FADN Database Research Articles

THE IMPACT OF ECONOMIC AND ENVIRONMENTAL SHOCKS ON POLISH FARMS IN 2010-2019

The research aimed to determine the level of robustness of Polish farms on the example of selected economic and environmental shocks. The current state of knowledge about the concept of resilience is presented, and a research gap regarding the measurement of resilience is identified. Based on the available literature, it was indicated what economic and environmental shocks Polish farms were exposed to in 2010-2019. Then, robustness indicators available in the literature were used to determine the level of resilience of individual groups of farms, divided by type of production. The indicators were calculated based on publicly available data from the FADN database and were related to the dynamics of profitability of economic units. The study showed that the impact of the indicated shocks is noticeable. Moreover, it was found that most of the surveyed farms were able to return to astable state within a year of the shock, indicating that they could be considered resilient. Based on the research conducted, it can be concluded that farms dealing with permanent crops are the most resilient to economic and environmental shocks.

Farm Profitability and Agritourism in the EU - Does size matter?

Agritourism is an activity which represents the non-traditional roles of the countryside: food production, environmental values, the beauty of landscapes, cultural heritage and traditional lifestyles, contributing to income diversification. Thus agritourism is expected to help improve farm performance in terms of incomes, profitability and efficiency. While extensive empirical research has been done about this issue in the USA, relatively few results are known for Europe. The present paper deals with the impacts of agritourism revenues on the farm profitability and farm performance in the 28 countries of the EU (including Britain), from 2004 to 2020, relying on the standard FADN database, applying descriptive statistics, correlations and panel regression. Our findings show, that farm size matters, and although the smallest and the largest farms benefit, it is the medium size farms that gain the most from agritourism. Farms with smaller land areas, and less farm capital tend to be involved more in agritourism than better equipped ones, while the subsidy policy of the EU also enhances agritourism revenues.

Influence of the production direction of European Union farms on the level of financial liabilities

Purpose: The main purpose of the study was to investigate the relationship between the direction of production of farms in the European Union and the level of their liabilities. Design/methodology/approach: The study period includes the years 2005-2019. Data relating to eight types of farming identified in the FADN database were used to illustrate the directions of production. The conducted research focuses on the following types of liabilities: total, incurred for a period longer than one year and incurred for a period of less than one year with outstanding cash payments. One-way ANOVA variance was used to achieve the research objective. Findings: The conducted research showed that the most common differences in the level of liabilities are between the type of granivores and the types of farms focused on plant production and other permanent crops with farms focused on field crops, horticulture and livestock production. Relatively few differences can be observed in the case of farms targeting the same source of food origin (except for other permanent crops). Originality/value: The obtained results indicate a significant differentiation in the level of liabilities in farms focused on plant and livestock production, which results from the different specificity of their production.

Mapping data granularity: The case of FADN

The present analysis looks into the issue of mapping information contained in the fadn database aimed at finding a methodology useful as a preliminary analysis to data extraction.To the purpose the concept of data granularity has been introduced. The method has been used to perform a farm-based analysis, revealing a wide heterogeneity of factors and levels that show the existence of specific data ‘patches'. The work proved to be able to increase awareness regarding effective data availability as a preliminary analysis to queries performed on relational data-bases which are not designed from a systems basis, and that can be considered valid for any survey-supplied data.

Productivity and Efficiency of Precision Farming: The Case of Czech Cereal Production

The paper deals with the sources of competitiveness of Czech cereal production by considering precision farming technology and employing micro-level data collected in the FADN database for the period 2005–2018. The analysis is based on the stochastic frontier modelling of an input distance function in the specification of the four-component model, which currently represents the most advanced approach to technical efficiency analysis. To provide a robust estimate of the model, the paper employs methods which control for the potential endogeneity of netputs in the four-step estimation procedure. Furthermore, the total factor productivity change is calculated using the Törnqvist-Theil index. The results reveal that Czech cereal producers took great advantage of their production possibilities and experienced technological progress, which contributed considerably to productivity dynamics and consequently to an increase in their competitiveness. Precision farming, which is associated with a large number of innovations reflected in technological change and optimal resource use, contributed to higher technical efficiency connected with cost savings in Czech cereal production.

