Economies Of Scale And Scope In The Norwegian Agriculture

At the UN climate change conference in Paris in November 2015, Norway committed itself to a 40% reduction in greenhouse gas (GHG) emissions by 2030 compared to 1990 levels. Agriculture accounts for 8% of Norway’s total GHG emissions. If GHGs from drained and cultivated wetland (categorized under land use, land use change and forestry) are included, the share is 13%; this for a sector that accounts for roughly 0.3% of GDP. As is the case in most countries, agriculture is currently exempt from emission reduction measures, including the European Union’s Emissions Trading System (ETS), in which Norway participates. But the country has recently signaled its intention to include agriculture in future emission reduction efforts. Consideration is being given to how best to achieve GHG reductions in the sector. A recent report by the Norwegian Green Tax Commission, established by the government to evaluate policy options for achieving emission reductions, (Government of Norway, 2015) emphasizes the importance of including agriculture. The Commission suggests that agricultural emissions should be taxed at the same rate as for other sectors. It also recommends that reductions in the production and consumption of red meat should be specifically targeted, through cuts in production grants to farmers and the imposition of consumption taxes. Unsurprisingly, this proposed policy shift is extremely controversial and faces resistance, particularly from the farmers’ unions. Farmers argue that the maintenance of domestic agricultural production is crucial for achieving national food security objectives, in addition to pursuing other aims such as the maintenance of economic activity in rural areas and landscape preservation. Food security, which has been a key policy objective since the end of the Second World War, has been interpreted in Norway as requiring high levels of selfsufficiency in basic agricultural commodities. To achieve this, substantial subsidies are provided to farmers and domestic prices of many commodities are kept at high levels by restricting imports. The Organization for Economic Cooperation and Development (OECD) estimates that the total financial support provided to Norwegian agriculture in 2015 was equivalent to 62% of the value of gross farm receipts, which made Norway (along with Switzerland) a leader in the amount of support provided to agriculture by the 50 OECD member and non-member countries monitored by the Organization (OECD, 2016). In this paper we analyze policy options for achieving a 40% reduction in agricultural GHG emissions, consistent with the economy-wide target, while imposing the restriction that national food production measured in calories should be maintained (the food security target). This is consistent with the way that the Norwegian government identifies the country’s food security objective. In section 2 we outline the current situation with respect to GHG emissions in Norwegian agriculture. In section 3 we illustrate the policy issues involved by considering two product aggregates that are intensive in the use of land for crop production (grainland) and grassland, respectively. The aggregates are based on data for the main commodities in Norwegian agriculture relating to GHG emissions, land use, caloric content, subsidies, and costs per unit of production. We show that even though the opportunity set (i.e., the production combinations that are possible within technical constraints) is narrow, a 40% cut in emissions is achievable by substituting from ruminant products that are intensive in the use of grassland to products based on grainland. We also show that the emissions reduction both reduces government budgetary costs and land use, i.e., ruminant products are characterized by relatively high subsidies and land use. Two-dimensional analysis ignores the fact that per unit emissions from dairy production are low compared to other ruminant products (i.e., beef and sheep production). Both in terms of production value and agricultural employment, dairy farming is the most important component of Norwegian agriculture. Consequently, milk production deserves to be separated from ruminant meat production. Finally in section 4, we present a detailed analysis 3 of policy options derived from a disaggregated model that includes all the major products in Norwegian agriculture. In the model-based analysis, we examine first the imposition of a carbon tax, while maintaining existing agricultural support policies and import protection, and achieving the food security (production of calories) target. Since the imposition of a carbon tax in agriculture presents both technical and political challenges, we then examine an alternative approach of changing the existing structure of agricultural support to approximate the same result. We show that it is possible to change current subsidy rates to mimic the carbon tax and calorie target solution. The explanation for this is that ruminant products not only generate high emissions per produced calorie, but they are also the most highly subsidized products. Meat from ruminants is relatively unimportant in achieving Norway’s food security objective of calorie availability.

It is critical to analyze the performance of enterprises to achieve sustainable agricultural development. Several studies have been conducted to assess farm performance. However, the studies have been criticized for failing to account for farm heterogeneity (which is frequently unobserved) in their evaluation of Norwegian agricultural performance. Technically, a farm is efficient if it can produce a certain amount of output with the fewest possible inputs and no input waste. In this paper, efficiency scores are calculated using a production function with both a random intercept and a random slope parameter, addressing the issue of unobserved heterogeneity in stochastic frontier analysis. Using Norwegian dairy and crop farms as a case study, we demonstrate the viability of improving the agriculture industry and reducing resource waste. The case study was established on data collected from 5884 dairy farms and 1880 crop farms from the years 2000 to 2019. According to the empirical findings of the case study, dairy and crop producers used inefficient technologies and squandered production resources. If all farmers follow a sustainable and efficient path to produce agricultural output, they could increase output by 15–18%. Farmers must follow sustainable paths, and politicians must encourage farm experience exchange so that less efficient dairy and crop-producing farms can learn from the most efficient farms to achieve sustainable development.

