Skip to main navigation menu Skip to main content Skip to site footer
FrancoAngeli Journals

Regular Articles

Vol. 23 No. 3 (2021): Current use and new perspectives for the Farm Accountancy Data Network

The Role of Neighborhood Effects on Investing Dairy Farms

DOI
https://doi.org/10.3280/ecag2021oa12778
Submitted
aprile 27, 2021
Published
2021-12-31

Abstract

For the traditionally small-scaled Swiss agriculture, large economies of scale exist in dairy farming. Farm expansion is typically linked to a barn investment, but the opportunities for expanding the necessary acreage are limited. To enable an investing farm to expand its acreage, neighboring farms must shrink or phase out. Hence, the question arises how neighboring farms affect investing farms. To address this farm management question, we used a set of Farm Accountancy Data Network data and government data on subsidized projects. We combined this dataset with agricultural census data to assess the concentration of agricultural land as well as the number of subsidized investments within the municipality of an investing farm. By means of random-effects models for agricultural income per family working unit on the one side and herd size change on the other, we found two effects of neighborhood effects. A high number of subsidized projects and a high concentration of land (Gini coefficient) limited the growth in herd size due to scarcity of available land. At the same time, neighborhood positively influenced the management, leading to a higher agricultural income per family working unit. The results illustrate that an extension of the Farm Accountancy Data Network data, which in itself is extensive, can further help to address specific research questions.

