Farm Level Capital: Capital positions, structures, the dynamics of farm level investments, capital accumulation and leverage positions

This paper aims to describe and highlight the key issues of farm capital structures, the dynamics of investments and accumulation of farm capital, and the financial leverage and borrowing rates on farms in selected European countries. Data collected from the Farm Account Data Network (FADN) suggest that the European farming sector uses quite different farm business strategies, capabilities to generate capital revenues, and segmented agricultural loan market regimes. Such diverse business strategies have substantial, and perhaps more substantial than expected, implications for the financial leverage and performance of farms. As an illustration, the financial risks clearly increased in the Danish agricultural sector with loan rates following an upward sloping trend in 2006; the first sign of the forthcoming financial crisis that may also severely hit highly leveraged agricultural firms. By using standard measures for farm assets and lending rates, we reveal that countries adopt different approaches to evaluating agricultural assets, or the agricultural asset markets simply differ substantially depending on the country in question. This has implications for most of the financial indicators. In those countries that have seen rapidly increasing asset prices at the margin, which were revised accordingly in the accounting systems for the whole stock of assets, firm values increased significantly, even though the firms had been disinvesting. If there is an asset price bubble and it bursts, there may be serious knock-on effects for some countries. The large variation in leverage positions and their substantial decrease over time raises new issues to be addressed in more analytical studies.

The Penetration of Financial Instability in Agricultural Credit and Leveraging

This paper describes the aggregate rural capital markets of the EU and the main differences between the markets of its member countries. The results of our study suggest that the agricultural credit markets are still quite segmented and the segments are country- rather than currency- or region-specific. Financial instability in Europe is also penetrating the agricultural sector and the variation of interest rates for agricultural credit is increasing across countries. Perhaps the most dramatic signal of growing financial instability is that the financial leverage (gearing rate) of European farms rose in 2008 by almost 4 percentage points, from 14 to 18%. The 4 percentage-point annual rise was twice the 2 percentage-point rise observed during the economic recession in the late 1980s and early 1990s. The distribution of the financial leverage of agriculture across countries does not, however, reflect the distribution of country-specific risk premiums in the manner that they are observed in government bond yields. Therefore, in those countries that have the weakest financial situation in the public sector and in which the bond markets are encumbered with high country-specific risk premiums, the agricultural sector is not directly exposed to a very large risk of increasing interest rates, since it is not so highly leveraged. For example in Greek and Spanish agriculture, the financial leverage (gearing) rate is only 0.6% and 2.2% respectively, while the highest gearing rates are found elsewhere (in Denmark), reaching 50%.

Asuntosijoituksen hankinta Espanjasta

Asunnon eli kiinteistön hankinta on aina iso päätös eikä sitä tulisi tehdä nopealla päätöksellä. Jopa suomessa on useita esimerkkejä kiinteistökaupan monimutkaisuudesta ja vaaratekijöistä. Luonnollisesti ulkomailla ja erityisesti Espanjassa riskit moninkertaistuvat. Tämän opinnäytetyön tarkoituksena on auttaa ihmistä, joka harkitsee asuntosijoituksen tekemistä Espanjaan minimoimaan riskinsä ja tarjoavan työkaluja, joilla sijoituksesta saadaan mahdollisimman kannattava eikä sitä tarvitse katua myöhemmin. Työssä esitetään kiinteistösijoittaminen sijoitusmuotona, tuodaan esille asuntosijoittamisen ominaispiirteet Espanjassa ja tutkitaan Barcelonaa sijoituskohteena. Opinnäytetyöni viitekehys koostuu teoria-osioista, joista ensimmäinen tarjoaa globaaleja yleispäteviä lainalaisuuksia siitä, mitä on Asuntosijoittaminen. Toisessa osiossa mennään syvemmälle Espanjan kiinteistömarkkinoille yleisesti sekä paikallisiin toimintatapoihin ja haasteisiin, joita yksityinen sijoittaja tulee kohtaamaan. Viimeisenä osana on tutkimus-osio. Siinä käymme läpi sijoituksen kannattavuuden mittaamista ja eri alueellisten vaihtoehtojen vertailemisesta, jossa painopiste on erityisesti Kataloniassa sijaitsevan Barcelonan alueen tutkimisessa. Espanjan toimintakulttuuri kiinteistökaupassa eroaa Suomen vastaavasta melko paljon. Espanjan kiinteistömarkkinat ovat edelleen poikkeuksellisen laajat, joten valinnanvaraa on runsaasti. On kuitenkin muistettava, että myös sudenkuoppia asunnonostajalle löytyy useita. Espanjassa kiinteistönvälittäjäksi voi ryhtyä olemattomilla tiedoilla. Oma viesti ei välttämättä mene perille mikäli ei hallitse espanjaa tai katalaania erityisen hyvin. Laittoman rakennuksen ostamisen vaara on aito. Barcelona on sijoituskohteena hyvin mielenkiintoinen. Tutkimuksessa selvisi, että yleisestä luulosta poiketen, talouskriisi on vaikuttanut myös isoihin kaupunkeihin selvästi. Asuntojen pyyntihintojen ja ostohintojen välillä on lähes poikkeuksetta isompi rako kuin esim. Suomessa. Hyvin alueen tuntevan, järkevän, kärsivällisen ja luotettavan suomalaisen kiinteistövälittäjän kanssa toimiva yksityinen sijoittaja löytää Barcelonasta itselleen varmasti kohtuullisesti tuottavan sijoitusasunnon.Property or acquisition of real estate is always a big decision and should not be a quick decision. Even in Finland, there are several examples of real estate market- ing and the complexity of the risk factors. Naturally abroad, especially in Spain the risks multiply. Purpose of this study is to help the person who is considering making an investment in housing in Spain to minimize the risks and to provide tools for investment, to make it as profitable as possible and not to regret it later. The goals of this thesis is to present real estate as a form of investment, to disclose Housing investment characteristics in Spain and research Barcelona as an invest- ment target. The thesis consists of a theoretical frame of reference-sections, first section provides a global universal points about what is Investment in housing. In the second section, we go deeper into the Spanish property market in general, as well as local practices and challenges that the private investor will face. The last section is a research-section of the measurement of profitability of the investment and the comparison of different regional options, which will focus particular in Barcelona, Catalunya area. Comparing Finnish and Spanish real estate culture it is fair to say that the differ- ence is quite big between these countries. Spanish real estate market is still exceptionally large, so there is plenty to choose from. It should be remembered that there are many pitfalls to be worried about as a home-buyer. In Spain you can start as a real estate agent with very low knowledge about the real estate business. If you don’t communicate with Spanish / Catalan language particularly well, your message may not reach its destination and there is a big possibility, that you are buying a building that is illegally constructed. Barcelona as an investment target is very interesting. The study revealed that deviate from the general believing, the economic crisis has also affected the big cit- ies clearly. In the housing announced prices and in the selling prices is almost al- ways a bigger gap than in Finland for example. With a reliable, patient and region knowledgeable Finnish real estate agent, a private investor can found reasonably profitable investment apartment