Artificial Intelligence is advancing popularity in dairy farming and growing at a phenomenal pace. It can predominantly change the scenario of dairy farmers by maintaining the health, physiological and physical conditions of dairy-cows. This knowledge-based technology has a huge potential and could confront the loopholes in dairy farming and thus indirectly can strengthen the dairy industry. In dairy farming AI has multiple applications like monitoring the activities of the dairy-cows, boosting the milk production and farm productivity, detection of mastitis in dairy-cows, detecting the dairy farm odours and developing the smart cow houses powered by image analysis. Eventually, it provides new hope and open prospects for the overall quality and progress in the dairy industry through a profitable business approach in dairy farming. Keywords: artificial intelligence, dairy farming, cows, health, technology Cite this Article Kanika P awar, Indu Panchal . Artificial Intelligence in Dairy Farming: A Way Forward for Improving the Health of Dairy Cows . Research & Reviews: Journal of Dairy Science and Technology . 2019; 8(3): 1 3 1 6 p.

The changing farm population challenges Cooperative Extension to adjust programming objectives to meet the changing needs of their clientele. In New England, a mail survey identical to a survey conducted 5 years ago is used to assess production practices, technologies, and future concerns of Vermont dairy farmers. The survey findings are then compared to the earlier survey to identify trends in farm size, technologies, and operator characteristics. While New England dairy farms are making a major shift in technology and size, the dairy industry is witnessing the disappearance of small farms and a fastening pace in the growth of herds with more than 400 cows. In this environment, there is a tremendous need for Cooperative Extension to identify changing production trends and the uses of technology on regional dairy farms for future programming needs. With fewer resources and yet greater pressure to meet clientele educational needs, the survey presents the opportunity to identify producer concerns and direct future programming needs. We have seen the average size of Vermont dairy farms has grown from 39 in 1970 to 90 in 1997 to 115 in 2002. the comparison of current practices to 1997 also indicates that average production has increased to by more than 2000 pounds of milk per cow. While farms are getting bigger, there are more farms using milking parlors and automatic takeoffs on larger farms. However the median size herd is only 70 cows, up from only 60 cows 5 years ago, indicating that a few larger dairy farms greater than 500 cows significantly affects the average size. One of the biggest changes seen in the state's dairy industry has been the practice of grazing. Ten years ago grazing had been promoted as a viable alternative production that was linked to lower production costs and higher profitability. In Vermont, grazing received focused attention from many farmers who desired to link Vermont's grass forage advantage with greater profitability. However, the 2002 mail survey indicated farmers relying on grazing has decreased by nearly 20%, and herd size of farms using grazing has increased by 12 cows to 55 cows per farm. The characteristics of farm operators have also shifted as the age of the respondents has decreased while educational level has increased. In other demographics, we have seen the number of farms using corporative business structure increased from 5 to 15%. Dairy farmers identified real estate taxes and environmental regulations as the factors most threatening to their survival. The results from the survey provide a picture of the dairy farming needs, however to better group farmers to identify concerns and focus programming needs, factor analysis is used to group farmers by a set of characteristics set the farmers apart from others. Factor analysis is a statistical procedure that ranks correlation among a set of key characteristics that are not readily identifiable through ordinary statistical procedures. For example, factor analysis has been used previously to identify graziers vs. non-graziers, farmers more likely to adopt certain technologies, and those more likely to expand their herds in the future. These statistics will assist Vermont Cooperative Extension to direct programming needs at groups that are most concerned about certain issues, most likely to expand, or to direct at farmers most concerned about an issue such as estate planning. This recent survey provides a rare opportunity to analyze extension clientele. The use of cluster analysis will provide Extension leadership greater knowledge of the state's dairy farmer population and enable the formation of more effective and directive programming.

