Flexible quota constraints in positive mathematical programming models

To explain over- and underuse of available quota, Buysse et al. (2007) have integrated the shadow cost of the quota constraint in a quota flexibility function in a positive mathematical programming model. This method and central hypothesis, formulated and tested for the case of Belgian sugar beet farms, is in current paper extended and confirmed for the cases of Flemish dairy quota and manure emission rights. Despite the different organisation, objectives and implementations of the diverse quota systems, the results are similar. A higher utilisation of quota is significantly driven by the quota rent, but farm characteristics are also important and the effect declines with increasing quota rent. Regardless the quota, the dairy quota flexibility behaviour of the sample of Flemish farms results in an output price elasticity of 0.6%. The quota flexibility functions can be used for policy analysis, model sophistication and farm advisory instrument.Quota, flexibility, Positive Mathematical Programming, farm model, Common Agricultural Policy, Agricultural and Food Policy, Demand and Price Analysis, Research Methods/ Statistical Methods,

Fertilization: trade-offs between manure abatement and plant productivity

In 2005, 30% of the Flemish farms faced a manure excess, while at aggregated level still 9.7% of the emission rights were unused. This means that, despite the various possibilities, Flemish farmers do not succeed in an effective exchange of manure between farms. In current paper is shown how inorganic fertilizer use influences the use and exchange of organic nitrogen. Because of the mutual interdependency between organic and inorganic nitrogen emission rights (or quota), inorganic nitrogen use limits the emission rights for organic nitrogen. Utilisation of these emission rights are analysed as a trade-offs choice between plant productivity (use of inorganic nitrogen) and manure disposal, as the major abatement alternative of manure production. Farmers still prefer inorganic fertilizers because of their effect on plant productivity and income. However, by changing the quota rent of organic nitrogen, the fertilization behaviour can be influenced. A higher quota rent of organic nitrogen would increase the use of manure. This trade-off behaviour seriously influences effectiveness of policies. When the objective is to lower the total nitrogen use, a mere reduction of organic quota can partially be counteracted by a higher inorganic nitrogen use. When the objective is to better spread the manure, increasing the quota rent for deficit farms will increase their acceptance of manure.manure abatement, nutrient emission rights, Tobit model, Crop Production/Industries,

A FARM LEVEL ANALYSIS OF THE RELATION BETWEEN CAP REFORMS AND LOCAL ENVIRONMENTAL LEGISLATIONS: HOW AND IN WHICH EXTENT FLEMISH DAIRY FARMERS CAN FILL UP EXTRA MILK QUOTA?

The agricultural policies shift gradually from EU-level organised market interventions to local organised environmental policies. This paper explores the growth possibilities of the Flemish dairy sector with the outlook of a quota abolishment as a case study of this policy shift. The dairy quota policy seems very restrictive for the highly profitable Flemish dairy sector, but the environmental restrictions from the manure regulation can limit the growth of the dairy sector as well. The paper uses a spatial multi-agent simulation model applied to a sample of 40.000 farms to estimate price development of emission rights and their possible impact on the growth of the dairy production. The results show that a higher milk production leads to higher prices for emission rights. However, the increased cost of manure emission rights is not expected to impede dairy farm growth because the current milk quota rent estimates go far beyond the cost of manure emission rights.milk quota, manure emission rights, mathematical programming, Flanders, Agricultural and Food Policy, Industrial Organization, Research Methods/ Statistical Methods, C02, C61, L11, Q18,

Derogation on the EU Nitrates Directive: does it make a difference?

The paper discusses an ex ante evaluation of the derogation on the Nitrates Directive for Flanders, Belgium, which is a case of intensive but highly productive livestock areas. The aim is to develop an accurate simulation model to detect small differences in manure surpluses caused by changes of manure production and/or utilization. The system of models consists of various modules to fine tune the calculations of manure production, fertilizing behaviour and manure allocation and disposal on and off farm. The results show that derogation may cause the existing manure surpluses to expire, if only nitrogen limits are considered and no transactions costs are taken into account. When also phosphate fertilization limits are considered, the increase in manuring possibilities is much lower than expected. Ongoing research focuses on the marginal shifts in manure surplus at farm level and possible effects of transactions costs.Nitrates Directive, derogation, modelling, Environmental Economics and Policy, Livestock Production/Industries,

Effects of a flat rate introduction: shifts in farm activity and impact on farmers' income

