Does Gibrat's law hold amongst dairy farmers in Northern Ireland?

We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 financial crisis. In addition to widely used VaR and ES models, we also study the behavior of conditional and unconditional extreme value (EV) models to generate 99 percent confidence level estimates as well as developing a new loss function that relates tail losses to ES forecasts. Backtesting results show that only our proposed new hybrid and Extreme Value (EV)-based VaR models provide adequate protection in both developed and emerging markets, but that the hybrid approach does this at a significantly lower cost in capital reserves. In ES estimation the hybrid model yields the smallest error statistics surpassing even the EV models, especially in the developed markets

Does Gibrat's Law Hold Amongst Dairy Farmers in Northern Ireland?

This paper tests whether the Law of Proportionate Effects (Gibrat, 1931), which states that farms grow at a rate that is independent of their size, holds for the dairy farms in Northern Ireland. Previous studies have tended to concentrate on testing whether the law holds for all farms. The methodology used in this study permits investigation of whether the law holds for some farms or all farms according to their size. The approach used avoids the subjective splitting of samples, which tends to bias results. The finding shows that the Gibrat law does hold except in the case of small farms. This is in accordance with previous findings that Gibrat's law tends to hold when only larger farms are considered, but tends to fail when smaller farms are included in the analysis. Implications and further extensions, as well as some alternatives to the proposed methodology are discussed.Gibrat's law, quantile regression, sample selection bias, Integrated Conditional Moments test, Agricultural and Food Policy, C12, C14, O49, Q19,

“Waiting for Godot”- Restructuring on Small Family Farms

This paper examines the extent to which favourable off-farm labour market conditions coupled with growth in land values have contributed to the observed resilience of small scale family farms. We use data from Northern Ireland and employ farm household optimisation models to analyse household decision making processes that contribute to the observed inertia in farm structure. The analysis indicates that farm household behaviour is influenced not just by current farm income, but also expected capital asset returns. Increased wealth, associated with continuing land ownership, gives rise to the proposition that the link between off-farm incomes, increased land values and remaining in farming may be associated with farmers pursuing wealth maximizing objectives, whilst still maintaining a rural way of life. Alongside increased wealth through land ownership the farm household model quantifies the importance of off-farm income removing the pressure from farming income to fund all family consumption needs. This enables households to sustain low-income farming activities in order to pursue other objectives such as wealth management (including tax efficient transfer of wealth) and lifestyle. Consequently, the results indicate that the survival of small-scale family farms may be much less sensitive to agricultural support policies than has been commonly suggested. In an extension that explores the effects of the recent economic turbulence due to the ‘credit crunch’ we find that the households remain resilient even when subjected to a protracted period of reduced off-farm employment.Farm households, resilience, wealth accumulation, off-farm income, Consumer/Household Economics, Productivity Analysis, C61, Q12,

The Long-run Impact of Different Exchange Rates on the Projected Agricultural Income of an Export Dependent Region of the UK.

This paper evaluates the effects of different exchange rate scenarios on projections for agricultural incomes and prices in a small highly export dependent region, NI. The modelling system used in the analysis is designed to capture the complexities of the relationship between exchange rates and agricultural prices and incomes. The system models not only the main agricultural sectors in NI but also the demand for and supply of agricultural commodities in the EU and beyond. This is important, given that NI is a price taker and the EU is the main export destination for its agricultural production. The analysis serves to underline the importance of exchange rates for the NI agricultural economy. When the euro is weak against sterling then agricultural sector incomes are substantially lower than when the euro is strong against sterling. Approximately, a one per cent weakening/strengthening of the euro against sterling is projected to reduce/increase aggregate net receipts in the dairy, beef and sheep sectors by one per cent. This means that exchange rate movements, which are outside the control of the agricultural community, have a dramatic affect on agricultural incomes in NI. This conclusion should be considered against the backdrop of a 28% drop (approx.) in the value of the euro against the pound that has occurred since 1995. The impact of exchange rate movements on producer prices appears to be less pronounced.

Do EU direct payments to beef producers belong in the ‘blue box’?

In the Uruguay Round Agreement on Agriculture, so-called ‘blue box’ support measures were exempted from reduction commitments, provided they were delivered under ‘production-limiting’ programs. Although classified as ‘blue box’, the EU system of direct payments (DP) to beef farmers imposes ‘claim-limiting’ restrictions rather than ‘production-limiting’ restrictions, allowing farmers to keep additional animals over and above the number upon which they are eligible to claim DP. The present paper provides empirical evidence that EU direct payments capitalise into the market prices of male calves and young steers in Ireland. It is also likely that DP capitalises into the prices of beef cows and heifers. Given this capitalisation process, some farmers can obtain ‘capitalised’ DP on animals produced over and above the ‘claim-limiting’ restrictions, by selling these animals through auction markets. Thus, ‘capitalised’ DP probably encourages production over and above the limiting measures.Agricultural and Food Policy, Livestock Production/Industries,

