Farm Accounting Data Network Research Articles

Socio-Economic Characteristics of Producers and Economic Size Classes of Enterprises According To Typologies and Risk Attitudes in TR21 Region

The aim of this study was to determine the typologies of agricultural enterprises operating in the TR21 Region according to the Farm Accounting Data Network methodology and the risk attitudes of the producers. According to the typologies and risk attitudes of the enterprises, the socio-economic characteristics of the producers and the economic size classes of the enterprises were determined. As a result of sampling based on a 95% confidence interval and a 10% margin of error, the number of enterprises surveyed was determined as 334. While 63.77% of the enterprises were specialized in field crops, 25.45% engaged in mixed livestock and plant production. Additionally, 7.49% were specialized in pasture livestock and 3.29% were in the perennial plant farming group. In the enterprises examined, 55.09% of the producers were classified as risk-averse and 44.91% as risk-lover. Of the average land holdings, 71.25% was property and 28.75% was rented land. It was noteworthy that the land rental rate in risk-lover enterprises was higher than in risk-averse enterprises. It was concluded that risk-lover enterprises had higher production value in both plant production and animal production, and risk-averse enterprises were engaged with product and animal diversity as they avoided taking risks. On average, in risk-lover enterprises, 53.64% of the operating expenses were vegetative special expenses and 46.36% were animal special expenses. In risk-averse enterprises, the share of vegetative special expenses in total expenses was 47.15%, and the share of animal special expenses was 52.85%. Compared to the average of enterprises and all enterprise typologies, standard gross profit was found to be higher in risk-lover enterprises. In enterprise typology groups, the average ESU values of the enterprises varied between 10.88 and 33.80 ESU. According to enterprise typologies, risk-averse agricultural enterprises in specialized field crop farming and perennial plant farming were in the below-medium enterprise class, while other enterprise groups were in the above-medium enterprise class.

Does ecologization matter for technical efficiency in crop production? A case of Swedish agriculture

The effect of ecologisation on crop production performance in Sweden, measured as technical efficiency, was investigated by incorporating ecologisation into the production function and technical inefficiency determinant model. An unbalanced panel of data from the Swedish Farm Accounting Data Network (FADN), comprising 1944 observations on 346 crop farms 2009–2019, was used in stochastic frontier analysis. Ecologisation indicators considered were crop diversity index, organic farming, and environmental subsidies. The results showed that ecologisation affected the technical efficiency of crop production. Crop diversity index for the current year and the two preceding years had a positive effect on performance, with crop diversity index for current year in particular being positively associated with production performance of crop production. Organic farming was estimated to be negatively significantly associated with production performance. Rural subsidies were positively associated with production performance, but no association was found between environmental subsidies and production performance. Mean technical efficiency was 0.715, with higher values in southern Sweden than northern Sweden. These findings on the impact of ecologisation on arable farming can be useful when designing policies to encourage farmers to adopt ecologisation approaches.

The Farm’s Orientation towards Sustainability: An Assessment Using FADN Data in Italy

The new Common Agricultural Policy (CAP) for the period 2023–2027 commits farmers towards achieving ambitious environmental objectives through farm organization and management. This European agricultural policy has adapted to the contemporary challenges faced by the new model of agricultural development. It aims to enhance the contribution of agriculture to the EU’s environmental and climate objectives while providing better targeted support to small-scale farmers to promote farms’ competitiveness. The main objective of this paper is to describe Italian farms and classify them into groups based on their main characteristics, as well as to analyze their performance and behavior in terms of sustainability and competitiveness. The novelty and innovativeness of this study are found in the data used; a 2020 dataset from the Italian Farm Accounting Data Network (FADN) was used. The quality of FADN data in farm sustainability assessment is widely acknowledge in the literature. To achieve the purpose of this study, a multivariate analysis, in particular, the Principal Components Analysis (PCA), and a Cluster Analysis (CA) were applied. These analyses helped us to obtain the factorial axes which then enabled us to identify economic information on farms, and a better interpretation of farmers’ aptitude to undertake environmentally friendly actions. As a result, eight groups of farms were identified, and their characteristics and performance were described at Italian district level. The results of the study reflect the influence of European interventions towards encouraging farmers to use more environmentally friendly agricultural practices. Under this perspective, the findings contribute to the current debate on green architecture pursued by the future European agricultural policy.

