Institut für Landwirtschaftliche Betriebslehre

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Agro-economic policy analysis with the regional production model ACRE : a case study for Baden-Wuerttemberg
(2011) Henseler, Martin; Dabbert, Stephan
Since its introduction the Common Agricultural Policy (CAP) of the European Union (EU) has undergone several reforms in order to adapt policy instruments and enable the agricultural sector to fulfil multiple functions with respect to economic, supply and environmental objectives. In the German federal state Baden-Wuerttemberg agricultural production is characterized by regional heterogeneity. Therefore it is important to estimate the impacts resulting from changes in the CAP at a detailed regional level. In this study the agricultural policy model ACRE (Agro-eConomic pRoduction model at rEgional level) has been used to simulate different policy scenarios and to analyze regional economic, production and environmental impacts. In particular the study aims to address the following research questions: What are the regional impacts of different policy measures in the German federal state Baden-Wuerttemberg with respect to economic, production and environmental objectives? How suitable are the simulated policy measures for achieving the policy objectives of the CAP 2003 reform, as well as the objectives of subsidy reduction, promotion of energy crop production, reduction of environmental pollution and promotion of agro-environmental measures? How suitable is the regional supply model ACRE as a tool for policy analysis and policy decision support? In order to address the research questions, ACRE has been updated, adapted and extended to simulate agricultural production in the federal state Baden-Wuerttemberg at NUTS3 level. The policy scenarios simulated in this study are defined to cover recent discussions on the future development of the CAP and their results are analysed according to a regional framework for NUTS3 counties, farm types and the complete model region. The simulation of the reference year (REF) implies the policy reform Agenda 2000 in the simulation year 2000. Thus, REF represents the observed situation of regional agricultural production on whose statistical data ACRE is calibrated. The scenario CAP2003 simulates the policy measures of the CAP 2003 reform in the simulation year 2015. Assumptions of increased yields and prices as well as harmonized direct payments for arable land and grassland result in an increase in income as well as in an increase of subsidy volume. In the entire model region Baden-Wuerttemberg cereal production increases while the production of fattening bulls and pigs decreases. Increases in crop production intensity result in an increase in environmental pollution. The scenario CAP2003 is used as the baseline scenario to compare the results of simulated policy scenarios which are delineated in the following paragraphs only with the most important results for the complete model region Baden-Wuerttemberg. In two subsidy reduction scenarios the simulated policy instruments aim to reduce subsidy volume by reducing Pillar 1 payments by 60% and by shifting 70% of the money from Pillar 1 to Pillar 2 respectively. Both scenarios result in the positive impact of a decrease in subsidy volume, but show a negative impact, especially an increase of abandoned land. In two energy crop scenarios the production of energy maize is simulated under the assumption that different situations in energy policy and energy markets result in different competitiveness between production of energy maize and food. In both scenarios energy crop production partially replaces cereal production, although the extent varies according to the high or small level of competitiveness between production of energy maize and food. Impacts on agricultural income and subsidies are small while increased environmental pressure is expected in the event of a significant expansion in energy crop production. Two nitrogen reduction scenarios simulate policy measures according to the water framework directive (WFD) and the OSPAR convention. The scenario according to the WFD (limitation of organic nitrogen input to a maximum of 170kg nitrogen per hectare) does not result in any impacts. In contrast, the scenario according to the OSPAR convention (reduction of nitrogen input quantities by 10%) results in a decrease in environmental pollution and is accompanied by a reduction of income and reduction of agricultural production under land abandonment. In the scenario of mandatory agri-environmental measures (AEM) it is assumed that the area with applied AEM is extended. The increase of AEM area results in a decrease in cereal production and a reduction of environmental pollution, while income decreases only slightly. Two combined scenarios simulate a mix of different policy and market situations which provoke an intensive and an extensive agricultural production. The results of these scenarios illustrate the interaction of the single policy measures. The measures of subsidy reduction have similar reducing impacts on income and subsidy volume in both scenarios. In the intensive production scenario high competitive energy crop production and a less restrictive nitrogen restriction result in a compensation effect of land abandonment by extension of energy crop area. In the extensive production scenarios, less competitive energy crop production and a high restrictive nitrogen constraint result in reduced agricultural production, increased land abandonment and reduced environmental pressure. In order to evaluate the impact of the simulated policy measures on the achievement of policy objectives the results of all scenarios are compared and ranked according to their impact on the policy objectives. The analyses of the model results show impacts of policy measures which are likely to be expected. However, the analyses at NUTS3 as well as farm types' level reveal that the impacts of the policy measures can be regionally quite different. Thus the detailed regional model results clearly show that (and where) the implementation of agricultural policy measures requires a regional specific evaluation and monitoring. In order to discuss the study with regard to the methods applied and the outcome, a final strengths and weaknesses analysis was conducted. The analysis highlights the strengths of the study (e.g. the model validation, the regional analysis of different policy scenarios, the possibility of cooperation with regional stakeholders). The validation and the results of the study also show that ACRE is a suitable tool for regional agricultural policy analysis and policy decision support. Supplementary work could help to overcome single shortcomings and caveats and to further develop the model. However, ACRE can already be used now as a useful tool for the regional agricultural policy analysis of the CAP in Baden-Wuerttemberg.