Productivity and Efficiency in European Milk Production: Can We Observe the Effects of Abolishing Milk Quotas?

The study aims to explore the sources of competitiveness of dairy producers before and after the abolition of milk quotas in selected EU member states. The investigation is based on the stochastic frontier modelling of an input distance function in the specification of the four-error-component model. The model is estimated with a multistep procedure employing the generalized method of moments estimator, addressing the potential endogeneity of netputs, and panel data gained from the FADN database. The results revealed that total factor productivity experienced an increasing trend in the majority of the analysed countries. Since the main driver of productivity growth was found to be the scale effect, our findings support the hypothesis that abolishing milk quotas has a positive effect.

FACTOR PRODUCTIVITY AND PROFITABILITY OF HORTICULTURAL HOLDINGS IN SELECTED COUNTRIES SPECIALIZING IN FRUIT AND VEGETABLE PRODUCTION IN THE EUROPEAN UNION IN THE PERIOD 2008-2018

The aim of the article is a comparative assessment of the productivity of horticultural farms, taking into account their economic size, in selected EU countries that specialize in horticultural production, i.e. Greece, Spain, Italy, Poland and Romania. The concentration of production and the associated increase in the economic strength of farms, as well as the multiplicity of entities of different sizes in European Union countries made it necessary to take into account the criterion of economic strength as a factor that allows comparisons between countries. In order to achieve the objective, average factor productivity and profitability of horticultural holdings from the EU FADN database in 2008-2018 were examined in static and dynamic terms through the average annual rate of change. The conducted research confirmed that with an increase in the economic size of farms, on average, their efficiency increases, and the production of fruits and vegetables in the studied period was profitable in all countries and economic size groups. The highest land productivity was achieved by Italian farms, the lowest by horticultural farms from Romania. The highest asset productivity was recorded in Spain and slightly lower in Poland, and the lowest in Italy and Romania. The highest labour productivity was in Spanish and Polish agricultural holdings, and the lowest in Italian agricultural holdings. These results were translated into profitability of production, which was the highest in Spanish farms and the lowest in Italian farms. Sales were unprofitable only in Italian and Romanian agricultural holdings.

ECONOMIC VIABILITY OF FAMILY FARMS IN EUROPE – A LITERATURE REVIEW

As family farms are the dominant form of agricultural activity in Europe, their economic viability is a prerequisite for the sustainable development of agriculture and rural areas. The aim of this research is to review the latest publications on the economic viability of family farms in Europe. Based on a systematic literature review of studies related to European agriculture published in 2010-2020, this paper presents various concepts of family farm economic viability and assesses the methodologies used. The paper also presents the results of selected empirical research from the last 10 years on family farm economic viability in Europe, broken down into international and national comparisons. Results suggest that the most common approach to measuring economic viability is to use the opportunity cost concept of own factors of production. An important observation is also that, although most studies are based on the FADN database, the results of the analyses are sensitive to the selection of the threshold wage and own capital costs. What contemporary literature lacks is a long-term comparative analysis for all EU countries, as well as studies of drivers of family farm economic viability.

Productivity of Czech Milk Production in European Comparison

The aim of the paper is to evaluate the development and main characteristics of Czech milk production productivity and to compare Czech development with the situation in the European Union. From a methodological point of view, a parametric approach in the form of stochastic frontier analysis was applied, the input distance function was estimated, and total factor productivity was examined. The analysis used an unbalanced panel data set, which describes TF14-45 specialist milk production from 27 member states of the European Union in the period 2004–2016 collected in the FADN database. The results showed that in the Czech Republic, the average value of technical efficiency was 94.01% during the analysed time period. Compared to EU member states, this figure was above the EU-13 average (93.71%). Czech milk production in the analysed period and the milk production of almost all other EU countries was characterized by increasing returns to scale. Examination of total factor productivity (TFP) showed that the scale effect and technical efficiency change effect can be considered the main components of TFP changes in Czech milk production. However, the scale effect was more significant in EU-15 countries than the Czech milk sector.