Efficiency of using environmentally harmful inputs in field crop production in Bulgaria

There is a long-standing issue relating environmental to economic goals of agricultural production systems. An attempt to examine all possible aspects of this relationship is highly challenging and beyond the scope of the study. To gain insights into simultaneously improving the economic and ecological performance of the field crop farms, the research is focused on measuring the efficiency of using production inputs that have a large environmental impact. The paper investigates different field crop production regions in Bulgaria from 2014 to 2020 in an attempt to identify regional disparities. Such an investigation could help in consolidating policy measures addressing agro-environmental issues. By employing a mathematical programming approach (DEA method) on public data from the Farm Accounting Data Network and applying a non-parametric Kruskal–Wallis test over the obtained scores, no significant difference in the efficiency of using environmentally harmful inputs between six field crop production regions in Bulgaria is found. Regarding this finding and the Common Agricultural Policy strategies, recommendations for further research are proposed.

SOURCES AND DETERMINANTS OF CASH HOLDINGS IN THE AGRICULTURE OF CENTRAL AND EASTERN EUROPE COUNTRIES AND THE PERSPECTIVE OF THE FINANCIAL SECURITY OF POLISH FARMS

Ensuring business continuity requires maintaining financial liquidity and a certain level of cashholdings. This also applies to farms whose owners obtain funds from various sources, includingforeign capital. For this reason, the study aimed to identify sources and determine cash resourcesin farms in Central and Eastern European countries that are in the EU. Additionally, based ondetailed data from Polish farms, we assessed and compared the importance of cash holdings infarms characterised by a high level of financial security and those for which we identify thebankruptcy risk. Data for the research is from the Farm Accounting Data Network (FADN) databasefor 2013-2018 (for all the EU countries we consider). In the analysis touching upon bankruptcy riskin Polish farms, we used data from FADN-PL for 2010-2018. In the study, we used the panel method– weighted least squares method (WLS). We applied the dynamic approach to calculate the cashholdings. Inferences from our study indicate that budget support for farmers and sales value perfarm are the main sources and determinants of cash holdings in farms in New Member State of theEU. It should be underlined that the influence of budget support on cash holdings in Polish farmswas weaker than in other surveyed countries. Moreover, it was found that the level of indebtednesswas also an important factor that impacted cash holdings. On Polish farms, the impact of the debtlevel on cash holdings was negative, and in other countries – positive.The added value of work is identifying factors that affect cash holdings changes, so it is a dynamicapproach to cash holdings.

Impact of the War in Ukraine on Farm Profitability and the Attractiveness of Environmental Measures in Germany

The war in Ukraine has led to massive price increases for agricultural inputs and products. This paper examines the effects on farm profitability and the consequences for the adoption of eco-schemes on arable farms. We use the large farm sample of the German Farm Accounting Data Network (FADN) to identify the average income effects and to highlight the heterogeneity of the effects and their drivers. Building on these results, we analyse farms’ adaptation strategies with a focus on changes in nitrogen input intensity and participation in environmental measures (“eco-schemes”) of the new Common Agriculture Policy (CAP). Our results suggest that income effects are heterogeneous and subject to considerable uncertainty about the near future, and that many farms are likely to benefit from the short-term price effects of the war in Ukraine. Against this background, the efficiency of financial assistance under the EU crisis reserve would have benefited from a stronger focus on liquidity loans and ex-post hardship support. Our analysis also shows strong implications for participation in eco-schemes. The results cast significant doubts on the effectiveness and efficiency of the eco-schemes introduced by the new CAP, beyond the observed impact of the war in Ukraine.

