Financial Performance Of Farms Research Articles

ASSESSING CHANGES IN LAND RENT COSTS AND THEIR IMPACT ON THE FINANCIAL PERFORMANCES OF AGRICULTURAL HOLDINGS IN BULGARIA

The report analyses change in the cost of land rent on farms. It analyses the impact of rent expenditure on farm financial performance by farm type and regionally. It is argued that rising rent costs have a negative impact on the financial performance of farms and put pressure on their efficiency. This is more pronounced in areas specializing in intensive crop production, where larger agricultural areas are rented. The external factor costs exceed the farming overheads. There is a need for farmers to adopt a more pragmatic policy when renting agricultural land.

Profit and loss dynamics of aquaculture farming

Aquaculture's contribution has grown substantially in recent years, despite the fact that the price trend of several dominating species has remained constant when compared to input prices. Regardless of the fact that the nature of input usage varies considerably from farm to farm, productivity is improving but not to its maximum potential. Therefore, some farms are unable to make a profit by covering the production cost. For that purpose, this research evaluates the profit-making mechanisms and economic risk of pangasius and tilapia farming. A cross-sectional questionnaire-based survey was performed to collect data from 553 aquaculture farms in seven districts of Bangladesh, of which 275 were pangasius farms and 278 were tilapia farms. The financial performance of farms was evaluated using several descriptive and econometric analyses, while the Monte Carlo simulation method was employed to measure economic risk. Results revealed that the majority of pangasius and tilapia farms were profitable while a portion of farms was non-profitable. However, the lower market price of fish and inadequate inputs management were identified as the reasons for incurring loss at non-profit farms. Within the boundaries of economies of scale, this analysis also identified the optimum level of production for pangasius and tilapia. Meanwhile, sensitivity analysis suggested that lowering feed prices, maintaining feed quality, and raising fish prices would increase profitability on both farms. Besides, the simulation result showed that the risk of gaining profit was higher for pangasius than tilapia farming. Rational inputs use with proper extension support and increasing the output price to a reasonable limit would make pangasius and tilapia farming a more profitable venture.

Management practices and the financial performance of farms

PurposeFarm businesses in England are under pressure to intensify production sustainably while managing costs and meeting market demands. Commodity prices and support from Common Agricultural Policy (CAP) payments are important determinants of profitability. With the United Kingdom (UK) leaving the European Union (EU), revised policy will see farming more exposed to fluctuating commodity prices and financial support from Government more focused on encouraging environmental land management. The research reported here, investigated whether business management practices of farmers influences financial performance, and how policy could be tailored to better meet the needs of farm businesses.Design/methodology/approachRegression models were estimated for 862 Cereals, Dairy and Livestock farms in England using official data for 2011–2012, in order to assess whether different farm characteristics, business management practices (identified from a systematic review of 102 studies), knowledge acquisition indicators and manager experience had an effect on four different financial performance ratios. The financial performance of the top 25% of the sample was also compared to the bottom 25% in terms of use of business management practices.FindingsThe results show that business planning and benchmarking had a positive, statistically significant, effect on financial performance, as do business size and knowledge acquisition, albeit to a lesser extent.Originality/valueThe research reported here is the most extensive examination, to date, of the impact of management practices on the financial performance of farms. Thus, it sends strong policy recommendations.

A Comparative Techno-Economic Analysis of Organic and Conventional Nigella sativa L. Crop Production in Greece

Nigella sativa L. is considered to be an alternative crop offering innovative and high-quality products. A case study was implemented on an existing farm to determine the prospects of N. sativa production in Greece and to assess the economic outcomes of the cultivation of this crop under organic and conventional cropping systems. The total production cost of organic N. sativa seeds was 6.09 €/kg, while the cost of conventional seeds was 4.77 €/kg. The organic and conventional N. sativa seed selling prices were 17.04 and 12.01 €/kg, respectively. Moreover, the financial performance of farm is better after the introduction of N. sativa crop under organic cropping system, where the net profit increased by 63.8% compared to the initial profit of the farm, while the increase in the conventional was less at 49.2%. N

The Impact of Non-Agricultural Diversification on Financial Performance: Evidence from Family Farms in Italy