Dairy farming is a major source of greenhouse gas (GHG) emissions in agriculture. There are numerous scientific studies analysing GHG flows and testing GHG reduction methods in dairy farming, yet very few scientific papers cover all the relevant GHG flows. GHG flows that are difficult to quantify, such as C sequestration in soils, the effects of land-use change (LUC) or the energy input used to produce capital equipment, are not always considered.This paper describes the development and application of a model for energy and GHG accounting in dairy farming. This new model enables all relevant nutrient, energy and GHG flows to be modelled at farm level. This then forms the basis for system analysis and derivation of GHG mitigation strategies. The model was used on 18 organic and 18 con-ventional farms in Germany. Calculated CO2-eq emissions per kg of Energy Corrected Milk (ECM) were 995 g on average for organic farms (org) and 1,048 g on average for conventional farms (con). The largest contribution (55 % (org) and 43 % (con)) to total GHG emissions came from enteric methane emissions (549 g CO2-eq (kg ECM)-1 (org) and 449 g CO2-eq (kg ECM)-1 (con)). On the organic dairy farms, there was an increase in soil humus and therefore carbon storage and sequestration in soils, whereas the GHG emissions for the conventional farms included CO2 emissions from LUC due to soybean usage. The significantly higher energy input in the conventional systems resulted from the production of energy-intensive concentrates, mineral fertilisers and pesticides, and transportation (imported feed).This study shows that there are many factors that influence GHG emissions in dairy farming, and that these factors often interact with each other. An increase in productivity is one of several optimisation strategies; however, it must not be at the expense of productive lifetime or require an extremely high amount of concentrates. GHG reduction in dairy farming requires farm-specific optimisation approaches due to the heterogeneity of production systems.

The farm level economic impacts of the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) on representative crop and livestock operations are projected in this report. The analysis was conducted over the 2002-2009 planning horizon using FLIPSIM, AFPC’s whole farm simulation model. Data to simulate farming and ranching operations in the nation’s major production regions came from two sources: - Producer panel cooperation to develop economic information to describe and simulate representative crop, livestock, and dairy farms. - Projected prices, policy variables, and input inflation rates from the Food and Agricultural Policy Research Institute (FAPRI) December 2004 Baseline. The primary objective of the analysis is to determine the farms’ economic viability by region and commodity through the life of the 2002 Farm Bill. The FLIPSIM policy simulation model incorporates the historical risk faced by farmers and ranchers for prices and production. This report presents the results of the December 2004 Baseline in a risk context using selected simulated probabilities and ranges for annual net cash farm income values. The probability of a farm experiencing annual cash flow deficits and the probability of a farm losing real net worth are included as indicators of the cash flow and equity risks facing farms through the year 2009. This report is organized into ten sections. The first section summarizes the process used to develop the representative farms and the key assumptions utilized for the farm level analysis. The second section summarizes the FAPRI December 2004 Baseline and the policy and price assumptions used for the representative farm analyses. The third through sixth sections present the results of the simulation analyses for feed grain, wheat, cotton, and rice farms. The seventh through ninth sections summarize simulation results for dairy, cattle and hog farms. Two appendices constitute the final section of the report. Appendix A provides tables to summarize the physical and financial characteristics for each of the representative farms. Appendix B provides the names of producers, land grant faculty, and industry leaders who cooperated in the panel interview process to develop the representative farms.

Economies of scale and scope describe key characteristics of production cost functions that influence allocations and prices on procurement markets. Combinatorial auctions have been analyzed intensively, and enable the bidders to express economies of scope, but they typically are designed for single units of each item only and cannot easily be extended to the multi-unit case. Auction designs for markets with economies of scale are much less well understood, they require new bidding languages, and the supplier selection typically becomes a hard computational problem. We suggest a bidding language allowing to describe economies of scope and scale. It enables bidders to specify supply curves, representing economies of scale, and various rebates accounting for economies of scope. In addition, we support a number of side constraints enabling the auctioneer to consider various business rules in the winner determination. We conduct computational experiments based on a branch-and-cut solver to explore the incremental computational burden to determine optimal solutions brought about by the need to express economies of scope for problems of practical size.

Scale Economies, Scope Economies, and Technical Change in Federal Reserve Payment Processing

In the past decade, the U.S. economy has witnessed a tremendous surge in the usage of electronic payment processing services and an increased importance of the firms that provide these services. In this paper,we estimate scale economies, scope economies, and technical change in the Federal Reserve's provision of payments processing from 1990 to 2000. We find considerable scale economies and evidence of some scope economies for the provision of automated clearinghouse, Fedwire, and Book-Entry services no matter whether we specify a separable quadratic or a translog cost function. In addition, we find that disembodied technical change also contributed to the overall reduction in costs throughout the 1990s.

The water industry presents several structures in different countries and also within countries. Hence, several studies have been conducted to evaluate the presence of economies of scope and scale in the water industry leading to inconclusive results. The lack of a common methodology has been identified as an important factor contributing to divergent conclusions. This paper evaluates, for the first time, the presence of economies of scale and scope in the water industry using a flexible technology approach integrating operational and exogenous variables of the water companies in the cost functions. The empirical application carried out for the English and Welsh water industry evidenced that the inclusion of exogenous variables accounts for significant differences in economies of scale and scope. Moreover, completely different results were obtained when the economies of scale and scope were estimated using common and flexible technology methodological approaches. The findings of this study reveal the importance of using an appropriate methodology to support policy decision-making processes to promote sustainable urban water activities.