Eco-efficiency and shadow price of greenhouse gas emissions in Lithuanian dairy farms: An application of the slacks-based measure

This paper estimates the eco-efficiency, shadow price and marginal abatement costs of dairy farms in Lithuania based on Farm Accounting Data Network (FADN) data from 2015, 2017, and 2019. The Slacks-Based Measure-Data Envelopment Analysis (SBM-DEA) model is applied for approximating the environmental production technology. Herd size, labour, feed costs, agricultural land, capital are considered as inputs, whereas milk production and greenhouse gas (GHG) emission are used as desirable output and undesirable output respectively. To reflect the heterogeneity of farms in terms of GHG emissions, farm-specific emission parameters are calculated. The results show that the mean eco-efficiency remained relatively stable, ranging from 0.55 to 0.59, and that the GHGs emission reduction potential ranged between 20% and 25% over the period considered. The shadow price was not stable and increased from 41.54 EUR/t CO2-eq in 2015 to more than 55.89 EUR/t CO2-eq in 2019. The potential GHGs emission reductions of 1% in 2015, 2017 and 2019 resulted in marginal abatement costs of EUR 41.58, EUR 54.74, and EUR 31.68 respectively. Results across farm size classes imply that farms with the highest GHG emission have the lowest marginal abatement costs, which means that policy actions should target the most polluting farms. The findings have also revealed that farms are more inefficient in terms of land use, capital, and feed as opposed to GHG emission. Our results suggest that the large dairy farms require more attention in regards to their environmental productivity improvements, whereas small farms are underperforming in feed use and capital utilisation. Thus, policy interventions are needed for improvement of farm productivity, yet they should also address the environmental dimension of sustainability as well.

The relationship between income and assets in farms and context of sustainable development.

The objective of this paper is to identify the relationship between farm income and assets within the European Union (EU) in the context of economic and environmental sustainable development. The scientific context is connected to economic theory (the recognition of the nature of such a relationship, as well as the determination of whether sustainable development acts as a stimulant or destimulant under these conditions). The Farm Accounting Data Network system was employed in the article. The econometric models were estimated by panel data based on the reported results of the farms operations in EU member states for the period of 2004–2018. Accordingly, the relationship between income and assets is positive and statistically significant, but not very clear in the group of surveyed farms. Moreover, economic sustainability was found to positively influences the relationship between income and assets. In contrast, the relationship between incomes and assets was weakened. The situation is brought about by the intrinsic growth in the value of the land, as well as by the growing importance of non-productive assets. Thus, farmers in EU countries are becoming wealthier in terms of the value of their assets but, this is not reflected directly in their income. The reason is the growing importance of environmental and social functions in the agriculture the European Union. Greater skills in asset management at farm level are, therefore, required to mitigate the situation.

The income-assets relationship for farms operating under selected models in Poland

The aim of this paper is to outline the relationship between income and assets when taking into account selected models of farms' functioning. The following farm models are examined: traditional, industrial, sustainable, and organic. Panel models were used that were based on the results of individual unpublished data for farms in Poland that undertook agricultural accounting according to the Farm Accounting Data Network (FADN) principles from 2004 to 2019. It was found that industrial farms had the clearest income-assets relationship, while traditional farms had the least clear relationship. The value of land, as a component of assets, was found to weaken the income-assets relationship. In consequence, the value of assets increased faster than income. Thus, the farmers are becoming wealthier in terms of the value of their assets, but this is not reflected in their income.

Adjusting eco-efficiency to greenhouse gas emissions targets at farm level – The case of Swedish dairy farms

The purpose of this paper is to adjust the measure of eco-efficiency to account for specific sustainability targets at farm level. We assess eco-efficiency and adjust the scores according to a target of absolute levels of greenhouse gas (GHG) emissions, using Data Envelopment Analysis (DEA) and data from Swedish dairy farms as an illustrative example. In particular, the Swedish target of net-zero emissions in 2045 and vision of a fossil free economy are used to specify the GHG emission target used for assessing the adjusted eco-efficiency scores. We test for possible factors associated with the adjusted and unadjusted eco-efficiency using OLS-regression analysis. The study is based on data from the farm accounting data network (FADN) in year 2016 and considers the environmental pressures nutrients and contribution to global warming. Adjusted as well as unadjusted eco-efficiency scores suggest that Swedish dairy farms are highly inefficient, and that economic value added could increase by 64% (adj) or 67% (unadj) for conventional farms and by 42% (adj) or 41% (unadj) for organic farms at the same level of environmental pressure. Findings further suggest that adjusting the scores towards absolute levels of GHG emissions increases industry average efficiency. Comparing the unadjusted and adjusted efficiency scores using Spearman rank correlation indicates similar efficiency rankings between the unadjusted and adjusted scores. However, findings also indicate that adjusted and unadjusted eco-efficiency scores are associated with different influencing factors, which lends empirical support to the idea that the two types of efficiency scores are conceptually different. Policy recommendations can be made based on insights from the second stage analysis of possible influencing factors. In particular, adjusted eco-efficiency is associated with higher intensity of farming defined as output per livestock unit. Further, adjusted eco-efficiency is associated with a higher number of livestock units in conventional farms and with lower levels of labour per livestock unit in organic farms.

