Farm profitability and structural challenges – geographical patterns in the Danish agricultural economy

Abstract

The objective of the paper is to demonstrate a methodology to establish data for analysing the geographical patterns in the economic performance of farms. The methodology combines population-based agricultural register data on physical activity levels with sample-based farm economic accounts data. Using a least-squares approach, the method estimates economic figures for each farm in the population conditional on farm size, land allocation and number of different types of livestock. The method is used for describing the spatial patterns in economic returns to agriculture, using Denmark as an illustrative example. Economic contribution/hectare is relatively stronger in western parts of the country. This is associated with high livestock density in these areas, but the high livestock density also poses future economic challenges to farms in these areas to a higher extent than in the rest of Denmark.