Dairy supply chain restructuring and its impact on farmers' revenues in Poland

Supply chain restructuring and its impact on farmers’ situation have become the subject of vast interest among agricultural economists. However, there have been relatively few studies trying to quantitatively asses this issue. This paper analyses the impact of supply chain modernisation on dairy farmers in Poland. It is shown that joining the modern marketing channel positively affects farmers’ revenues. The decision to enter the modern channel is crucially dependent on access to funds and facilitated by having larger cow herds.Supply chain, restructuring, dairy sector, Poland, Agribusiness, Livestock Production/Industries,

How do Farmers interact with Input Suppliers: Some Evidence from the Dairy Sector in Poland

The extensive and growing literature on food supply chain has been mainly focused on relations between farmers, processing and retail sectors. Various studies have investigated for example the determinants of supply chain relationships (e.g. Dries et al., 2014) and a situation of small-scale producers in the face of rapid supply chain restructuring (e.g. Briones, 2015; Vorley et al., 2007). However, a systematic understanding of how farmers interact with input suppliers is very scarce. In response to this, the paper aims at improving our knowledge about farmers’ relations with input suppliers.The specific example that we examine comes from the Polish dairy sector, which seems to be particularly well suited for investigating relationships within the food value chain. On the one hand, fragmented structure of local farms, and poor income situation of small agricultural holdings are frequently emphasised (Milczarek-Andrzejewska, 2014). On the other hand, Polish dairy and feed sectors have undergone a thorough modernisation (Dries et al., 2011; Piwowar 2013). Rising farmer demand (due to production technology change being necessitated by milk productivity improvement) and increased competition in the feed sector have led to new vertical relations between the farm and feed production segments. Vertical coordination took many forms, including contracting, advisory programs, financial support etc. However, the existing theoretical and empitical literature on vertical spillovers through backward linkages (i.e. from buyers to suppliers) is scarce and focused on manufacturing (Kuijpers, Swinnen, 2016; Jarzębowski, 2013).A study on the relationship between dairy farmers and feed producers means that we examine also the relations between two agri-food chains. These two – dairy and feed – supply chains are vertically connected. The feed supply chain ends at the farm level where the feed is finally used in the milk production process, and where the dairy supply chain starts. Our study allows then to characterize the “boundary” segments of supply chains

Impacts of Improved Animal Welfare Standards on Competitiveness of EU Animal Production

The paper presents results of the FP7 Econ-Welfare Project “Assessing the socio-economic consequences of measures promoting good animal welfare”. The paper illustrates the economic consequences at the farm level of indicative improvements in animal welfare conditions for pigs and cattle and addresses the consequences of improved animal welfare for international trade and competitiveness1. For the farm level considerations costs - effectiveness analysis was applied, whilst impacts of the upgraded standards on international trade and competitiveness was assessed with the use of the partial equilibrium Agmemod model. The Belief Network Approach was used to determine the effects of animal welfare standards and labels on the competitiveness of the EU animal production and supply chain.Introducing upgraded Animal Welfare standards at the farm level would increase costs of production in pigs and beef cattle sectors. In dairy sector upgrading cows welfare standards results with higher benefits than costs. Accordingly, Agmemod results indicate that on the pork and beef markets international competitive position of the EU producers may be undermined. However, as the analysis showed, there are both supply conditions and demand side circumstances which may well resolve the apparent conflict between animal welfare and chain competitiveness. On the supply side, it is apparent that there are some animal welfare improvements that can be made without compromising competitiveness. Supply chain information, education and training may well be able to improve both animal welfare and competitiveness. In addition, better understanding of both animal welfare and animal productivity (through R&D) can be expected to lead to improvements in both objectives

Are Short Food Supply Chains More Environmentally Sustainable than Long Chains?

Improving the eco-efficiency of food systems is one of the major global challenges faced by the modern world. Short food supply chains (SFSCs) are commonly regarded to be less harmful to the environment, among various reasons, due to their organizational distribution and thus the shortened physical distance between primary producers and final consumers. In this paper, we empirically test this hypothesis, by assessing and comparing the environmental impacts of short and long food supply chains. Based on the Life Cycle Assessment (LCA) approach, we calculate eco-efficiency indicators for nine types of food distribution chains. The analysis is performed on a sample of 428 short and long food supply chains from six European countries. Our results indicate that, on average, long food supply chains may generate less negative environmental impacts than short chains (in terms of fossil fuel energy consumption, pollution, and GHG emissions) per kg of a given product. The values of eco-efficiency indicators display a large variability across analyzed chains, and especially across different types of SFSCs. The analysis shows that the environmental impacts of the food distribution process are not only determined by the geographical distance between producer and consumer, but depend on numerous factors, including the supply chain infrastructure

Integrative Sustainability Analysis of European Pig Farms: Development of a Multi-Criteria Assessment Tool

Societal interest in all aspects of sustainability has increased. Therefore, pig farmers need to be aware of their strengths and weaknesses in all dimensions of sustainability: economy, environment, social wellbeing, and animal health and welfare. Our aim was to describe and critically discuss the development of a sustainability assessment tool for pig farms and to evaluate its suitability by applying it to 63 European pig farms (13 breeding, 27 breeding-to-finishing, and 23 finishing farms). The multi-criteria assessment tool was developed in several steps (the selection and scaling of indicators and their aggregation and weighting) in order to summarise the indicators into subtheme and theme scores. The indicators contributing the most to the subtheme/theme scores were identified and discussed in order to evaluate the procedure of the development. For example, some indicators, such as Ecological compensation area, Fairness of prices, and Tail docking, for which farms were scored low, were also identified as “real world problems” in other studies. For other sustainability aspects with low performance, the threshold might have been set too ambitiously, e.g., for Number of sows per annual working unit. Furthermore, to analyse the suitability of the tool, we assessed the best and worst median theme scores (good and poor performances) for each dimension, as well as the variability of the performances of the farms within the themes. Some themes were found to be moderate, such as Pig comfort, Biodiversity, or Resilience, whereas others were found to be good, e.g., Water and the Human–animal relationship, as well as several themes of the social wellbeing dimension. Overall, the sustainability tool provides a comprehensive assessment of the sustainability of pig production. Furthermore, this publication contributes to both the theory (development of a robust sustainability tool) and the practice (provision of a tool to assess and benchmark the sustainability on farms). As a next step, a sensitivity analysis should be performed, and the tool should be applied for further development