Pasture-Based Livestock Economics under Joint Production of Commodities and Private Amenity Self-Consumption: Testing in Large Nonindustrial Privately Owned Dehesa Case Studies in Andalusia, Spain

In this study, we apply the hypothesis of private amenity which simulates that the nonindustrial livestock farmers are assured an ex-ante normal minimum operating profitability rate for their investments in the production systems of livestock species based on grazing in a case study of dehesas in Andalusia, Spain. The ex-post measurement in the Agroforestry Accounting System of the commercial operating opportunity cost incurred by the owners at the close of the period corresponds to the lower limit of the additional amount of noncommercial intermediate product of the private amenity self-consumption service (ISSnca). When the livestock farmers obtain an above-normal operating profitability rate, it is assumed that the absence of opportunity cost results in the free use of the private amenity and, therefore, the latter is a free (noneconomic) service with zero value. In the case study of dehesa farms, the results show that the commercial operating profitability rates at basic prices are below the normal. When the ISSnca is included, the operating profitability rates at social prices for the livestock species exceed by 30%, on average, the assumed normal rate of 3%. However, due to the decline in the prices of the inanimate fixed capital in 2010, the average total profitability rate for the livestock species is estimated at 0.1%, which differs substantially from the assumed normal operating profitability rate. These results are of interest with regard to the design and application of official economic accounts at farm scale, which, as in the European Commission Farm Accounting Data Network, omit the measurement of ISSnca.

Çanakkale‘de Buğday Yetiştiren Tarım İşletmelerinin Çiftlik Muhasebe Veri Ağı ( Çmva) Sistemine Göre Analizi

Çalışmanın amacı, Çanakkale İli, Kumkale Ovasında buğday yetiştiren tarım işletmelerinin Çiftlik Muhasebe Veri Ağı (ÇMVA) sistemine göre ekonomik büyüklüklerini ve standart sonuçlarını tespit etmektir. Bu sebeple, buğday üretiminin yoğun olarak yapıldığı Kumkale Ovası‘nda basit tesadüfi örnekleme yöntemine göre yapılan örneklemede 59 işletmeye anket yapılarak verilerin elde edilmesi sağlanmıştır. İşletmelerin ekonomik büyüklüklere göre sınıflandırılması 5 gruba göre yapılmıştır. Tarımsal işletmelerin %32,20‘si I. ekonomik büyüklük işletme grubunda, %15,25‘i II. ekonomik büyüklük işletme grubunda, %18,64‘ü III. ekonomik büyüklük işletme grubunda, %16,95‘i IV. ekonomik büyüklük işletme grubunda ve %16,96‘sı V. ekonomik büyüklük işletme grubunda bulunduğu tespit edilmiştir. Araştırma kapsamında bulunan işletmelerden elde edilen sonuçlara göre, ekonomik büyüklükleri 2,14 ve 98,86 ESU değeri arasında değişmektedir. İşletmeler ortalaması 24,03 ESU‘dur. Tarımsal işletmelerin ekonomik büyüklük gruplarına göre toplam gelir 32.669,96 TL ile 1.008.939,30 TL, brüt işletme karı 7.953,32 TL ile 754.769,83 TL, işletme net katma değeri 4.184,66 TL ile 736.240,61 TL, net işletme aile geliri -13.049,82TL ile 631.720,36 TL arasında değişmektedir. I. ve II. ekonomik büyüklük grubundaki işletmelerde net işletme aile değeri negatif olarak bulunmuştur. Analiz edilen işletmelerde ekonomik büyüklük gruplarına göre karlılığın arttığı tespit edilmiştir.