Economic analysis on the agro-environmental impacts of management and policy measures in the North China Plain
(2011) Kühl, Yannick; Zeddies, Jürgen
The increased use of agricultural inputs like fertilizers and pesticides led to wide-spread negative environmental impacts of agriculture in the North China Plain (NCP). The context of this research is that, due to continued growth of the population and the economy, the demand for agricultural products in China is gradually rising. However resources like land and water are scarce in China. Therefore new strategies need to be developed which do not put additional strains on the environment but meet the expected demand. The NCP is regarded as China?s most important agricultural region. This work aims at describing and discussing the environmental effects of agriculture in the NCP. The extent of these environmental impacts is presented. An essential part of this work is the in-depth description and analysis of the current cropping systems and farming practices, which is based on the findings a household survey. The central hypothesis of this work is that a change of the management systems is able to meet the production goals, to achieve a higher input-output efficiency and to reduce negative environmental impacts. Embedded in the objectives of this work, the main goals are the description of current agricultural practices and related negative environmental impacts, the definition of agro-environmental management and policy measures, impact analysis of management and policy measures and the development of suggestions for further research. The second chapter aims at introducing the background of this research, i.e. the environmental impacts of agriculture. Hereby the focus lies on the introduction of relevant and characteristic farming practices and on the related institutional setting. Then the processes of data acquisition and data handling for this work are described. The descriptive analysis presents the findings from a survey in July 2008; it aims at describing the characteristics of the surveyed farm households. Chapter 5 describes the methodologies which are applied for the analysis in this work. The first part describes the methodology of Linear Programming and its selection process. The second part explains the selection process for the integrated households. The last part describes the processes of environmental assessment by means of selected indicators. In chapter 6 the model is applied to simulate and analyze the selected households in changing scenarios. Each Scenario is described individually. Then the simulation results are presented and discussed. In chapter 7 possible strategies to reduce environmental impacts of farming in the NCP ? considering the objectives of this work: sustainability and food security ? are discussed. The discussion focuses on the two main problems in the research area: fertilization and water. The analysis showed that current farming practices in the research area are not sustainable and can, thus, threaten future food security in China. The dilemma of the research area is that intensive agricultural production cannot be reduced because high yields are needed to feed the growing demand from a (economically) growing population. Simultaneously high resource consumption and pollution from farming cannot continue as that could eventually result in irreversible damage to agriculture in the NCP and also threatens livelihoods. Finally strategic policy recommendations, characteristics of improved management practices and recommendations for further research are presented. These recommendations can play an important role in decision guiding for policy makers. After reviewing other studies in the NCP, it has to be concluded that this work represents one of the most comprehensive analysis of the agricultural practices in the Hebei province. It was demonstrated that management practices for maize and wheat exist which can result in higher input-output efficiency and which are economically more profitable ? especially production options which include intercropping of other crops or demand-driven fertilization and irrigation. The hypothesis was tested to be valid. The simulation of optimization options showed that economically more profitable production options exist. These optimized production options are characterized by a more efficient factor input (mainly water and fertilization) and resulting decreased environmental impacts. The policy of a premium for reduced water use resulted in the highest simulated increases of total contribution margins with simultaneously reduced negative environmental impacts. However the simulation also revealed that, in order to ensure food security, incentives for producing wheat should be provided as it is the economically least profitable main crop, but it has important functions for own consumption. The simulation also revealed that policies aimed at increasing output prices of the main crops (in combination with optimized production options) can result in total higher contribution margins and decreased negative environmental impacts and higher resource use efficiency. It should be noted that the optimum results did not integrate production options which the surveyed farmers are currently applying ? this indicates that current practices are not efficient. Many studies state that knowledge transfer systems and extension services in the NCP are deficient. The survey showed that the majority of the households did not have contact with the extension services, and, moreover, most of the households never received agricultural training. A knowledge transfer program can be an efficient tool to reduce environmental impacts of farming in the NCP. In addition specific recommendations and systems under considerations of socio-economic approaches have to be developed to improve knowledge transfer and services to farmers in the NCP. Appropriate decision support systems for efficient