Analysis of the Competitiveness of Cereal Production in Selected EU Countries

This paper examines the competitiveness of cereal production in selected EU member states, during the period 1996 2000. Profitability was selected as a measure of competitive performance and costs of production, value of output and partial productivity indicators were examined as possible sources (potential) of competitive performance. Using data from the Farm Accountancy Data Network (FADN) the analysis showed that productivity levels in the UK, Ireland and France were consistently higher then competing countries Denmark, Germany and Italy. In terms of profitability, the opportunity cost of owned resources had a major impact on the competitiveness of cereal production within the EU. Cash costs as a percentage of total output were lowest in Italy but in terms of total economic costs, including an opportunity cost for all owned resources, Italy had the highest cost structure amongst the countries examine. These findings have implications for EU cereal producers in the medium term as direct payments are decoupled from production and producers must make production decisions based on full economic costs of production, including adequate remuneration for owned resources.competitiveness, cereal production, profitability, competitive performance, competitive potential, Production Economics, Q12,

The Role of Risk in the Decision to Produce Post-Decoupling - A Stochastic Budgeting Example

Under the Mac Sharry and Agenda 2000 reforms, direct payments comprised a significant portion of farmers' income in the EU. Farmers had to engage in production to receive these payments but the payments were relatively risk-free and therefore risk may not have played an important role in the production decision. This paper considers the effect of the decoupling of direct payments from production in the EU and in particular, on the role of production risk in the decision making process. In an environment where direct payments are completely decoupled from production, farmers may engage in an 'entitlement farming' system, that is retain their land only to activate the decoupled payment and not actually produce any tangible goods. This paper examines the effect of production risk on the economic trade off between 'entitlement farming' and conventional farming. A stochastic budgeting model is developed for two representative farms. The model is used to measure the probability that the returns to the 'entitlement farming' system could be higher than the profit emanating from a conventional farming system given production risk. The results show that for the less efficient representative farm, the probability of achieving a significantly higher profit by engaging in entitlement farming is 46 percent, while further analysis shows that there is a 9 percent probability that profits from conventional farming systems would be only marginally higher than the 'entitlement farming' option.Decoupling, Risk Analysis, Production Risk, Decision Analysis, Stochastic Modelling, Agricultural and Food Policy, Risk and Uncertainty, Q12, Q18,

Foot-and-Mouth Disease control costs compared: An Irish case study.

The primary objective of this paper is to evaluate alternative control strategies for a number of simulated outbreaks of Foot-and-Mouth Disease (FMD) in four agriculturally diverse Irish regions, examining for the first time, the potential role of emergency vaccination in the country. The recent EU Directive (2003/85/EC) on FMD control permits the use of emergency vaccination as part of an FMD control strategy. While the slaughter of infected animals and dangerous contacts (susceptible animals on epidemiologically linked holdings) remains the principal tool for tackling an outbreak, the potential use of vaccination as an adjunct to the basic culling policy is now being considered. Using an integrated approach, combining epidemiological and economic modules, the alternatives of stamping-out both alone and in conjunction with emergency vaccination are examined using hypothetical outbreaks and their control costs compared. Overall, it cannot be said, a priori, that one control option is better than the other. Choice of control strategy would appear to be highly dependent on herd density, production type and other region specific issues. This analysis has focused on control costs only; taking wider economy costs into account may however change this overall conclusion.Foot-and-Mouth disease, alternative control strategies, transboundary animal diseases, emergency vaccination, Livestock Production/Industries, Q1, Q17, Q58,

An investigation into the impact of policy reform on the level of structural change in the agri-food sector of Ireland, Denmark and the Netherlands

This paper conducts a detailed, micro-focused investigation on the implications of recent agricultural policy changes on the structure of production systems in Ireland, Denmark and the Netherlands in terms of farm numbers, system switching, specialisation, the role of economies of scale, on-farm investment, off-farm employment and economic viability. Given the close relationship between farm structure and agricultural production, the impact of the recent CAP reform on production decisions should give a good indication of the form agricultural structural change will take. Two competing hypotheses of post decoupling structural change are proposed; a ‘production inducing effect’ and an ‘expectations effect’. Using Irish, Danish and Dutch micro-data, which are comparable due to their participation in FADN, a descriptive analysis of the key characteristics of production in the agri-food sectors in each country will be performed using key indicators of structural change. The results indicate that the ‘expectations effect’, which claims that producers may adopt a ‘safety first’ strategy and make only minimal changes to production plans in case future payments are reassessed and re-linked to production or an agricultural activity, seems to be prevalent.Policy Reform, Agricultural Structural Change, FADN, Agricultural and Food Policy, Farm Management,

The economic viability of biomass crops versus conventional agricultural systems and its potential impact on farm incomes in Ireland

Ireland is currently importing 90 percent of its energy. The burning of domestically produced nonrenewable peat provides 4.9 percent of Ireland’s total primary energy supply while renewable biomass crops currently account for only 1 percent of the domestically produced energy supply. The Irish government have set a target of 30% of peat (approximately 0.9 million tonnes) used for electricity generation to be replaced by renewable energy crops. This would be equivalent to approximately 0.6 million tonnes of biomass crops or approximately 45,000 hectares of biomass. Direct payments and subsidies accounted for over 100 percent of average family farm income on beef and sheep farms in 2006. Therefore there appears to be significant potential for Irish farmers to replace conventional agricultural enterprises with biomass crops. A probit model was built to identify the socio-economic characteristics of farmers who may be willing to adopt energy crop production. The results from this were used in the construction of a linear programming model to determine the optimal enterprise for each farmer at varying energy prices.Willow, Miscanthus, Co-firing, Net present value, Probit, Linear programming, Agricultural Finance, Institutional and Behavioral Economics, Resource /Energy Economics and Policy,

