agricultural Policy., Productivity Analysis, Farm Management,

EVALUATING EXTENSIVE SHEEP FARMING SYSTEMS

Data from each of 5 commercial, extensive sheep farms in Cumbria, UK were used as parameters in a linear program (LP) representing labour and grazing management in such farming systems. The LP maximised ewe enterprise gross margin subject to constraints dictated by the labour availability and land types on each farm. Under the assumptions used, labour availability and price restricted ewe numbers well below those observed in practice on 2 farms i.e. land resources were adequate for the farming system practiced. On two other farms stocking levels and hence returns were limited by the availability of forage and hence feed input prices relative to output. On one farm, greater grassland productivity was the key determinant of system performance. It was concluded that a holistic systems approach was needed to properly evaluate these farming systems in terms of their potential contribution to animal welfare, land use, profit and hence their sustainabilityLivestock Production/Industries, Extensive, Sheep, Economics, LP,

Impacts of labour on interactions between economics and animal welfare in extensive sheep farms

This study quantified interactions between animal welfare and farm profitability in British extensive sheep farming systems. Qualitative welfare assessment methodology was used to assess welfare from the animal's perspective in 20 commercial extensive sheep farms and to estimate labour demand for welfare, based on the assessed welfare scores using data collected from farm inventories. The estimated labour demand was then used as a coefficient in a linear program based model to establish the gross margin maximising farm management strategy for given farm situations, subject to constraints that reflected current resource limitations including labour supply. Regression analysis showed a significant relationship between the qualitative welfare assessment scores and labour supply on the inventoried farms but there was no significant relationship between current gross margin and assessed welfare scores. However, to meet the labour demand of the best welfare score, a reduction in flock size and in the average maximum farm gross margin was often required. These findings supported the hypothesis that trade-offs between animal welfare and farm profitability are necessary in providing maximum animal welfare via on-farm labour and sustainable British extensive sheep farming systems.Sheep, Labour, Animal Welfare, Linear Programme, Livestock Production/Industries, C6, Q10, Q19, Q57,