Adjustments to Changing Economic Conditions in Norwegian Dairy Farming

LP models of Norwegian dairy farms are designed to evaluate the impact of changes inprices and subsidies on production systems and on profitability at the farm level. At 1999-prices, producing a fixed milk quota with low to moderate yielding cows (6000 to 6600 kg milk annually) is most profitable. Silage offered ad libitum is profitable. Athree cut harvesting system is more profitable than two cuts. Changes in the milk pricehave no effects on production. If forage crops is the only possible land use, increased area payments have no effects on production. If non-forage crops are also grown,increased area payments for forage crops result in a higher proportion of the land being used for temporary grass (ley) and in cheaper forage, making higher silage intake per cow profitable. Higher intake of silage achieved through supplementing less con-centrates, results in lower milk yield per cow. By increasing headage payments, milk yield falls, as it is optimal to have more cows to produce the same quota output. Reduced product and concentrate prices combined with higher area and headagepayments result in more cows and lower yields. Silage offered in a fixed ration is themost profitable option and the level of concentrates per cow is high. More land is thenused for permanent pastures and less for non-forage crops.Livestock Production/Industries,

Adjustments to Changing Economic Conditions in Norwegian Dairy Farming

LP models of Norwegian dairy farms are designed to evaluate the impact of changes in prices and subsidies on production systems and on profitability at the farm level. At 1999-prices, producing a fixed milk quota with low to moderate yielding cows (6000 to 6600 kg milk annually) is most profitable. Silage offered ad libitum is profitable. A three cut harvesting system is more profitable than two cuts. Changes in the milk price have no effects on production. If forage crops is the only possible land use, increased area payments have no effects on production. If non-forage crops are also grown, increased area payments for forage crops result in a higher proportion of the land being used for temporary grass (ley) and in cheaper forage, making higher silage intake per cow profitable. Higher intake of silage achieved through supplementing less concentrates, results in lower milk yield per cow. By increasing headage payments, milk yield falls, as it is optimal to have more cows to produce the same quota output. Reduced product and concentrate prices combined with higher area and headage payments result in more cows and lower yields. Silage offered in a fixed ration is the most profitable option and the level of concentrates per cow is high. More land is then used for permanent pastures and less for non-forage.Farm Management,

Organic dairy farming in Norway in relation to the ‘conventionalisation’ debate

The new organic farmers may differ from their more established colleagues, which may have implications for the development of the organic farming sector and its distinctiveness vis-à-vis conventional production practices. The aim of this study was to explore organic farmers’ characteristics, farming goals and conversion motives, grouped by year of conversion (three groups). A survey was undertaken among organic dairy farmers in Norway. The newcomers (converted in 2000 or later) were younger and less educated than the early entrants who converted in 1995 or earlier. The newcomer herds were fed more concentrates and had higher milk production intensity than the herds of the two earlier converting groups. Newcomers more often mentioned goals related to profit and leisure time. The early entrants were more strongly motivated by food quality and soil fertility/pollution issues than the others, whereas financial reasons were relatively more important among the newcomers. Even though trends towards more pragmatic and business oriented farming were found, the majority of the newcomers were fairly committed

Perceptions and Impacts of FRAM-A: A Norwegian Farm Business Development Programme

The FRAM-A(gro) programme has been initiated to improve Norwegian farmers' business and strategic management skills. This paper reports on an evaluation of the early projects. Key findings are that the learning model combining three approaches (theory, group learning and onfarm activities) was successful, and that farmers were satisfied with the one-to-one consultancy.Training programme, farm development, strategic management, consultancy, evaluation, Farm Management, Teaching/Communication/Extension/Profession,

Factors affecting exit intentions in Norwegian sheep farms

Western livestock sectors have shifted towards fewer, larger farms, causing concerns about the appearance of the countryside, ecosystem services, and rural depopulation. This study empirically estimates factors likely to affect exit intentions in sheep farms. Data were collected from specialised sheep farms included in the Norwegian Farm Business Survey. Of the 59 responses, 44 operators believed the farm would be producing sheep in 10 years. A logistic regression model was used to determine the most decisive variables associated with an exit intention, where the interdependence of factors affecting profitability and, subsequently, exit intention were taken into account. This study found that farmers reporting the most positive views of the local farming community were less likely to plan an exit. Exit intentions were not significantly influenced by farming goals, location, off-farm income, or profitability. The primacy of non-economic, community-based factors as an engine to sustain farms, suggests that more attention need to be paid to social processes and relations in local communities. Farmer groups and policy-makers should consider how to encourage supportive local communities when designing policies to retain sheep farms.acceptedVersio