Integrative Sustainability Analysis of European Pig Farms: Development of a Multi-Criteria Assessment Tool

Societal interest in all aspects of sustainability has increased. Therefore, pig farmers need to be aware of their strengths and weaknesses in all dimensions of sustainability: economy, environment, social wellbeing, and animal health and welfare. Our aim was to describe and critically discuss the development of a sustainability assessment tool for pig farms and to evaluate its suitability by applying it to 63 European pig farms (13 breeding, 27 breeding-to-finishing, and 23 finishing farms). The multi-criteria assessment tool was developed in several steps (the selection and scaling of indicators and their aggregation and weighting) in order to summarise the indicators into subtheme and theme scores. The indicators contributing the most to the subtheme/theme scores were identified and discussed in order to evaluate the procedure of the development. For example, some indicators, such as Ecological compensation area, Fairness of prices, and Tail docking, for which farms were scored low, were also identified as “real world problems” in other studies. For other sustainability aspects with low performance, the threshold might have been set too ambitiously, e.g., for Number of sows per annual working unit. Furthermore, to analyse the suitability of the tool, we assessed the best and worst median theme scores (good and poor performances) for each dimension, as well as the variability of the performances of the farms within the themes. Some themes were found to be moderate, such as Pig comfort, Biodiversity, or Resilience, whereas others were found to be good, e.g., Water and the Human–animal relationship, as well as several themes of the social wellbeing dimension. Overall, the sustainability tool provides a comprehensive assessment of the sustainability of pig production. Furthermore, this publication contributes to both the theory (development of a robust sustainability tool) and the practice (provision of a tool to assess and benchmark the sustainability on farms). As a next step, a sensitivity analysis should be performed, and the tool should be applied for further development

Bayesian Belief Network approach in assessment of agricultural landscapes competitiveness

The study focuses on the relations between landscape structure and composition, functions and benefits, and its contribution to the regional competitiveness. The Bayesian Belief Network method has occurred to be useful for the analysis of the problem, however, the proper determination of the relationship between the variables in the model, requires a large number of observations based on the assessments of experts. It was found that all considered landscape elements (fields, forests, shelterbelts, and water reservoirs) have a positive influence on regional competitiveness and the potential of agricultural land. The strongest, positive impact on the competitiveness of the region have agricultural fields and pastures

POLICY IMPACT ON PRODUCTION STRUCTURE AND INCOME RISK ON POLISH DAIRY FARMS

Likely policy changes leading towards further liberalisation of the Common Agricultural Policy would certainly influence farmers’ income and revenue risks. Thus, a question arises both for farmers and for policy makers about possible effects and necessary adjustments that should be made to face such changes. The paper examines long-term impacts of changes of key policy factors on income risk in Polish dairy farms. Deterministic linear programming farm model was used to estimate farm incomes and likely changes in production pattern, while stochastic simulation farm model was applied for examining income risk. The main results of this model chain are optimal production structures for farm types modelled in a set of assumed policy conditions as well as farm income and its volatility. Comparison of model results across scenarios allows to state that increase of milk quota and reduction of direct payments significantly decrease farm incomes on dairy farms in Poland. Full liberalisation of the Common Agricultural Policy and withdrawal of direct payments results with even more radical negative income effects especially in the cluster of smaller milk producers. Simulation indicates significantly increased risk of achieving low farm incomes

Scenarios of the Common Agricultural Policy after 2020

The dynamic nature of changes in the macroeconomic environment and various views of Member States on the future of the Common Agricultural Policy in the European Union cause that its shape is usually a result of various forces and factors. They are both, exogenous, related to the situation on global markets, economic policy on a global scale and European Union, as well as endogenous, connected to the changes in the agricultural sector and its direct environment. The on going discussion revealed many controversies which will have an impact on the decisions shaping the CAP for the next budget perspective after 2020. The aim of this study is to critically review the evolution of agricultural policy and to identify possible scenarios for its changes in the new budgetary perspective after 2020. Before identifying possible scenarios of the future agricultural policy of the EU, the authors draw attention to some dilemmas such as: predicted increase in global demand for food, limiting production intensity in the EU, rationality of the level and allocation of support, problem of capitalization of subsidies in land prices, conflicting objectives of the CAP, diverse expectations of Member States, and consequences of Brexit for the CAP in the next budgetary perspective. Fundamental reforms of the CAP took place in the 1990s in response to international pressure and the results of GATT and later WTO negotiations. The current reform of the CAP must deal with other types of external forces, such as the crisis of the euro-zone, disintegration movements (Brexit) and integration in the euro-zone, the influx of emigrants, the threat of terrorism, as well as worsening effects of climate change. The authors, based on a literature review and their own reflections, present six possible scenarios for the development of the CAP after 2020. It is very likely that the shape of the future CAP will be the result of a political compromise between Member States, which may indicate that there will be no radical changes in the CAP in the next budgetary perspective. In the long run, agricultural policy will undergo further transformations, forced among others by the likely technological revolution facing the 21st century agriculture, demographic changes in the countryside, climate change or the need to support rural development, taking into account their diversity in the EU countries