Assisting Whole-Farm Decision-Making through Stochastic Budgeting

Stochastic budgeting is used to simulate the business and financial risk and the performance over a six-year planning horizon on a Norwegian dairy farm. A major difficulty with stochastic whole-farm budgeting lies in identifying and measuring dependency relationships between stochastic variables. Some methods to account for these stochastic dependencies are illustrated. The financial feasibility of different investment and management strategies is evaluated. In contrast with earlier studies with stochastic farm budgeting, the option aspect is included in the analysis.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

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,

Term Structure of Volatility and Price Jumps in Agricultural Markets - Evidence from Option Data

Empirical evidence suggests that agricultural futures price movements have fat-tailed distributions and exhibit sudden and unexpected price jumps. There is also evidence that the volatility of futures prices contains a term structure depending on both calendar-time and time to maturity. This paper extends Bates (1991) jump-diffusion option pricing model by including both seasonal and maturity effects in volatility. An in-sample fit to market option prices on wheat futures shows that our model outperforms previous models considered in the literature. A numerical example illustrates the economic significance of our results for option valuation.Option pricing, Futures, Term structure of volatility, Jump-diffusion, Agricultural markets, Demand and Price Analysis,

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,

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,

Frontline nurses’ appraisal of organizational attractiveness and the role of management support, interdepartmental collaboration climate and service quality of care

© Emerald Publishing LimitedPurpose – This paper aims to examine the factors related to organizational attractiveness (OA), a concept originating in the strategy of employer branding. Previous research on OA has predominantly adopted the perspective of external applicants. In contrast, the present study takes the perspective of internal and current employees, extending further the scope of studies on OA. Design/methodology/approach – Quantitative data were collected from a survey consisting of a sample of 164 nurses, all employees of public hospitals. Confirmatory factor analysis and structural equation modeling were used to analyze the data. Furthermore, the indirect effects were tested by mediator analysis. Findings – Interdepartmental collaboration climate, management support and service quality of care were shown to have a positive effect on OA, with the three factors explaining 45% (R2 = 0.45) of OA. The relationship between management support and OA was found to be mediated through the interdepartmental collaboration climate, and that between the interdepartmental collaboration climate and OA was found to be mediated through the service quality of care. Originality/value – This study contributes to an understanding of OA from a current employee perspective. Specifically, it reveals how the three factors of interdepartmental collaboration climate, management support and service quality of care influence and shape the perception of current employees (nurses) toward the attractiveness of their organization.acceptedVersio

Econometric Analysis of the Effects of Subsidies on Farm Production in Case of Endogenous Input Quantities

The effect of subsidies on farm production has been a major topic in agricultural economics for several decades. We present a new approach for analyzing the effects of different types of coupled and decoupled subsidies on farm production with econometric methods. In contrast to most previous studies, our approach is entirely based on a theoretical microeconomic model, explicitly allows subsidies to have an impact on input use, and takes linkages between the farm and the farm household into account.Agricultural and Food Policy, Productivity Analysis,

Econometric Analysis of the Effects of Subsidies on Farm Production in Case of Endogenous Input Quantities

Replaced with revised version of paper 07/29/09.panel data, subsidies, household model, endogeneity, Norwegian grain farming, Agricultural and Food Policy, Consumer/Household Economics, Production Economics,

The productivity performance of Finnish and Norwegian dairy farms: the effect of joining/not joining the EU

Dairy production has long been the most important production line in Finnish and Norwegian agriculture. Prior to Finland joining the EU, farm structure as well as national agricultural policy was very similar in the two countries. In this paper, we explore development and differences in productivity and efficiency trends in the two countries before and after 1994 when Finland joined the EU. The challenge is to isolate the effect of EU-membership from other events like introduction of milk quotas, and more generally, changes in agricultural policy and macro-economic factors. We model productivity growth by means of standard production efficiency frontier models on twenty-year panels of Finnish and Norwegian farm accounts data.