Stochastic Utility-Efficient Programming of Organic Dairy Farms

Opportunities to make sequential decisions and adjust activities as a season progresses and more information becomes available characterize the farm management process. In this paper, we present a discrete stochastic two-stage utility efficient programming model of organic dairy farms, which includes risk aversion in the decision maker's objective function as well as both embedded risk (stochastic programming with resource) and non-embedded risk (stochastic programming without recourse). Historical farm accountancy data and subjective judgments were combined to assess the nature of the uncertainty that affects the possible consequences of the decisions. The programming model was used within a stochastic dominance framework to examine optimal strategies in organic dairy systems in Norway.agriculture, risk analysis, stochastic programming, stochastic dominance, organic farming, Livestock Production/Industries, Q12, C61,

Organic Dairy Farming in Norway Under the 100% Organically Produced Feed Requirement

The EU regulation governing organic production will require 100% organic feed in organic dairy systems from August 2005 compared with 85% currently in Norway. This study aimed to assess adjustments in resource use and financial impacts on organic dairy herds using a discrete stochastic programming model. Farm management effects of the regulatory change varied between farm types. For the two organic dairy systems examined, both having a milk quota of 100 000 litres but with varying farmland availability, the introduction of the 100% organic feed regulation resulted in an economic loss of approximately 6-8% of the net income compared to the current regime. The economic loss was mainly due to the considerable higher price of organic compared to conventional concentrates.feed regulation, organic farming, milk production, stochastic programming, Livestock Production/Industries,

A Comparison of Risk Exposure in Aquaculture and Agricultural Businesses

Agriculture and aquaculture have common features associated with their biological nature affecting risk exposure of the businesses. The aim of this paper is to compare risk exposure in salmon farming and agricultural enterprises in Norway by using an implicit error component model to examine the risk structure of yields, prices and economic returns at the farm level. Results indicate a higher farm-level year-to-year variability in yields, prices and economic returns in salmon farming than in agricultural enterprises. The variability in livestock enterprises was generally lower than for crop enterprises. Return on assets was highest in salmon farming with an average annual return of 9.2%. All of the agricultural farm types exhibited a negative average return on assets on average. Stochastic dominance tests of the distribution of economic returns from aquaculture and agricultural farm types showed salmon farming to be the most risk efficient alternative and salmon farming was most attractive from an investor’s perspective.Risk analysis, variability, Norway, Risk and Uncertainty,

Poster: Dropping organic certification - effects on organic farming in Norway

Numerous studies have examined organic farmers’ characteristics, motives, attitudes and barriers related to the conversion from conventional to organic farming. Recent studies have also discussed the perceived problems and reasons stated by organic farmers for opting out of certified production. In Norway, farmers’ reasons for opting out of certified organic farming have so far just been explored on a regional level or limited to one production; most such analyses have not been published internationally. E.g., it has not been explored if the farmers in question return to conventional practices or exit farming altogether

Risk and economic sustainability of crop farming systems

Environmental, social and economic attributes are important for the sustainability of a farming system. Comparing farming systems by considering only expected profitability ignores differences in both sustainability and in the riskiness of system returns. Further, in choosing between farming systems, the ability to survive various risks and shocks and con-tinue in the future is important, i.e., system resilience and persistence are important aspects of sustainabil-ity. Yet resilience and persistence have seldom been directly considered in evaluations of economic sus-tainability. A whole-farm stochastic simulation model over a six-year planning horizon was used to compare organic and conventional cropping systems for a representative farm situation in Eastern Norway. The relative sustainability of alternative systems under changing assumptions about future technology and price regimes was examined in terms of terminal financial position. The risk efficiency of the same alternatives was also compared. The results illustrate possible conflicts between pursuit of risk efficiency versus sustainability. The model used could be useful in supporting farmers’ choice between farming sys-tems as well for policy makers to develop more sharply targeted policies