RENTOWNOŚĆ EKONOMICZNA WEDŁUG WIELKOŚCI GOSPODARSTWA W ESTOŃSKICH GOSPODARSTWACH RODZINNYCH

Small farms are subject to a wide range of influences on their viability including economic, policy and regulatory drivers as well as internal farm household drivers of change. Small farms have experienced a decline in numbers compared to large farms. The main task of the paper is to determine the share of viable farms of different size groups in Estonia, exploring the factors that are associated with economically viable farms. For determination of the share of viable farms of different size groups the opportunity-cost-based approach is used. Farm viability is estimated by using the data from the Estonian Farm Accounting Data Network. The results indicate that the economic viability of Estonian farms has slightly increased, but the share of viable farms has decreased. Smaller farms’ economic viability is declining, many of them are economically vulnerable. Smaller farms’ capability to survive and develop by using the available resources is lower compared to larger farms.

The expansion and changing cropping pattern of rapeseed production and biodiesel manufacturing in Poland

Abstract Poland depends on imports for its transportation fuel supply and EC renewable energy policy encourages rapeseed conversion into biodiesel. This paper discusses changes in winter rapeseed production following changes in sugar policy, decreased dependence on potato use as feed and food, and the EU 2007–2009 support program for production of oil seeds as biofuel feedstock. We examine whether farm cost efficiency scores differ across Poland's 16 regions between those growing rapeseed and all other farms using Farm Accounting Data Network (FADN) data. Farms growing rapeseed are more cost efficient in all regions, and while regions with long experience in growing rapeseed still dominate the production, rapeseed production is expanding into new areas. Subsidies offered under the EU support program likely initiated expansion and the expansion continues after the program expired. Less efficient farms can be encouraged to enter rapeseed production through farm outreach services and competitive prices in relation to other crops since the available land permits further expansion of this biodiesel feedstock production.

Explaining the Process for Conversion to Organic Dairy Farming in Sweden: An Alternative Modelling Approach

To date, the process of conversion to organic farming has been analysed as a choice between only two alternatives, conventional versus organic farming. However, the conversion process in the EU is a two-tier decision, which brings the possibility of a nested structure between mixed and organic farming. In the context of Sweden, where the conversion investment is flexible, we attempted to identify economic determinants of the organic conversion process. For that purpose, we applied the nested Logit random utility maximisation (NLRUM) model to data from the Swedish farm accounting data network for 2002-2012. The analysis showed that milk prices, milk yield and environmental support payments play a significant role in the organic conversion process. As expected, a decrease in conventional milk prices would induce conventional farms to convert to organic production. The scale of conversion to organic farming was more pronounced among dairy farms located in regions with higher environmental support payments, and in regions endowed with more pasture land and leys.

A grassland strategy for farming systems in Europe to mitigate GHG emissions—An integrated spatially differentiated modelling approach

This paper assesses the impact of an EU-wide policy to expand grassland areas and promote carbon sequestration in soils. We use the economic Common Agricultural Policy Regionalized Impact (CAPRI) model, which represents EU agriculture using 2450 mathematical programming farm-type models in combination with the biogeochemistry CENTURY model, which provides carbon sequestration rates at a high resolution level. Both models are linked at the NUTS3 level using location information from the Farm Accounting Data Network. We simulated a flexible grassland premium such that farmers voluntary and cost efficiently increase grassland area by 5%. We find that the GHG mitigation potential and the costs depend on carbon sequestration rates, land markets and induced land use changes, and regional agricultural production structures. In Europe, the calculated net effect of converting 2.9Mha into grassland is a reduction of 4.3 Mt CO2e (equivalents). The premium amounts to an average of EUR 238/ha, with a total cost of EUR 417 million for the whole EU. The net abatement costs are based on the premium payments, and account on average EUR 97/t CO2e. However, substantial carbon sequestration (28% of total sequestration) can be achieved at a rate of EUR 50/t CO2e. Carbon sequestration would be most effective in regions of France and Italy and in Spain, the Netherlands and Germany. Larger farms and farm-types specialized in ‘cereals and protein crops’, ‘mixed field cropping’ and ‘mixed crop-livestock’ farming systems have the highest mitigation potential at relatively low costs.

