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From "Reports on Agriculture", Exercise number 2, October 2008

Ecology and Convention – Conflict between Agricultural Concepts

By HORST SEEHOFER, BERLIN

Agriculture has been concerned with the contrast between organic and conventional farming for a long time now. Polarisation does not furnish solutions, we should rather strive for a partnership from which both modes of cultivation can derive mutual benefit. The state must create a reliable regulatory framework for farmers and can provide financial support for specific objectives. The state must not be biased though and must keep public welfare in mind. Both forms of cultivation include the responsible management of flora and fauna. At the same time, one of the main tasks of agriculture consists in producing sufficient food for a growing population on limited land.

Organic and conventional agriculture are faced with the same huge challenges, i.e. the growing world population, overcoming hunger and the protection of the climate, coupled with the global energy security. A cultivation method that may prove to be the right solution for one region must not necessarily constitute the patent remedy for hunger in the world. Climate protection also encompasses the critical analysis of transport routes. Regionally produced products can provide a solution, but not every product can be sourced from the region. Our economy is based on exports.

Renewable resources, the energy sources of the future, can make an important contribution. We should aim at integrating all agricultural raw materials from home and abroad into a certification system irrespective of their intended use. The methods of labelling that provide consumers with information about the entire value-added chain should be agreed with the economic operators.

Instruments and obligations for regulating good agricultural practice – the case of documentation of pesticide use

By HORST-HENNING STEINMANN, HENNING-WILHELM BATTERMANN and LUDWIG THEUVSEN, Göttingen

Record-keeping of factor inputs is a key factor for farm controlling. In recent years many regulations have been introduced to establish compulsory documentation requirements, even within guidelines of good agricultural practice. Highlighting documentations of pesticide use, this paper gives an overview on the current legal and practical situation in Germany. Despite a large number of regulations, certainty about required modalities of record-keeping is low. A legal specification is upcoming. An aspect which is of greater importance than legal environment is the demand made by traders and related industry for traceability. The situation is discussed in the light of the current scope of farmers´ documentation.

Exploring differences in financial success of organic farms in Germany: an empirical analysis

By TAMMO FRANCKSEN and UWE LATACZ-LOHMANN, Kiel

This paper investigates the financial success of organic farms in Germany and employs discriminant analysis to identify key determinants of success. The analysis is based upon an unbalanced panel of 2,550 annual farm accounts covering the financial years 1995/96 to 2005/06. The data set involves bookkeeping data from 835 organic farms from across Germany. The results show that specialised dairy operations form the most successful group of farms in the data set. The least successful group, by contrast, is made up of specialised non-dairy cattle operations and combined fodder farms without dairy cows. The analysis revealed significant differences in financial success between the upper and the lower quartiles of each of the six farm types analysed. The determinants of financial success are varied and are usually specific to farm type. Highly productive soils, high labour input per hectare of land, and full-time (as opposed to part-time) farming were identified as key factors of financial success across all farm types analysed.

Pure vegetable oil as Fuel: Framework, supporting measures and regional income chances in Germany

By THOMAS BREUER and ARNO BECKER, Bonn

The production of pure plant oils in local structures has undergone a strong increasing during the last years. This development is closely connected with the promotion of biofuels in nearly all European countries. The promotion of biofuels is a global trend in which Germany plays a decision role in the case of plant oil based biofuels like biodiesel and pure plant oil (e.g. rapeseed oil). In general all biofuel markets can be characterize as ‘political markets’ which means that the definition of an individual promotion strategy (implies the sum of different policy instruments) mainly impacts the success of the market access of biofuels. This fact has partly been ignored during the euphoria in biofuels of the last years.

Pure plant oil as a fuel has obvious vantages (e.g. low production costs and a simple production process). But also disadvantages are existing (e.g. crop land efficiency and motor adaptations).

In addition to the basically question if pure plant oil should be used for fuel purposes in comparison to other biofuel options, the question of a suitable production structure (central or local) has to be posed. Within a central production structure farmers are only producers of oilseeds (in Germany mainly rapeseed) which sell their products to processing mills. From this it follows that the additional revenue for farmers only consists of the particular higher contribution margin of rapeseeds in relation to other arable crops. The much higher added value in the supply chain of plant oil based biofuels takes place in the conversion process and the following distribution. Within a local production structure farmers or communities of farmers (e.g. farm cooperatives) integrate the conversion step of the supply chain into their business. In this case a higher added value can be received for the farmers’ income. The decision between these two production structures displays one of the conflicts of objectives within the promotion policies on biofuels. The market-access of biofuels it self is not the main objective of the promotion but all economic or environmental impacts which follow from this access. The high plurality of actors which are involved in the political decision process is reflected by the number of involved policy fields. Based on the origin of the different policy fields different objectives exist. These multifarious objectives which are placed in the development of a promotion strategy by the different policy fields result in a high risk of inefficient instrument choices. From this it follows that only a long dated and transparent promotion strategy which clearly defines the main objectives results in a political framework which gives security of investment for all market participants. If there exists a clear definition to foster the rural areas within the promotion strategy on biofuels local production structures have to be selected and economic additional costs have to be accepted.