References

  1. Baltagi, B.H., Bresson, G. & Pirotte, A. (2003). Fixed effects, random effects or Hausman-Taylor? A pretest estimator. Economics Letters, 79(3), 361-369, doi: 10.1016/S0165-1765(03)00007-7.
  2. Bewley, J., Palmer, R.W. & Jackson-Smith, D.W. (2001). An overview of experiences of Wisconsin dairy farmers who modernized their operations. Journal of Dairy Science, 84(3), 717-729, doi: 10.3168/jds.S0022-0302(01)74526-2.
  3. BLW (2020). Agrarpolitisches Informationssystem agis. Bern, Switzerland: Bundesamt für Landwirtschaft (BLW). Retrieved March 30, 2021. -- www.blw.admin.ch/blw/de/home/politik/datenmanagement/agate/agis.html.
  4. Bundesrat (1991). Bundesgesetz über das bäuerliche Bodenrecht. Bern, Switzerland.
  5. Bundesrat (1998a). Verordnung über die Direktzahlungen an die Landwirtschaft. Bern, Switzerland.
  6. Bundesrat (1998b). Verordnung über die Strukturverbesserungen in der Landwirtschaft. Bern, Switzerland.
  7. Bundesrat (1998c). Bundesgesetz über die Landwirtschaft. Bern, Switzerland.
  8. Chavas, J.-P. (2001). Structural change in agricultural production: economics, technology and policy. In Gardner, B.L. & Rausser, G.C. (Eds.). Handbook of agricultural economics, Vol. 1, Part A (pp. 263-285). Amsterdam, The Netherlands: Elsevier.
  9. Deininger, K. & Squire, L. (1998). New ways of looking at old issues: inequality and growth. Journal of Development Economics, 57(2), 259-287, doi: 10.1016/S0304-3878(98)00099-6.
  10. Durlauf, S.N. (2004). Neighborhood effects. In Henderson, J.V. & Thisse, J.E. (Eds.). Handbook of Regional and Urban Economics, Vol. 4 (pp. 2173-2242). Amsterdam, The Netherlands: Elsevier.
  11. Feinerman, E. & Peerlings, J. (2005). Uncertain land availability and investment decisions: the case of Dutch dairy farms. Journal of Agricultural Economics, 56(1), 59-80, doi: 10.1111/j.1477-9552.2005.tb00122.x.
  12. Finger, R., Briner, S. & Peerlings, J. (2013). Projekt Evaluation „Milchmarkt“ – Expost Evaluation der Zulagen für verkäste Milch. Projektbericht im Auftrag des Bundesamtes für Landwirtschaft. Bern, Switzerland. Retrieved. -- https://ext.dnsbp-p.admin.ch/NSBExterneStudien/418/attachment/de/1619.pdf.
  13. Gazzarin, C. & Hilty, R. (2002). Stallsysteme für Milchvieh: Vergleich der Bauinvestitionen. fat -Bericht Nr. 586.
  14. Greene, W. (2011). Fixed effects vector decomposition: a magical solution to the problem of time-invariant variables in fixed effects models? Political Analysis, 19(2), 135-146, doi: 10.1093/pan/mpq034.
  15. Hemme, T. (2017). Dairy report 2017 for a better understanding of the dairy world. Kiel, Germany: International Farm Comparison Network (IFCN).
  16. Hennessy, T. & O’ Brien, M. (2008). Is off-farm income driving on-farm investment? Journal of Farm Management, 13(4), 235-246.
  17. Hoop, D. & Schmid, D. (2015). Zentrale Auswertung von Buchhaltungsdaten – Grundlagenbericht 2014. Ettenhausen, Switzerland: Agroscope.
  18. Huettel, S. & Margarian, A. (2009). Structural change in the West German agricultural sector. Agricultural Economics, 40(S1), 759-772, doi: 10.1111/j.1574-0862.2009.00413.x.
  19. Huettel, S. & Jongeneel, R. (2011). How has the EU milk quota affected patterns of herd-size change? European Review of Agricultural Economics, 38(4), 497-527, doi: 10.1093/erae/jbq050.
  20. Jan, P. & Schmid, D. (2015). Wegleitung zum Merkmalskatalog der Zentralen Auswertung von Buchhaltungsdaten. Switzerland: Agroscope, Institut für Nachhaltigkeitswissenschaften. Retrieved July 15, 2021 -- www.agroscope.admin.ch/agroscope/de/home/themen/wirtschaft-technik/betriebswirtschaft/zabh/referenzbetriebe/methodik.html.
  21. Kramer, B., Schorr, A., Doluschitz, R. & Lips, M. (2019a). Survival analysis for the adjustment phase following investment in Swiss dairy sheds. Agriculture, 9(11), 238, doi: 10.3390/agriculture9110238.
  22. Kramer, B., Schorr, A., Doluschitz, R. & Lips, M. (2019b). Short and mediumterm impact of dairy barn investment on profitability and herd size increase in Switzerland. Agricultural Economics – Czech, 65, 270-277, doi: 10.17221/170/2018-AGRI CECON.
  23. Mack, G. (2012). Spatial expansion of farm types and neighborhood influence – conversions to suckler cow farms in Switzerland. Yearbook of Socioeconomics in Agriculture, 5(1), 153-175.
  24. Manski, C. (1993). Identification of Endogenous Social Effects: The Reflection Problem. Review of Economic Studies, 60, 531-542. doi: 10.2307/2298123.
  25. Margarian, A. (2010). Nachbarschafts- und Konjunktureffekte: Zur Aufgabewahrscheinlichkeit landwirtschaftlicher Betriebe. 50. Jahrestagung Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V. 2010; 29.09.-01.10.2010. Braunschweig, Germany.
  26. Meier, B. (2000). Neue Methodik für die Zentrale Auswertung von Buchhaltungsdaten an der FAT. Tänikon, Switzerland: Eidgenössische
  27. Forschungsanstalt für Agrarwirtschaft und Landtechnik (FAT).
  28. Meyre, S. (2016). Landwirtschaft und Ernährung – Taschenstatistik 2016. Neuchâtel, Switzerland: Bundesamt für Statistik.
  29. Mittenzwei, K. & Mann, S. (2017). The rationale of part-time farming: empirical evidence from Norway. International Journal of Social Economics, 44(1), 53-59, doi: 10.1108/IJSE-10-2014-0207.
  30. Mundlak, Y. (1978). On the pooling of time series and cross section data. Econometrica, 46(1), 69-85. doi: 10.2307/1913646.
  31. Personal Communication. (2017). Swissmelio conference. Olten, Switzerland.
  32. Rice, P. (2015). Neighbourhood effects in economics: A review. Mimeo, Spatial Economics Research Centre-lse and Liverpool University. Retrieved July 27, 2021. -- www.citiseerx.ist.psu.edu.
  33. Richards, T. & Jeffrey, S. R. (1997). The effect of supply management on herd size in Alberta dairy. American Journal of Agricultural Economics, 79(2), 555-565, doi: 10.2307/1244152.
  34. Sauer, J. & Zilberman, D. (2012). Sequential technology implementation, network externalities, and risk: the case of automatic milking systems. Agricultural Economics, 43(3), 233-251, doi: 10.1111/j.1574-0862.2012.00579.x.
  35. Schick, M. & Hartmann, W. (2005). Arbeitszeitbedarfswerte in der Milchviehhaltung. Landtechnik, 60(4), 226-227, doi: 10.15150/lt.2005.1224.
  36. Schmidtner, E., Lippert, C., Engler, B., Häring, A.M., Aurbacher, J. & Dabbert, S. (2012). Spatial distribution of organic farming in Germany: Does neighbourhood matter? European Review of Agricultural Economics, 39(4), 661-683, doi: 10.1093/erae/jbr047.
  37. SNB (2021). Kassazinssätze von Eidgenössischen Obligationen für ausgewählte Laufzeiten. Zurich, Switzerland: Schweizerische Nationalbank (snb ). Retrieved February 18, 2021. -- https://data.snb.ch/de/topics/ziredev#!/chart/rendeidglfzch.
  38. Vollrath, D. (2007). Land distribution and international agricultural productivity. American Journal of Agricultural Economics, 89(1), 202-216, doi: 10.2139/ssrn.694768.
  39. Zimmermann, A. & Heckelei, T. (2012). Structural change of European dairy farms – a cross-regional analysis. Journal of Agricultural Economics, 63(3), 576-603, doi: 10.1111/j.1477-9552.2012.00355.x.

Metrics

Metrics Loading ...