Current thoughts on CAP changes, e.g. the "Health Check", emphasize the necessity to move away from payments based on historical receipts towards a "flatter rate" system. The aim of current research is to simulate the impact of a flat rate system (equal payments per hectare of cultivated land) compared to the current historical system (payments based on individual historic entitlements). Impact on production and income of arable, dairy and cattle farms of two different flat rate scenario's, is assessed with a farm-based sector model for Flanders. The model maximizes income at farm level, calibrated to observed farming behavior in 2001-2003. Farm data can be selected by farm type, size and region, simulations could be run for specific sub sectors, size classes or regions. In the two simulated flat rate scenario's subsectors will gain subsidies at the expense of other subsectors. However, farms can compensate a substantial part of their income loss by changing activity choice.Positive Mathematical Programming, farm model, Common Agricultural Policy, Payment Entitlements., Agricultural and Food Policy, Agricultural Finance, Farm Management, Research Methods/ Statistical Methods,

Nurturing agroforestry systems in Flanders : analysis from an agricultural innovation systems perspective

The shift to industrial agriculture in Europe brought along a range of environmental and social externalities. This led policy makers, researchers and civil servants to consider and explore the potential of diversified farming systems (DFS) to address current problems in agriculture. However, because of multiple obstacles adoption of these DFS by farmers is not obvious. In this study we investigate the case of agroforestry (AF) systems in Flanders, where a government incentive scheme initiated in 2011, did not lead to the expected uptake of AF systems by farmers. To understand this implementation gap and the role of the different relevant actors herein, we used the Agricultural Innovation System concept ensuring an integrative and holistic analysis. Through 25 interviews, 2 focus groups and document analysis, a set of qualitative data was gathered and analyzed. This revealed five sets of challenges, which are of a technical, financial, legal, organizational and social nature. For each of these challenges development pathways were formulated to further upscale AF adoption. Although they should be substantiated and fine-tuned through further research, they put forward the importance of (1) investing in research to improve the compatibility and labor productivity of AF systems, (2) engaging private and societal actors in niche markets for agroecological products, (3) developing a full-fledged legal landscape and an effective incentive program, (4) using different communication and education channels to familiarize actors with agroecological practices, and (5) strengthening the dialogue between influential groups.SCOPUS: ar.jinfo:eu-repo/semantics/publishe

How to support strategic choices for sustainable farming?

C

Six steps to design your on-farm demonstrations (FarmDemo Tutorial 1/3)

Presentation of the FarmDemo Design Guide. Presenter: Anke Beermann, FiBL Switzerland With contributions of: Lies Debruyne, ILVO, Belgium Jendrik Holthusen, Grünlandzentrum, Germany Tom O'Dwyer, Teagasc, Ireland Richard Lloyd, Innovation for Agriculture, U

Chain Governance Systems and Sustainable Capital Use – A Conceptual Approach

Due to pressures such as climate change, globalization, price volatility and scarcity of natural resources, our agri-food chain is urged to make a transition towards more sustainable production. How to organize such a transition, given the various stakeholders involved, and how to monitor progress still remain important challenges. This paper presents a new conceptual framework that follows an integrated chain approach to help address these challenges. First, it tackles the complex ecological and socio-economic challenges along the chain and its members (agriculture and food industries), and second, allows for decision support to chain members and policy. This framework combines two existing theoretical frameworks. The first framework is global chain value analysis (GCVA) of Gereffi (2005) which has its roots in institutional economics. GCVA categorizes five governance types of value chains (markets – modular – relational – captive – hierarchy) based on three variables: (i) the complexity of information and knowledge transfer required to sustain a particular transaction, (ii) the ability to regulate transactions, and (iii) the capabilities of actual and potential suppliers. The second framework, which was first formulated in ecological economics, extends the set of traditional economic resources to various forms of capital in the production system. These are natural (land, water, …), manufactured (buildings, machinery, ...), human (labour, skills,…), and social capital (networks,…). The economic system is fully embedded in the social system which in turn is embedded within the finite ecological system. Throughput of natural, social, human, and manufactured capital allows for the description of agri-food systems in terms of the maximal sustainable use of their stocks and flows. These two frameworks can be combined to perform an integrated system analysis of the agri-food chain, including the governance structures and the boundary conditions for the various types of capital. This paper describes this new conceptual framework illustrated by means of a case study of the agri-food chain in Flanders, Belgium