A Stochastic Analysis of the Impact of Volatile World Agricultural Prices on European and UK Agriculture

Successive Common Agricultural Policy (CAP) reforms and trade liberalisation have led to a more market-orientated European agricultural sector, with EU commodity prices now more closely linked to world prices. As a consequence EU prices have become more volatile. Greater price volatility increases uncertainty and raises fresh challenges for projections of policy impacts in the EU. To take account of world price volatility stochastic modelling has been applied to the FAPRI-EU partial equilibrium model, which includes a UK modelling system. Stochastic modelling provides a means to capture some of the inherent uncertainty associated with agricultural production systems. By varying assumptions about certain exogenous variables, stochastic models can be used to examine the different ways markets may behave. Variable world prices are incorporated within the EU GOLD model. This process identifies the impact of a stochastic distribution of world prices on EU agriculture rather than the single point estimates in the conventional deterministic approach. The results outlined in this study demonstrate the impact of volatile world prices on EU and, in particular, UK prices and market control instrumentsAgricultural policy, Stochastic modelling, Agricultural and Food Policy,

Generational sub-cultures

The objective of this study was to determine (1) if there is a difference between Baby Boomers, Generation X and Generation Y employees’ perceptions of organisational culture and if so, (2) to determine if generational sub-cultures are formed within an organisation as a result of these different perceptions. A quantitative research design was chosen, and employees (n = 455) in a large South African information and communication technologies (ICT) sector company, selected through proportionate, random, stratified sampling, completed the South African Culture Instrument (SACI). Descriptive and inferential statistics were used to analyse the data, and the results of this study indicate that generational sub-cultures can be identified in the organisation, based on significantly different perceptions of five of the seven dimensions of organisational culture examined. This study therefore contributes to the body of knowledge on organisational culture and the formation of sub-cultures at a generational level and can be used to enhance organisational talent and management strategies.Industrial and Organisational PsychologyM.Com. (Industrial and Organisational Psychology

Impact of the abolition of EU Milk quotas on Agriculture in the UK

In recent years the CAP has undergone significant reforms, but the dairy sector has largely avoided wholesale changes. The sector, however, is now faced with a significant effort by the Commission to instigate reform. In this study the FAPRI-UK modelling system is simulated to identify the impact of abolishing or phasing out EU milk quotas on the dairy sector in the UK and the results are compared against a 2007 Baseline projection (2007--2016). The results demonstrate that although the impact of the abolition of dairy quotas is fairly modest at the EU-25 level, significant impacts are apparent at the individual country level.Milk Quotas, CAP Reform, Commodity Modelling, Agricultural and Food Policy, International Relations/Trade, Livestock Production/Industries,

A Geographically-Restricted but Prevalent Mycobacterium tuberculosis Strain Identified in the West Midlands Region of the UK between 1995 and 2008

Background: We describe the identification of, and risk factors for, the single most prevalent Mycobacterium tuberculosis strain in the West Midlands region of the UK.Methodology/Principal Findings: Prospective 15-locus MIRU-VNTR genotyping of all M. tuberculosis isolates in the West Midlands between 2004 and 2008 was undertaken. Two retrospective epidemiological investigations were also undertaken using univariable and multivariable logistic regression analysis. The first study of all TB patients in the West Midlands between 2004 and 2008 identified a single prevalent strain in each of the study years (total 155/3,056 (5%) isolates). This prevalent MIRU-VNTR profile (32333 2432515314 434443183) remained clustered after typing with an additional 9-loci MIRU-VNTR and spoligotyping. The majority of these patients (122/155, 79%) resided in three major cities located within a 40 km radius. From the apparent geographical restriction, we have named this the "Mercian" strain. A multivariate analysis of all TB patients in the West Midlands identified that infection with a Mercian strain was significantly associated with being UK-born (OR = 9.03, 95% CI = 4.56-17.87, p 65 years old (OR = 0.25, 95% CI = 0.09-0.67, p < 0.01). A second more detailed investigation analyzed a cohort of 82 patients resident in Wolverhampton between 2003 and 2006. A significant association with being born in the UK remained after a multivariate analysis (OR = 9.68, 95% CI = 2.00-46.78, p < 0.01) and excess alcohol intake and cannabis use (OR = 6.26, 95% CI = 1.45-27.02, p = .01) were observed as social risk factors for infection.Conclusions/Significance: The continued consistent presence of the Mercian strain suggests ongoing community transmission. Whilst significant associations have been found, there may be other common risk factors yet to be identified. Future investigations should focus on targeting the relevant risk groups and elucidating the biological factors that mediate continued transmission of this strain