WORKING CAPITAL IN FAMILY FARMS. FINDINGS FROM FADN IN 2004-2018

The aim of this article is an analysis of the level of net working capital, calculated on: an individual farm, the length of a cycle in days, share in assets, within the framework of management efficiency in EU agricultural farms included in the FADN database in 2004-2018. Data contains basic information on the situation of approximately 8,430 production and economic types in the EU in the abovementioned period. Firstly, the analysed objects are divided into four classes on the basis of the length of the NWC cycle expressed in days (negative value, up to half a year, more than half a year but less than a year and more than a year). The centres of gravity in these categories are estimated for selected production, economic and financial information with the use of the Gretl programme. The relationship between a relation of the NWC to assets and management efficiency is also estimated. A statistically significant and positive relationship is demonstrated in the case of three of four analysed classes. Therefore, the relation of the NWC to assets has an impact on the evolution of farm management efficiency. The factor differentiating the strength of that impact is the length of the net working capital cycle on the holding. It allows to formulate the concluding remark that as negative NWC can hardly be identified and the vast majority of farms maintains it within a 1 year period, the situation of agricultural farms can be assessed as safe in the management of the NWC.

Between the Social and Economic Dimensions of Sustainability in Rural Areas—In Search of Farmers’ Quality of Life

Life quality is an important indicator of sustainable development. Farmers’ quality of life strongly affects the farm’s viability. The main goal of this study was to identify the relationships between three main components of farmers’ quality of life: economic situation, living conditions, and mental comfort. In the first phase of the study, the theoretical model representing potential relationships between quality of life components was constructed, and in the second phase the relationships were verified with the use of the structural equation modelling method. The sample consisted of 600 farmers participating in the Polish Farm Accountancy Data Framework (FADN). In the analyses, data from the FADN database and data obtained during supplementary interviews with farmers were used. The analyses revealed that living conditions are significantly and positively correlated with the economic situation and mental comfort, while mental comfort turned out to be negatively correlated with the economic situation. It was concluded that future agricultural and rural development policies should be more focused on the social dimension of sustainable development than before, particularly considering the fact that a farmer’s higher engagement in the improvement of their family’s economic condition might result in lowering their mental comfort due to the stress and work overload.

CONCENTRATION OF PRODUCTION FACTORS AND SUPPORT AND THEIR PRODUCTIVITY IN EU FARMS

The aim of the study was to assess the level of concentration of production factors and support in classes of farms distinguished by economic size. The Gini coefficient was used to assess the level of concentration. Moreover, using the Pearson correlation coefficient, the strength of the relationship between the concentration of production and support factors and their productivity was assessed. The research objects were commercial farms from EU countries. The research shows that the level of concentration of all production and support factors on EU farms is increasing, although this conclusion does not apply to all countries. In countries where the concentration of capital and labor is higher, productivity is usually higher. In turn, a higher concentration of agricultural area and support is usually accompanied by lower productivity. The article draws attention to the limited possibilities for applying statistical tests when using FADN data. The FADN database is a sample of farms obtained as a result of stratified drawing, with layers being countries. If the subject of study are countries, one cannot speak of a sample but of the entire population. Formulating statistical hypotheses regarding the population of countries (or the situation of farms in these countries) is pointless in such a case.

DETERMINANTS OF THE FINANCIAL SITUATION OF FARMS IN EUROPEAN UNION COUNTRIES GROUPED BY ECONOMIC SIZE

The main purpose of this paper was to identify the determinants of the financial situation of farms of different economic size in CEE and EU-15 countries. The FADN database served as the basic source of data. The study covered farms located in FADN regions in the period 2014–2016. The analyses focused on the determinants of the farms’ financial situation measured with a synthetic indicator. The first step of the research procedure was the construction of the synthetic indicator of the financial condition of farms. Following this, the calculated values of the synthetic characteristic were used as explained variables in multiple regression models. The study suggests that the production potential and operating subsidies have a key impact on the financial standing of EU farms. As regards the production potential of CEE farms, it would be beneficial for their financial position to reduce their labor input. In turn, a reduction in the assets-to-land ratio would have a favorable impact on the financial situation of operators based in the EU-15. This could be indicative of overinvestment in these farms. Differences were observed in ratios of productive input and in production intensity between economic size classes; this suggests that it would be reasonable for farms of different classes to implement different farming strategies. The models developed in this study revealed that the use efficiency of productive input (measured with income performance) proved to be of relatively minor importance.