Farm level capital: capital positions, structures, the dynamics of farm level investments, capital accumulation and leverage positions

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Effects of Economic Factors on Adoption of Robotics and Consequences of Automation for Productivity Growth of Dairy Farms. Factor Markets Working Paper No. 32, December 2012

In the long term, productivity and especially productivity growth are necessary conditions for the survival of a farm. This paper focuses on the technology choice of a dairy farm, i.e. the choice between a conventional and an automatic milking system. Its aim is to reveal the extent to which economic rationality explains investing in new technology. The adoption of robotics is further linked to farm productivity to show how capital-intensive technology has affected the overall productivity of milk production. The empirical analysis applies a probit model and an extended Cobb-Douglas-type production function to a Finnish farm-level dataset for the years 2000–10. The results show that very few economic factors on a dairy farm or in its economic environment can be identified to affect the switch to automatic milking. Existing machinery capital and investment allowances are among the significant factors. The results also indicate that the probability of investing in robotics responds elastically to a change in investment aids: an increase of 1% in aid would generate an increase of 2% in the probability of investing. Despite the presence of non-economic incentives, the switch to robotic milking is proven to promote productivity development on dairy farms. No productivity growth is observed on farms that keep conventional milking systems, whereas farms with robotic milking have a growth rate of 8.1% per year. The mean rate for farms that switch to robotic milking is 7.0% per year. The results show great progress in productivity growth, with the average of the sector at around 2% per year during the past two decades. In conclusion, investments in new technology as well as investment aids to boost investments are needed in low-productivity areas where investments in new technology still have great potential to increase productivity, and thus profitability and competitiveness, in the long run

Farm-level Capital: Capital positions, structures, the dynamics of farm-level investments, capital accumulation and leverage positions. Factor Markets Working Paper No. 7, October 2011

This Factor Markets Working Paper describes and highlights the key issues of farm capital structures, the dynamics of investments and accumulation of farm capital, and the financial leverage and borrowing rates on farms in selected European countries. Data collected from the Farm Account Data Network (FADN) suggest that the European farming sector uses quite different farm business strategies, capabilities to generate capital revenues, and segmented agricultural loan market regimes. Such diverse business strategies have substantial, and perhaps more substantial than expected, implications for the financial leverage and performance of farms. Different countries adopt different approaches to evaluating agricultural assets, or the agricultural asset markets simply differ substantially depending on the country in question. This has implications for most of the financial indicators. In those countries that have seen rapidly increasing asset prices at the margin, which were revised accordingly in the accounting systems for the whole stock of assets, firm values increased significantly, even though the firms had been disinvesting. If there is an asset price bubble and it bursts, there may be serious knock-on effects for some countries

Anything left for animal disease insurance? A choice experiment approach

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SimCES platform for modular simulation : Featuring platform independence, container ecosystem, and development toolkit

Modular co-simulation contributes to both engineering and research, but the earlier solutions have lacked the combination of platform independence, loose coupling between the modules, and tools for straightforward development. This paper describes the simulation platform SimCES (Simulation Environment of Complex Energy System) that solves these issues with a microservice architecture, combining message-broker-based communication, containerization, and a development toolkit. The components can even communicate over Internet. Furthermore, there are developer tools that enable an easy start for developers with Python and Docker, but any external platform is possible too. SimCES is domain agnostic but stems from the energy domain.publishedVersionPeer reviewe