In 2006 the additional added value by the local production of rapeseed oil in Germany had a value of app. 114 Mio Euro. The current biofuel policies which imply an increasing taxation for biofuels during the next years endanger these gains. Furthermore the production of pure plant oil for fuel purpose in local production structures up to 2009 probably exists no longer because they would not be able to compete on the fuel market.

Keywords: Pure Plant Oil, Biofuels, policy instruments, agricultural and regional income

Coordination and cooperation for Bt maize plantation in Brandenburg: An explorative analysis of co-existence at the farm level

By NICOLA CONSMÜLLER, VOLKER BECKMANN, CHRISTIAN SCHLEYER, Berlin

In Germany, about 1.7 Mio ha of maize are grown each year and 350 000 ha are affected by the European Corn Borer (ECB; Ostrinia nubilalis HÜBNER), a serious pest in maize production. The ECB can either be controlled mechanically or by the use of pesticides or biological measures. Since 2006, several varieties of transgenic Bt-maize can be grown in Germany. Bt-maize is genetically modified in order to express a toxin from the soil bacterium Bacillus thuringiensis, which becomes lethal to the larvae of the ECB when feeding on the plant. The planting of Bt-maize also bears the risk of gene-outcrossing to conventional or organic maize plants. Since co-existence of all production forms is a major aim in the European Union, growing transgenic plants is subject to strict regulations. The regulatory framework in Germany comprises ex-ante regulations and ex-post liability rules to protect conventional and organic farming from possible negative side effects of transgenic plants. The farmer who grows Bt-maize is for instance obliged to keep buffer zones and is held liable for damages.

The value of Bt-maize production is also depends on f additional costs arising from ex-ante regulations and ex-post liability according to the distribution of property rights. These costs could be minimized by cooperation between the Bt-maize growing farmer and his neighbours.
Case studies comprising a Bt-maize farmer and two of his direct neighbours were carried out to elucidate the effect of transaction costs on the decision to grow Bt-maize. For the study, the Oderbruch region in the federal state of Brandenburg was chosen since in this area much Bt-maize is grown and the ECB is of increasing importance.

The case studies revealed that the costs arising from ex-ante regulations and ex-post liability rules were only of minor importance to the Bt-maize growing farmers. The large farms could easily manage the construction of buffer zones within their own fields and avoid the planting of Bt-maize close to their neighbours. Thus, cooperation was not necessary to achieve co-existence.

Still, cooperation could become more important in the future, since there is a possibility of reducing intended buffer zones of 150 m by mutual agreement between the Bt-maize growing farmer and his neighbour(s).

The prevalence of harmful soil compaction in southern Lower Saxony

By JOACHIM BRUNOTTE, Braunschweig, MARCO LORENZ, Berlin, CLAUS SOMMER, Braunschweig, TAMAS HARRACH, Gießen, und WALTER SCHÄFER, Bremen

Soil compaction has a long-term negative impact on the physical, chemical and biological processes in soil and therefore affects different functions of soil. The literature pertaining to this plant production problem is extensive and covers all facets. In contrast, only few studies exist on the spatial distribution of harmful soil compaction in Germany.

The purpose of this study is to make a statement concerning soil compaction for southern Lower Saxony. Field and laboratory studies were to be linked to results from Ruhm (1983) after more than 50, and after 20, years. To assess the level of soil compaction, a system of indicators according to LEBERT et al. was used, which is based on the evaluation of soil functions and soil structure. Here neither the soil bulk density (nor the porosity) determine the harmful compaction but rather the damage thresholds for the criteria air capacity, saturated water conductivity and the packing density, since all three must be fulfilled. On 47 arable fields in southern Lower Saxony, a total of 4440 soil core samples (100 cm3) were taken in each of two soil profiles and at each of four depths with 15 (2002) and 10 (in 2003) repetitions. The soils studied were mainly haplic luvisols (WRB) with loess as parent material. The sites considered were in sugar beet-cereal crop rotations, because the total weight of sugar beet- and cereal harvesting machines are often criticized today from the perspective of soil conservation.
In the laboratory the dry bulk density or rather the porosity, the field soil moisture, the saturated water conductivity, the air conductivity, the pore size distribution, and thus the air capacity, field capacity, total available water content and permanent wilting point were determined.
On the basis of the results from the laboratory studies, eight fields were selected which had critical air capacity and saturated water conductivity values according to the indicator system and thus supported the assumption that harmful compaction might exist. Soil structure evaluations were conducted in the respective soil profiles in the year 2006 by assessing the packing density.