Diversification has been increasingly recognized as a rewarding farm strategy through which farmers produce on-farm non-agricultural goods and services. In doing so, farmers employ farm inputs (capital, labor, and land) in products other than agricultural goods, with the aim to sell them in the market and increase their income. While a significant body of literature has explored the drivers affecting the adoption of diversification activities, so far little attention has been given to the impact of such adoption on the technical and financial performance of farms. This article intends to provide empirical evidence on the impact of on-farm non-agricultural diversification on the financial performance of family farms in Italy, by using a nation-wide sample of agricultural holdings based on the Farm Accountancy Data Network (FADN) data. We estimated a fixed effects-instrumental variable panel model to deal with two potential sources of bias: self-selection in the diversification strategy and simultaneity, due to the fact that farmers often decide to diversify with outcome expectations in mind. Our findings show that in Italy the diversification strategy has a positive impact on the financial performance of family farms, which is second in magnitude only to that of land growth strategy. Our results also confirm the positive impact of efficiency and clarify that education has a positive return to investment when it is specialized in agriculture.

INCIDENCE OF TAXATION ON THE ECONOMIC AND FINANCIAL SITUATION OF FARMS IN THE EUROPEAN UNION

In EU countries, agricultural taxation is of major importance for the competitiveness of economic operators active in the agriculture sector. In many countries, the implementation of non-fiscal objectives plays an essential role in preferential tax regimes targeted at the agricultural sector. This is because the adopted tax regime concept impacts the targets, structure and intensification of agricultural production and, as a consequence, affects the economic and financial performance of farms and other aspects. The main purpose of this paper was to specify the quantitative relationships between taxation levels and the economic and financial situation of farms in European Union countries. The empirical study was composed of two stages. The first stage was a synthetic assessment of farm taxation levels in the EU. For that purpose, TOPSIS (Technique for Order Preference by Similarity to an Ideal Solution) was used to develop a synthetic indicator used as a basis to arrange the countries and identify the types of farm taxation levels. The types of EU countries grouped by farm taxation levels became the starting point for an analysis of the relationship between taxation and the farms’ economic and financial situation. The sub-indicators of the farms’ economic and financial situation were presented for the typological classes concerned, including sub-indicators of production potential, production intensity, incomes, farm subsidies, indebtedness and investments. The empirical study was based on 2013-2015 FADN data (average figures).

Assessing the Geographic Representativity of Farm Accountancy Data

The environment affects agriculture, via soils, weather, etc. and agriculture affects the environment locally at farm level and via its impact on climate change. Locating agriculture within its spatial environment is thus important for farmers and policy makers. Within the EU countries collect detailed farm data to understand the technical and financial performance of farms; the Farm Accountancy Data Network. However, knowledge of the spatial-environmental context of these farms is reported at gross scale. In this paper, Irish farm accounting data is geo-referenced using address matching to a national address database. An analysis of the geographic distribution of the survey farms, illustrated through a novel 2D ranked pair plot of the coordinates, compared to the national distribution of farms shows a trend in the location of survey farms that leads to a statistical difference in the climatic variables associated with the farm. The farms in the survey have significantly higher accumulated solar radiation values than the national average. As a result, the survey may not be representative spatially of the pattern of environment x farm system. This could have important considerations when using FADN data in modelling climate change impacts on agri-economic performance.

A nutrient budget for the Meat and Wool Economic Service of a New Zealand Class 1 high‐country farm model

Data on the physical and financial performance of farms are collected annually by the Meat and Wool Economic Service of New Zealand. We used the available data from 1968/69 to 1995/ 96 to calculate a nutrient balance for the model high‐country farm. Our nutrient budget takes account of the loss of nutrients in the form of livestock products (meat and wool), and losses or movement due to leaching and rainfall run‐off. Inputs of nutrients occur with the application of fertiliser, in rainfall, and by legumes fixing nitrogen. While there have been large fluctuations in both the quantity of nutrients applied as fertiliser and the quantity of nutrients removed, the whole‐farm nutrient balance has remained in credit each year for the whole of the time series for all major nutrients. Separate budgets for developed and undeveloped grassland showed that the nutrient balances were in credit for four of the five nutrients in each case; in developed grassland mean potassium balances were slightly negative while in the undeveloped grassland phosphorus balances were slightly negative. The annual surplus of calcium is significantly higher than for other nutrients. The results indicate a need for re‐interpretation of nutrient losses calculated for post‐European settlement as they affect understanding of the effects of grazing on the sustain‐ability of high‐country grasslands. Over the 30 years studied there appears to have been a cessation and probably some redress of nutrient losses from the system. This indicates that losses were greater earlier in the 150‐year period of European settlement than are indicated by the long‐term averages.