Approaches to estimation the farm-level economic viability and sustainability in agriculture: A literature review

Estimation of farm economic sustainability and viability became more topical when redesigning the Common Agricultural Policy which should stabilise farm income and make agribusiness more viable and sustainable (typically in Czech areas facing natural constraints). The key question is how to calculate the income of farms or farm households not only to survive but also to grow sustainably. The article summarises and compares knowledge from 51 studies to provide a comprehensive discussion on different ways how to measure economic viability and sustainability to set income support for farms in the areas with natural constraints optimally. The authors found family farms and off-farm income as important limitations of FADN database (Farm Accountancy Data Network) for evaluation of the economic sustainability of farm household. Moreover, some financial ratios (Return on Assets – ROA and assets turnover) are not suitable viability indicators for farms with a high share of hired land (typically large legal entities). Joining family farms and legal entities, the authors recommend using modified Farm Net Value Added (MFNVA) allowing for opportunity costs of own land and non-land assets. The average wage in the economy or region is a better proxy for opportunity labour costs of unpaid work rather than average agricultural wage.<br />

SIZE VS EFFECTIVENESS OF AGRICULTURAL FARMS

The size of farms is one of the most important factors affecting their efficiency. The size of farms affects the ability to invest and introduce technical progress, achieve economies of scale, both internal and external, as well as achieving higher efficiency. The aim of the work is to determine the variation in the effectiveness of production factors and the level of investment depending on the economic size of farms. Data from the Polish FADN database for the years 2010-2017 were used. It was found that along with an increase in economic size, the productivity of production factors increased, productivity in crop and animal production grew and the intensity of reproduction of assets increased. It was found that in farms of the first size class (about 10 ha) were characterized by low efficiency in all assessed aspects and achieved worse dynamics of effectiveness changes. In medium-sized farms (50 ha), a 30-80% higher level of all efficiency indicators was achieved and, in the case of work, efficiency even by 600%. It should be emphasized that farms classified as first class size have no development opportunities because they do not generate a sufficient surplus to provide income for the family and implement investments. The main function of small farms may be its social function and its income may only be an additional source of income for the farmer’s family. In order for Polish agriculture to be effective, intensive concentration processes are necessary.

A magyar étkezési tojástermelés gazdasági kérdései különböző tartástechnológiában, üzemméretben és termelési színvonalon

The aim of this study is to reveal the effects of housing systems, farm sizes and production levels on the economic indicators of Hungarian table egg production. This research is based on the farm-level cost and income data and the related weights of egg production farms between 2003-2015 from the Hungarian FADN database. These data were processed using descriptive statistics and correlation and regression analyses were performed to evaluate the correlations between each indicator. The results show that table egg can be more effectively produced using enriched cage system as opposed to barns. The unit cost of egg is lower in larger farm size, however, other factors also affect its value. The increase of production level is also in a positive correlation with the examined economic indicators.

Dynamic Comparison of the Fruit Sector and the Pollution Associated to Agriculture

Pollution in agriculture plays a major role. One of the sector affected by this phenomenon is the perennial plants, such as fruits sector. This sector is an important part of agricultural production in Romania, mainly because of the areas that have been dedicated; that is why the sector should be reconsidered because it could be one of the engines of the agriculture. This have to led to important efforts and increased attention in managing the opportunities offered by the development of the associations and producer groups involved. The present paper aims to address certain aspects of the national, macro-regional and European aspects of these fruits productions and the impact of the degree of pollution in agriculture. In this respect, data derived from the public databases dedicated to this field, namely Eurostat, the National Statistics Institute, DG Agriculture / FADN database and the Ministry of Agriculture, were used. The methods used to analyze and interpret the results are descriptive statistics, dynamics and comparisons between target areas and indicators. The results highlighted in the first part of the paper the Romania�s position upon the European average in what concern the fruit sector but also upon a competing country on the fruit market, Poland, which is considered to have a European top position.