According to the results presented, no large area compaction damage is found at present in the subsoil of the studied arable fields. While ten of the 47 fields fulfil the criteria of air capacity and saturated water conductivity for compaction damage, the structure evaluations show a packing density for all fields of under "4". However, for prevention purposes, all possibilities for soil-protecting wheeling should be used.
Some areas of the topsoil basis show slight partial harmful compaction; in tramlines and headlands harmful compactions were detected.
Based on the results, the proposal was made to include the intensively tested fields in the program for permanent observation of soil areas in the state of Lower Saxony. Thus further changes in the soil structure, differentiated according to subsoil and topsoil basis in the agricultural production areas as well as for headlands would be documented. Already at the mid-term, an early warning system against soil compaction damage would thus be established.

Changes in the Agricultural and Food Sector – Report on the 47th annual meeting of the German Society for Economic and Social Sciences in Agriculture and the 17th annual meeting of the Austrian Society of Agricultural Economics at the Technical University of Munich 2007

By THILO GLEBE, ALOIS HEIßENHUBER and KLAUS SALHOFER, Munich–Weihenstephan, LEOPOLD KIRNER and SIEGFRIED PÖCHTRAGER, Wien

From 26th to 28th September 2007 the 47th annual meeting of the German Society for Economic and Social Sciences in Agriculture and the 17th annual meeting of the Austrian Society of Agricultural Economics took place at the Technical University of Munich in Freising-Weihenstephan. The overall topic of this conference was "Changes in the Agricultural and Food Sector". The conference comprised four plenary sessions and eighteen working sessions. The presentations focused on the analysis of possible impacts of changes in agricultural markets and the food sector on agricultural policy and science within developed and developing countries. Additionally, some working groups addressed issues related to energy policy and the areas of conflict between nutrition and energy production of agrarian commodities. The conference was rounded off by other presentations on a whole range of issues concerning agricultural and nutritional economics.

The market for SFP in Germany – a descriptive analysis

By NORBERT RÖDER und STEFAN KILIAN, Freising

The implementation of decoupled transfer payments in the form of single payments is a pivotal element of the single payment scheme (SPS) of the Fischer reform. This paper focuses on the descriptive analysis of the modifications of this policy change. The analysis of the German Central IACS database (ZID) shows that the current face value and distribution of the payment entitlements largely reflects the historical evolution of German farm structures. While in the old federal states the distribution of payment entitlements differs between regions with intensive and extensive agriculture, the newly-formed states show a more homogenous distribution of the face values. The heterogeneity of payment entitlements is already apparent at the lowest level of spatial aggregation (municipality) in all trade regions. In Germany, the transition to the regional model in 2013 will lead to a substantial redistribution of the agricultural transfer payments of the first pillar. Furthermore, analyses of the ZID shows that trade with payment entitlements per se, that is to say trade without simultaneous trade of land, seldom occurs. The analysis of an expert survey adds up to trading prices of single payments which are markedly lower than the net present value. A possible reason could be that not all the payment entitlements are activated, which is an indication of a surplus of single payments.

Factors determining whether farmers give up / continue working in agricultural enterprises in Austria

By FRANZ WEIß, Vienna

In the paper I tried to quantify the impact of farm-specific factors on the probability of Austrian farmers stopping or continuing farming in the period between 1995 and 1999. As a data base I used the single farm data of the farm censuses 1990, 1995 and 1999, partly complemented by the INVEKOS data pool and other data sources such as regional unemployment and income statistics. For the estimation I used a multivariate logistic regression model. First, it was possible to show that the probability of giving up farming declined particularly with participation in the Austrian environmental program ÖPUL, the total farm income and the size of direct payments (ÖPUL and program for mountain farmers). Furthermore, small and medium forest areas seem to improve the chance for farm survival, whereas farms with large forest areas are given up more frequently. In addition to economic factors, family conditions and personal properties of farm holders play an important role. For example, farm holders without children have a lower probability of surviving than farm holders with children, female farm holders give up more easily than male ones, and elder farm holders, as expected, more easily than young ones. Finally, I tested several regional factors, showing that the proximity to cities was particularly influential in increasing the chance of remaining in the sector.

Horizontal and vertical cooperation of producers of protected geographical indications – The regulation (EC) No. 510/06 as brace for a cooperative marketing

BY ADRIANO PROFETA und RICHARD BALLING, Munich

Several articles of the regulation (EC) No. 510/06 to the protection of geographical indications on agricultural products and foodstuffs press the producers to an interplant cooperation whereas other articles allow for a voluntary commitment in order to carry out a cooperative marketing. After a short definition of the term cooperation this paper gives an overview about the opportunities of horizontal and vertical interplant collaboration in the framework of regulation (EC) No. 510/06. Furthermore concrete examples are presented.

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