Evaluation of the reproduction processes in farms in Poland in context of the environmental and economic sustainability

The main objective of this paper is the recognition of the processes of reproduction of farms in Poland considering the environmental and economic sustainability. In the article, one use the results of agricultural farms engaged in agricultural accounting in accordance with the principles of farm accounting data network (FADN) of the EU, and time range of the researches refers to the years from 2004-2011. In the period of economic recovery in agriculture, farms analysed actively reproduced fixed assets. This points to the important role of economic considerations in shaping of the reproduction processes. The study shows that the environmentally and economically sustainable farms achieve a higher level of reproduction. Farms able to be developed in a sustainable way and thus achieve extended reproduction require appropriate size, usually in the range of 40-55 ha.

Koncentracja i produktywnosc gospodarstw specjalizujacych sie w produkcji zwierzecej i wielokierunkowych w nowych i starych panstwach czlonkowskich UE. Podejscie regionalne

The research was based on the data contained in the Farm Accounting Data Network and covers the period of the first six years following the extension of the European Union in 2004. The research units were averaged farms representing 80 regions belonging to fifteen countries of the EU-15 and the ten new member states. The total number of units representing these regions was 333, of which 226 and 107 were livestock farms and mixed farms, respectively.The aim of this paper was to indicate (i) whether the concentration of mixed farms is faster than the specialist livestock farms and whether it is more intensive in the regions of the new UE states than in the old ones, and (ii) whether farms from the new regions improve productivity faster than the farms of the old regions irrespective of their production profile. The analysis was based on the regression and data envelopment method with estimation of the Malmquist total factor productivity (TFP)index and its components.As to the first question, the main findings indicate, on average, a decrease of the total labor input, but only in the new regions, an increase in the utilized agricultural area of farms both in the old and new regions, although larger in the new member countries,and the increase of stocking density in livestock farms of the old regions and only in mixed farms of the new regions.The answer to the second question is less optimistic, because in the analyzed period,especially after 2007, pure technical efficiency decreased in both types of farms both in the old and new regions. In turn, the indexes of scale and technical efficiency change indicated some improvements. However, they concern technical efficiency of both types of farms from the old regions and only scale efficiency of mixed farms from the new regions.Varied changes in individual TFP components resulted in differences of the Malmquist indexes. Their values indicate a decrease by 3% for farms from the new regions and by 1% for mixed farms from the old regions. This confirms the conclusion that farms from the old regions better endure a generally difficult period of stagnation.We observed that, the financial standing of all farms, except for livestock farms from the old regions, deteriorated, but those from the new regions suffered greater losses.

DEVELOPMENT OF PRODUCTIVITY OF PIG FARMS IN GERMANY

The development and change of productivity, as well as of its influencing factors, is of interest in economic research. In this paper we analyse the development of productivity in pig farms in Germany. Balanced farm panels are selected from the German Farm Accounting Data Network (FADN). As a productivity measure we use the Färe-Primont Index proposed by O’Donnell. Results shows a rather constant productivity level of pig fattening farms and decreasing productivity of farms specialized in piglet production. Due to cyclical pig prices the variation of productivity is rather high in pig farms. Significant scale effects are identified with highest TFP levels of large sized farms. The variation of income over time is much more pronounced than of productivity, which might partially be determined by the rather high aggregation of output and input variables used for the productivity calculations.

The role of small farms in Italy: between subsistence and diversification

The paper explores the role of small farms in Italy, by analyzing the significance of on-farm farming and non-farming activities on the basis of the Italian FADN database (Farm Accounting Data Network), covering the period from 2003 to 2009. Small farms were classified into six mutually exclusive and homogeneous groups (two groups of micro-farms and four groups of small farms) according to their degree of diversification and differentiation of production and, for each group, the economic sustainability as well as the role of public support were assessed through a set of indicators. The results of the analysis confirm the non-economic role of micro-farms, whose justification needs to be rather found in territorial and social objectives. With regard to the small farms, the results show that, even though conventional profiles are still predominant, a significant number of small farms shows some sort of interest towards diversification and multifunctionality. The majority of farms in the panel focused on the strategy of differentiation through quality products, which is a key aspect for Italian agriculture performance and competitiveness. Finally, the indicators on public support seem to confirm the complementary role of rural development policies to the first pillar of the CAP, by highlighting the need of implementing more effective policy tools aimed at preventing the exit of small farms from the sector, also by supporting the entrepreneurial skills necessary to react and reverse the marginalization process.