Agnar Hegrenes
OAP
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The study aims to estimate the effects on the sheep farm economy of reducing grazing levels necessitated due to possible overgrazing by sheep on two important mountainous range pastures in southwest Norway. The pasture range in Setesdal Vesthei is grazed by sheep from distant farms located at Jæren (south of Stavanger), while south-western Hardangervidda is grazed by sheep from local farms and distant farms located along the coast. Farmers utilizing the pasture areas combine sheep with dairy cows, off farm work or businesses, while the local farms combine it with orchards. A Linear Programming (LP) model for specialized sheep farms based on farm records has been developed to study effects of reaching various grazing capacity levels. Reducing the number of sheep in Setesdal Vesthei by 10 percent would lower farm income per breeding stock animal with € 15 to € 119 and with € 35 to € 211 for Hardangervidda. The decrease in annual income will range from € 15,00 to € 119,00 in total for the farms using Setesdal Vesthei. The economic effects depend much on meat production per ewe. Replacing unilateral sheep grazing with a mixed system involving suckling goats and heifers is discussed to deal with the problems of encroachment and increasing elevation of the alpine tree-line.
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The study aims to estimate the effects on the sheep farm economy of reducing grazing levels necessitated due to possible overgrazing by sheep on two important mountainous range pastures in southwest Norway. The pasture range in Setesdal Vesthei is grazed by sheep from distant farms located at Jæren (south of Stavanger), while south-western Hardangervidda is grazed by sheep from local farms and distant farms located along the coast. Farmers utilizing the pasture areas combine sheep with dairy cows, off farm work or businesses, while the local farms combine it with orchards. A Linear Programming (LP) model for specialized sheep farms based on farm records has been developed to study effects of reaching various grazing capacity levels. Reducing the number of sheep in Setesdal Vesthei by 10 percent would lower farm income per breeding stock animal with € 15 to € 119 and with € 35 to € 211 for Hardangervidda. The decrease in annual income will range from € 15,00 to € 119,00 in total for the farms using Setesdal Vesthei. The economic effects depend much on meat production per ewe. Replacing unilateral sheep grazing with a mixed system involving suckling goats and heifers is discussed to deal with the problems of encroachment and increasing elevation of the alpine tree-line.
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The Norwegian agri-food sector is under transformation, and as part of this the contractual relations between the various parts of the sector are rapidly changing. The purpose of this paper is to answer two questions: • How can these changes be explained? • What changes can be expected in the future? The analysis is based on insight from new institutional economics. The starting point is that the relations between agents depend on institutions and governance structure. Changes in one or both will influence the contractual relations. The paper focuses on relations between primary producers and first hand buyers of agricultural products. However, since changes at this part of the value chain is influenced by what happens down-stream, we take developments in down-stream parts of the chains into account as far as we find it relevant. […]
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At present there are nearly 20 000 milk producers in Norway, and approximately 10 per cent of them are members of the Norwegian Dairy Financial Recording (NDFR). The NDFR is an important basis for production and financial advice given by the dairies. There is a great interest among milk producers and advisors in comparing results from different farms to find out why some are doing well and some are doing not so well, and to learn from those doing well. Gross margin (GM) per litre of milk produced is the traditional indicator for efficiency. This data, as other data on milk production, indicate that there is a wide variation in gross margin per litre of milk between farms with seemingly similar conditions for producing milk. This is interpreted as a potential for improving the efficiency of many producers. However, for many reasons gross margin per litre of milk is not an ideal indicator. A new version of the NDFR contains more information, for instance information on fixed costs of roughages produced on the farm. It is hoped that the new version of the NDFR makes it a better tool for improving the profitability of milk production. In an ongoing project we try to use the NDFR to analyse who are doing well and why. We use a combination of Data Envelopment Analysis (DEA) and statistical analysis. For each farm we produce an efficiency index, and then we apply statistical methods to find factors that can explain the index. So far we have only very preliminary results. Management factors are important, but the NDFR data-base have very little information on management factors. It is planned to collect such data for a sample of farmers and include that in the study at a later stage.