land use in the research area have to be developed. This study showed that laws and regulations regarding environmental impacts exist, but they are not reliably enforced. Many studies state that the current institutional framework for water management is inadequate and that it, thus, represents one of the causes for the overexploitation of water resources. Therefore the responsibilities should be clearly defined in order to be able to create incentives for saving water and to increase efficiencies. Furthermore, farmers? water rights are not secure and transparent. Therefore plans, based on scientific estimations for water supply and demand, are needed to clearly define and enforce water use rights. Besides clearly defined and enforced water use rights, also longer, enforced and secure land-use rights might facilitate the adoption of sustainable farming practices. Also the institutional set-up complicates the implementation of policies. Therefore institutional change with coordinated efforts is needed. Decentralized and regionalized administrations might increase the effectiveness of policies. In addition the institutional framework has to be updated to the specific requirements in the NCP. One of the main reasons for problems related to water management is that it represents a mostly unregulated resource in the NCP. The survey showed that fertilizer use is strongly varying, overuse and undersupply occur in the research area. The strongly varying and inadequate fertilizer applications endanger the sustainability of the agricultural systems in the NCP. Furthermore the organic matter contents in the soils are too low. The survey also revealed that the farmers in the research area are not informed about the quality of their soils. Integrated into knowledge transfer programs, providing opportunities for soil analysis to the local farmers could result in fertilization practices which are based on the nutrient contents of the soil and, thus, are more efficient. Structural development projects in the Chinese rural areas need to be continued, especially in the research are, to avoid a rural exodus. The living conditions in the rural areas ? in terms of income, education and health services ? are still not comparable with the conditions in urban areas. Chinese policy has to focus on stopping the further decline of the ground water tables. Furthermore a conscious water use and environmental awareness for all stakeholders has to be created in order to avoid that pollution or resource scarcity and misuse will further reduce agricultural production in the NCP. The social costs of further decreased agricultural production in the NCP would be unbearable.
Prozess der Transformation der Landwirtschaft Usbekistans und Probleme bei der Umstrukturierung der landwirtschaftlichen Betriebe
(2002) Nazarkulov, Umidjan Rakhimjanovich; Zeddies, Jürgen
Privatization of agricultural enterprises in former soviet countries has led to changes in production structure, methods of production and management of enterprises. Hence, the main objective of this dissertation is, at first, analysis of development of the agrarian sector and agricultural enterprises on the example of the Republic of Uzbekistan, and the identification of their weaknesses and problems. Furthermore aspects of management and marketing are considered and recommendations on improving the strategy of optimization the production process, which will serve as a basis for decision-making in the appropriate organizations. The structural changes in typical farms of 3 regions of the Republic of Uzbekistan under different frame conditions are analyzed using a linear programming model. The results of these optimization calculations are leading to the following requirements: - Change of the production structure and reduction of the state influence and governmental control; - Cancellation of fixed state prices of cotton and wheat with a simultaneous increase of water taxes; - Reduction of labour input and increase of wages with the purpose of improving the motivation and efficiency of labour; - Extension of the area of family farms. According to the model calculations a liberalisation of agricultural markets would lead to the following consequences for farm enterprises and agricultural production: - A substantial reduction of cotton production will lead to a wider crop rotation and better soil fertility; - The total gross margins of the farm enterprises will increase due to an optimization of production and marketing structure; - If the fixed producer prices for wheat and cotton will be eliminated, wheat production would increase significantly; - Depending on the region animal stocks will show a different development pattern. While in one region the big farms will reduce their livestock production, in two other regions they will be increased. Family farms tend to reduce the livestock number due to scarcity of land resources; - Farm incomes can be increased by reducing the number of workers; simultaneously increasing wages and introducing better labour management practices thus contributing to higher motivation and business success; - Profits should be invested in new machinery and equipment in order to maintain adequate levels of production; - Private family farms show a relatively high labour capacity and would be able to increase their farm land. Therefore liberalization of land market is necessary; - For family farms a liberalization of producer prices will lead to similar changes in production and marketing structures as for big farm enterprises. In conclusion it can be recommended to state institutions to reduce their influence on the operational decisions of farmers. The main objective of agricultural policy in future should be improvement of frame conditions for trade, liberalization of markets, effective support to structural changes and creation of a system of social support to farmers.

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