THE IMPACT OF MANURE PRODUCTION RIGHTS ON CAPITAL INVESTMENT IN THE DUTCH PIG SECTOR

In this paper the effect of manure production rights on investment decisions of Dutch pig farmers is examined. A dynamic optimization model of investment that explicitly takes zero investments into account is augmented by a constraint on production arising from the introduction of manure production rights. In the theoretical model it is shown that such a constraint has a reducing effect on investment. The presence of this constraint is tested for using GMM structural break tests. The results provide evidence for the hypothesis that manure production rights have reduced investments through its effect on production.Investment, manure production rights, Euler equation, GMM, structural break testing, panel data, pig farms, Livestock Production/Industries,

Evaluating Different Growth Scenarios for Organic Farming Using Bayesian Techniques

Different views exist on the future development of organic agriculture. The Dutch government believes that in 2010 10% of the farm land will be used for organic farming. Others have a more radical view: due to increasing emphasis on sustainable production in the end all farming will be organic. Others believe in a more pessimistic scenario in which the recent growth in organic was just a temporary upswing and that the share of organic farmers already reached its maximum. In this paper different potential scenarios for the further growth of organic farming are evaluated using Bayesian techniques. A nonlinear logistic growth model explaining the share of organic farms is estimated using available historical data for Dutch agriculture. Various scenarios imply different prior values for the parameters. Because of the non-linear model specification a Metropolis-Hastings algorithm is used to simulate the posterior densities of the model parameters. Finally, using Bayesian model comparison techniques probabilities can be attached to the different scenarios. The proposed methodology is a promising tool for analysing technology diffusion in general when different scenarios for diffusion are possible and limited data is available.Organic farming, Bayesian analysis, non-linear logistic growth curves, Farm Management,

Farm-Specific Factors Affecting the Choice Between Conventional and Organic Dairy Farming

Organic dairy farming in the Netherlands is a growing sector. This paper investigates the impact of a number of economic and farm-specific variables on the choice between conventional and organic farming. Based on expected utility maximisation, a theoretical framework is developed that explicitly accounts for the impact of non-economics variables like age and education level and unobserved characteristics. The model is estimated with an unbalanced panel of Dutch dairy farms using a random effects probit specification.organic dairy farming, expected utility maximisation, technology choice, farmspecific variables, random effects probit model, Livestock Production/Industries,

Farm Size and the Share of Irrigated Land in total Landholding: the case of Water-Harvesting Irrigation in Ethiopia

Rain-fall shortage constrains production in small-holder agriculture in developing countries and with ongoing climate change these shortages may increase. Rain-water harvesting are interesting technologies that decrease this risk. Therefore, one would expect an increasing use of these technologies in drought-prone areas. However, data collected in Ethiopia shows that the share of irrigated land in total landholding declines with farm size. This study investigates why the share declines with farm size using panel data collected in 2005 and in 2010. A random-effect tobit model is estimated for the share of irrigated land as a function of variables affecting returns, market prices, source of finance and expectation formation. The findings show farm-specific factors such as credit per hectare, distance to market, ease of selling output, landholding, regional differences, aridity and distance of plots from natural water sources significantly affect the share. Thus, encouraging investment has to consider farm-size, and also geographical, environmental and regional diversity

Bargaining and market power in a GIS-based hedonic pricing model of the agricultural land market

Agricultural land markets differ greatly from the textbook-case of perfect competition. This is why standard hedonic pricing techniques should be revised before applying this technique to this market. The objective of this paper is to determine (a) the deviation from the competitive market price of agricultural land in the Netherlands due to market power and the existence of an excess surplus and (b) the effect of bargaining power on the division of excess surplus between the eventual seller and the buyer in the market for agricultural land.Land Economics/Use,

Joint-liability borrowing decisions under risk: Empirical evidence from rural microfinance in Ethiopia

This paper investigates borrowing decisions of rural households from a microfinance in Tigray, Ethiopia using household panel data on 5 years and a dynamic panel probit model. The theoretical model takes two types of risk involved in joint-liability lending explicitly into account: risk of partner failure and the risk of losing future access to credit. Empirical results show that these risks are important in explaining borrowing decisions. Another finding is that the probability of repeat-borrowing is higher than the probability of new participation, with possible implications that perceived joint-liability threats deter participation and easing stringent punishments might help poor households’ access to credit.Microfinance, risk, dynamic panel probit, Financial Economics,

Stimulating Organic Farming Via Public Services and an Auction-Based Subsidy

In order to stimulate organic farming governments generally use a mix of temporary hectare payments and provision of public services for stimulating the development of the organic sector. In this paper a conceptual model is developed for determining a socially optimal hectare payment for any given level of public services. Farm heterogeneity, due to the variability of soil quality and management skills, is explicitly taken into account. Using an n-th price auction mechanism farmers indicate what their reservation subsidy is for a given level of public input provision. The outcome of this problem is utilized in the government's optimization problem. We found that the level of per hectare socially optimal subsidy increases significantly with the elasticity of the social welfare function and decreases significantly with the degree of farmers' heterogeneity in suitability of growing organic crops (OC) as well as with the level of complementary governmental services. The total area planted for OC is also quite sensitive to these parameters. The effects of the deadweight loss parameter and the degree of risk aversion on per hectare subsidy and on total organic acreage are relatively small.auctions, organic farming, policy mix, Agricultural and Food Policy, Q28, Q12,

Farm Size and the Share of Irrigated Land in total Landholding: the case of Water-Harvesting Irrigation in Ethiopia

Rain-fall shortage constrains production in small-holder agriculture in developing countries and with ongoing climate change these shortages may increase. Rain-water harvesting are interesting technologies that decrease this risk. Therefore, one would expect an increasing use of these technologies in drought-prone areas. However, data collected in Ethiopia shows that the share of irrigated land in total landholding declines with farm size. This study investigates why the share declines with farm size using panel data collected in 2005 and in 2010. A random-effect tobit model is estimated for the share of irrigated land as a function of variables affecting returns, market prices, source of finance and expectation formation. The findings show farm-specific factors such as credit per hectare, distance to market, ease of selling output, landholding, regional differences, aridity and distance of plots from natural water sources significantly affect the share. Thus, encouraging investment has to consider farm-size, and also geographical, environmental and regional diversity.Land Economics/Use, Resource /Energy Economics and Policy,

THE GROWTH IN ORGANIC AGRICULTURE: TEMPORARY SHIFT OR STRUCTURAL CHANGE?

This paper investigates the growth in the number of organic producers in the Netherlands. Using Bayesian techniques a logistic growth model explaining the share of organic farms is estimated. Prior information is used to estimate and compare three different models on the future of organic farming.Farm Management,

Pluriactivity in Italian Agriculture: Are Farmers Using Interlinked Strategies?

Farm Management,