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Editors
Agnar HegrenesAbstract
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A model is presented to investigate the optimal economic life cycle of grass leys with winter damage problems in northern Norway and to determine the threshold of winter damage before it is profitable to reseed. A two‐level hierarchic Markov process has been constructed using the MLHMP software (the MLHMP software and the plug‐in constructed for this model are available for download at http://www.prodstyr.ihh.kvl.dk/software/mlhmp.html). The model takes uncertainty concerning yield potential, damage estimation and weather‐dependent random fluctuations into account. A Kalman filter technique is used for updating the knowledge of yield potential and damage level. The application of the model is demonstrated using data from two commercial Norwegian farms. As parameter estimates vary considerably among farms, it is concluded that decision support concerning optimal economic life cycle of grass leys should be done at farm level. The results also show the importance of using a flexible dynamic replacement strategy. Use of the model for specific farm situations is illustrated.
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Farmers in northern Norway have experienced severe winter damage on grassland rather frequently, especially on flat areas and peat soils in regions with an unstable winter climate around zero degrees Celsius. Traditional drainage with drainpipes is normally not sufficient to prevent such damage in these areas. During the past two decades the use of open ditches and surface grading has become the main method of reclaiming and draining peat land. A new heuristic stochastic dynamic analysis method for problems like this, combining simulation and optimisation, is used to explore the profitability of surface grading of peat soils. This analysis indicates that the year in which a ley should be reseeded depends on stage in the growth curve when eventually the winter damage happens as well as on the severity of the damage. Given the present acreage subsidy payment, surface grading is normally profitable from a farmers point of view.
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Farmers in northern Norway have experienced frequent winter damages of grassland, especially on flat areas and peat soils. The use of open ditches and surface grading has become the common method to drain such fields and for reclaiming new land with such characteristics. We designate this as surface grading in this paper. An investment analysis is carried out to explore the profitability of this method. This analysis indicates that the method is profitable from the farmers’ point of view. However, the conclusions are sensitive to changes in crop yields and the value of the yields. The cost of a winter damage and thus an unplanned reseeding is high for young leys, but is small for leys approaching the optimal replacement age.
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This report focuses on agriculture and its impacts in rural areas. Agriculture is an important activity in the Norwegian periphery, directly and indirectly. A deregulation of agriculture will most probably have negative impacts on agricultural production and employment. This, in turn, will have negative impacts on other sectors. Since agriculture is overrepresented in the periphery, and there are few alternative sources of employment, reduced activity in agricultural can lead to increased centralisation. This can be a problem since the relatively low population densities already imply a danger of depopulation in the periphery. Some motivations for regulating agriculture are based on the sector's importance in the periphery. Regulations are also motivated by other facts. It is very difficult to distinguish precisely between rurality and other motivations. However, part of the motivation is agricultural production itself, or aims that can be deducted from production. Distribution of income is an example of this. From a theoretical point of view, subsidies should, in order to be as efficient as possible, be directed directly towards the problems they are meant to cure. If the aim for granting agricultural support is rural development and not agricultural production, then it is better to grant subsidies that do not depend upon production. Rural development (RD) can be thought of as complementary to agricultural production (AP): (*) RD = f(AP), f'(AP) > 0 This means that you get more RD if AP increases, and less RD if AP decreases. By subsidising AP, you will automatically get more RD. The function (*) does not, however, say anything about the efficiency of subsiding AP for gaining RD, compared to using the same amount of subsidies directly at gaining RD. The function does not describe whether subsidies that are production dependent are preferable to non-production subsidies from a rural development point of view. Using the function (*) and the fact that the secondary effects of reducing agricultural subsidies may be substantial in the peripheries, one may argue, however, that agriculture is important and that agricultural production is an essential industry for rural development. We would also like to underline the fact that agricultural has several non-food impacts and that multifunctionality is much more than rural development. It is especially difficult to distinguish between «rural development» and «cultural landscape». The relationship between them should probably be discussed further.