Dairy farmers are groups of people who face problems of low levels of well-being. General school of thought (mainstream) views the problem of poverty is caused by low productivity factor. The use of productivity approach in solving the poverty problem of dairy farmers needs to be supplemented by another approaches in terms of non-productivity factors. This non-productivity approach which is rarel y used is transaction cost approach. Starting from this, the study is carried out by transactions cost approach. This study specifically aims to analyze the structure of the cost transaction and the factors leading to the emergence of transaction costs encountered by dairy farmers members of cooperative in Kuningan West Java. Methods to determine the structure of the transaction cost is performed by analyzing farming and the factors that affect dairy farmers transaction costs were analyzed using multiple regression analysis. Analysis of the cost transaction structure showed that the dairy farmer transaction costs consist of contract cost (3.06%), welfare cost (1.51%), maintenance of livestock resources cost (56.52%), as well as milk delivery and feed or inputs search costs (38.90%). Transaction costs to revenue ratio for credit dairy farmers is 0.0279 and the ratio for independent dairy farmers is 0.0218. Meanwhile, the ratio of transaction costs to the total cost for credit dairy farmers is 0.0160 and the ratio for independent dairy farmers is 0.0146. Afterwards, based on the results of multiple regression analysis of determinants of transaction costs, independent variable of revenue and education have significant effect on the amount of transaction costs. K e y words: transaction costs, dairy farmers, member of cooperative.

The aim of the study was to investigate the farm level impacts of the Greening Measures as proposed by the EU Commission under the 2014 CAP Reform across the three main farm types in North Cornwall. Semi-structured interviews were conducted with 8 farmers in each category of dairy, mixed and upland farms. These aimed to determine the perceived level and nature of the impact of each of the three proposed measures: permanent pasture preservation, crop diversity and eco-focus land use. The study concluded that dairy farms would be the farm type most heavily impacted by the measures in general and in particular those that grew only one arable crop. Mixed farms were also impacted predominantly just from the permanent pasture and crop diversification elements of Greening. The investigation found that upland farms were likely to remain largely unaffected by proposed Greening Measures.

Indian economy is predominantly rural and agriculture oriented where dairy farming is one of the sources of income for majority of the farmers of the country. In Indian context, the farming became a familial tradition where along with the male counterparts females are also associated from the beginning of the era. Thus, a study was framed to have a look on dairy farming with the analysis of gender in dairy farming in one of the north-eastern state of India. For that purpose, both 100 male and 100 female were interviewed to weigh up their decision making pattern and activity profile (who is doing what) in dairy farming in both plain and hilly region of Tripura. The results shows that, regarding decision making pattern in both the region male members of the family (such as 88 % in Selling and purchasing of animals in plain) were most energetic rather than their female counterparts almost in all the activities. The results show a different picture in hilly region where joint decision making were important rather than plain region and participation in different activities of dairy farming males were active in purchasing of animals (96.00 % in plain) and selling of the milk (74.00 % in plain) in both the region. But the females were most active in cleaning of the animal, utensils and animal shed (83.79 % in hilly), milking (97.29 % in hilly) in both the region. It was further seen that female in the hilly region were more participating in decision making than females of plain region. The study has recommended that there is need to empower the female farther so that they can take part in farming equally with their male counterparts.

An empirical analysis of scale and scope economies and technical change in an Irish multiproduct banking firm

There is growing policy concern regarding the competitiveness of small-scale livestock production in the wake of the contemporary livestock revolution in many developing countries. In Kenya, this debate has focused on economies of scale and the undue influence of policy distortions on promoting the scaling up of dairy farms. This paper seeks to investigate economies of scale in Kenyan dairy in terms of relative profit efficiency at different levels of output, and identify policy and technology options to help small-scale farmers develop solutions to the challenges of competition. Data were collected from 204 dairy producers of different farm sizes in rural Kiambu and Thika, and urban Nairobi districts and a stochastic frontier model approach was used to analyze the determinants of profitability and inefficiency. Unit profitability per farm ranged between US$0.13 - US$0.16 per liter of milk with no significant variation across scales of farm. However, at all given levels of scale of farm, inefficiency significantly contributed to variability in profitability across farms. Scale had no significant effect on efficiency, confirming the relative competitiveness of small-scale dairy producers. Dairy farmers with commercial poultry achieved higher relative profit efficiency as poultry waste was fed to cattle. Rural location relative to Nairobi also increased efficiency. Linking rural areas and major market centre with good roads, strengthening of farmers' co-operative societies and exploring use of cheaper raw materials in the manufacture of concentrate feeds may strengthen the competitive position small dairy farms versus large ones.