Productivity and the Determinants of Efficiency in Irish Agriculture (1996-2006)

The competitiveness and productivity of Irish agriculture has been at the forefront of debate in recent times given successive and impending changes to agricultural policy. This paper examines the trend in total factor productivity in Irish agriculture over the recent past and explores the effects of specific variables on relative efficiency levels. The findings of this research have shown that productivity growth was highest in the Cattle Rearing sector followed by the Dairy, Cattle Finishing, Sheep and Cereals sectors during the period 1996 to 2006. The research has also shown that efficiency levels are, in general, positively correlated with extension use soil quality, the overall size of the farm, the level of intensification and the level of specialisation. The use of artificial insemination was also positively correlated with efficiency in the Dairy sectorProduction Economics,

Defining the Costs of an Outbreak of Karnal Bunt of Wheat

In determining the economic impact of a possible outbreak of the quarantinable wheat disease Karnal Bunt, an examination was made of the detailed components of the costs involved. The costs were classified as: (a) Direct costs (yield and quality losses); (b) Reaction costs (export bans, quality down-grading, seed industry costs); and (c) Control costs (quarantine zones, fungicides, spore destruction). The relative importance of each of these cost components is measured for a hypothetical outbreak of Karnal Bunt in the European Union, as a means of ensuring that the policy responses to such an outbreak are appropriate considering the costs involved.disease, quarantine, cost, wheat, Agricultural and Food Policy, Crop Production/Industries,

Valuing the risk associated with willow and miscanthus relative to conventional agricultural systems

The agronomic characteristics of willow and miscanthus make these crops highly susceptible to risk. This is particularly true in a country such as Ireland which has limited experience in the production of these crops. Issues such as soil and climate suitability have as yet to be resolved. The lengthy production lifespan of energy crops only serve to heighten the level of risk that affects key variables. The uncertainty surrounding the risk variables involved in producing willow and miscanthus, such as the annual yield level and the energy price, make it difficult to accurately calculate the returns of such a project. The returns from willow and miscanthus are compared with those of conventional agricultural enterprises using Stochastic Efficiency with Respect to a Function (SERF). A risk premium is calculated which farmers would need to be compensated with in order for them to be indifferent between their current enterprise and switching to biomass crop production. With the exception of spring barley, a risk premium is required if farmers are to be indifferent between their current enterprise and willow or miscanthus. The value of the risk premium required to entice farmers to switch to miscanthus production is significantly less than that required for willow. This suggests that a greater level of risk is associated with willow than with miscanthus.Biomass, SERF, Risk Premium, Resource /Energy Economics and Policy, Risk and Uncertainty,

Identifying the drivers and constraints to adoption of IPM amongst arable farmers in UK and Ireland.

Publication history: Accepted - 2 May 2021; Published online - 15 May 2021.BACKGROUND Arable crops in temperate climatic regions such as the UK and Ireland are subject to a multitude of pests (weeds, diseases and vertebrate/invertebrate pests) that can negatively impact productivity if not properly managed. Integrated pest management (IPM) is widely promoted as a sustainable approach to pest management, yet there are few recent studies assessing adoption levels and factors influencing this in arable cropping systems in the UK and Ireland. This study used an extensive farmer survey to address both these issues. RESULTS Adoption levels of various IPM practices varied across the sample depending on a range of factors relating to both farm and farmer characteristics. Positive relationships were observed between IPM adoption and farmed area, and familiarity with IPM. Choice of pest control information sources was also found to be influential on farmer familiarity with IPM, with those who were proactive in seeking information from impartial sources being more engaged and reporting higher levels of adoption. CONCLUSION Policies that encourage farmers to greater levels of engagement with their pest management issues and more proactive information seeking, such as through advisory professionals, more experienced peers through crop walks, open days and discussion groups should be strongly encouraged.We acknowledge the financial and logistical support of the: Scottish Government Strategic Research Programme; Rural Business Research (England); Department of Agriculture, Food and the Marine (Ireland) (RSF 14/S/879); and the Department of Agriculture, Environment and Rural Affairs (Northern Ireland) in enabling the study reported here

Identifying the drivers and constraints to adoption of IPM amongst arable farmers in the UK and Ireland

BACKGROUND: Arable crops in temperate climatic regions such as the UK and Ireland are subject to multitude of pests (weeds, diseases and vertebrate/invertebrate pests) that can negatively impact productivity if not properly managed. Integrated pest management (IPM) is widely promoted as a sustainable approach to pest management, yet there are few recent studies assessing adoption levels and factors influencing this in arable cropping systems in the UK and Ireland. This study used an extensive farmer survey to address both these issues. RESULTS: Adoption levels of various IPM practices varied across the sample depending on a range of factors relating to both farm and farmer characteristics. Positive relationships were observed between IPM adoption and farmed area, and familiarity with IPM. Choice of pest control information sources was also found to be influential on farmer familiarity with IPM, with those who were proactive in seeking information from impartial sources being more engaged and reporting higher levels of adoption. CONCLUSION: Policies which encourage farmers to greater levels of engagement with their pest management issues and more proactive information seeking, such as through advisory professionals, more experienced peers through crop walks, open days and discussion groups should be strongly encouraged