Comparison of Agricultural Costs Prediction Approaches

The paper submitted offers an assessment and comparison of three approaches to agricultural cost inputs short-term forecasting, that have been proposed as possible alternatives to tackle the problem. The data applied have been taken from the Czech Statistical Office and the Farm Accountancy Data Network data sources. The forecasts were prepared using time series analyses based on methods of exponential smoothing and Box-Jenkins methodology of autoregressive integrated process moving averages. The proposed change index numbers for the 2012, 2013 and 2014 years from three approaches were confronted with the real development of costs time series as it was found in the statistical FADN survey results. The main conclusion drawn pointed out that, for the purpose of economic income estimation based on the FADN database, the cost prediction approach based on the same database, i.e., on time series analysis of the FADN panel data, is the most applicable one. However, it is recommended, too, to use other approaches for crops protection products cost and labour cost development.

Hungarian dairy and beef production sector technical efficiency comparsion using DEA

To examine and compare the technical efficiency of dairy sector and the beef sector, this research introduced the main indicators of milk and beef production in the world, EU and Hungarian aggregates. Based on the data it can be said that the milk and beef production of Hungary does not occupy any significant position in the world as well as in the European Union neither today nor even in the past. If Hungry must compete in the European counties and international market, their dairy sector must focus to increase of their production efficiency as the key breakthrough point. This paper we compared technical efficiency of both dairy and beef sectors in total, for the year 2014 and 2015 separately and based on the farm size. The specific objectives of the research are: comparing dairy and beef farms efficiency in Hungary. Based on the results, we can determine which sector in Hungary is more effective. The second objective is to compare the efficiencies of both the sectors in 2014 and 2015 separately and from the results we can determine which year was more effective in terms of production efficiency and the third objective of the research is technical efficiency comparison of certain economic sizes for both sectors. In the research, we used (KOVACS, 2009) deterministic (DEA) model adapted to the Hungarian dairy farms and beef farms. For the dairy farms milk and dairy products as well as meat (other income). The input factors originated from the domestic AKI - FADN database. Summarizing the results of the research it can be conclude that the dairy sector is more effective than the beef sector in Hungary. In terms of years compared 2014 was more effective for both sector as compared with 2015. In regards to the farm size almost the same result in evaluating the scale of efficiency, which means that large economies can in most cases, manage resources more efficiently than small farms. In the examined years, based on the results of the DEA model, the VRS technical efficiency of the test for these two years was 72.90% for the dairy farms and 63.60% for the beef farms, which means that the dairy sector is more efficient than the beef sector in Hungary. The VRS technical efficiency of the research was 82.10% in 2014 and 75.10% in 2015 for the dairy farms and 77.50% in 2014 and 68.90% in 2015 for the beef farms, which means that both the dairy sector and the beef sectors followed the same trend and were more efficient in 2014 compared to the efficiency in 2015. The large size dairy farms were most effective in Hungary in the examined period (90.90%). VRS technical efficiency for small farms is 88% and the total number of small, the technical efficiency medium farms was 72.80% For the beef sector VRS technical efficiency for small farms is 71.30% and the technical efficiency medium farms was 74.40% and 70% of the beef meat producing farms in Hungary are medium sized. So, the conclusion is the small size dairy farms have a higher VRS efficiency than the small size beef farms whereas medium sized beef farms had higher VRS efficiency than the medium size dairy farms. As a conclusion, both dairy and beef sectors in Hungary have the potential to overcome technology and knowledge constraints and attain the upmost attainable productivity level through improvements in; farmer volume of production i.e. output, beef cattle technologies, and advertising, and the efficiency of the technology transfer process.
 JEL Code: Q13

Agricultural income and prices. The interdependence of selected phenomena in Poland compared to EU-15 member states

The aim of this paper was to analyze the changes in various agricultural income measures in Poland since 2004 as compared to the situation of the EU-15 member states. Another objectivewas to examine the mentioned changes against prices. The main source of income data was the FADN database. Incomes of agricultural holdings in Poland are significantly lower than of those in most of the analyzed member states; however, this is the result of their smaller average area – their efficiency per hectare is relatively high. Polish agricultural holdings are also characterized by their comparatively small dependence on payments (although this is growing). Agricultural incomes are highly unstable, which refers to changes in price relations. This instability is particularly evident in countries with smaller farms and, thus, lower income per farm.