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From "Reports on Agriculture", exercise book 1, May 2010

Recommendations for increasing the acceptance of agri- environmental schemes – Results of an empirical study in Lower Saxony

By Christine Niens, Rainer Marggraf, Göttingen

Since 1992 agri-environmental schemes (AES) have been a mandatory part of the second pillar of the Common Agricultural Policy of the European Union. The goal of AES is to integrate nature protection and conservation into agricultural production. In Germany AES are implemented by the Federal States. Currently in Lower Saxony and Bremen the budget for rewarding the achievement of AES has not been exhausted to the full extent. Therefore, it is desirable to increase farmers’ participation in AES.

This paper shows how farmers’ attitudes towards AES are generated and how participation rates could be increased. First of all, different economic and non-economic factors which have an impact on the acceptance of AES will be identified on the basis of a detailed literature analysis. From the economic point of view it is decisive for the acceptance of AES that the compensatory payment equates to the costs incurred in carrying out the AES. Two of the most important non-economic influencing factors are the advisory services concerning the implementation of AES and the farmers’ level of confidence in agri-environmental policy.

In a second step the results of an empirical study conducted by the authors in June 2008 among farmers in Lower Saxony will be presented. In the course of this empirical study the farmers’ attitudes towards AES and towards new innovative elements of AES were elicited. These include resultoriented payment, auctions, participative elements and regionalisation.
It becomes apparent that the farmers’ participation in AES can be increased by result-oriented payment, by the possibility of participation during the development process of AES and by regionalisation. However, there are uncertainties regarding auctions.

To increase participation in AES it would be necessary to account for the wishes of the farmers. Otherwise participation in AES could not be expected to increase. The implementation of result- oriented payment, regionalisation and suitable rewards could help to augment the participation in AES. An integration of these elements in AES would lead to higher acceptance and to improved economic and ecological efficiency.

Flowering strips as compensation measures on arable land – nature conservation valuation and legal interpretation using the example of intensively used agricultural areas in three German federal states

By Juliane Mante, Anett Wagner, Detlef Czybulka and Bärbel Gerowitt, Rostock

Intensively used agricultural and high-density areas are characterised by strong competition between different types of land use – e.g. building development, agriculture and nature conservation. The most common form of implementation of the German impact regulation (Eingriffs- und Ausgleichsregelung) intensifies this competition, because compensation measures withdraw valuable land from agricultural production. Production-integrated compensation measures solve this problem, because they allow agricultural cultivation under certain nature conservation conditions. However, they are seldom used.

In winter 2006/2007 fourteen nature conservation experts in intensively used agricultural areas of the German federal states Saxony-Anhalt, North Rhine-Westphalia and Lower Saxony were asked in in-depth interviews about implementation and acceptance constraints. Additionally, the relevant regulatory framework of these three federal states was analysed in terms of potential for, and obstacles to, the wider implementation of production-integrated compensation measures. These studies focused on a rotational use of certain strips of land as flowering strips.

The research results show that the implementation of flowering strips on a rotational basis as compensation measures is basically legally permissible. The main problems are the insufficient capacities of the lower nature conservation authorities and the training of the persons in charge of administration and control within these agencies. One solution is to delegate the administration and control tasks to competent supporting organisations, e.g. foundations or Landscape associations.

Developments and determinants of farmland rental rates in Germany

By Hendrik Habermann and Charlotte Ernst, Kiel

This article analyses the development, spatial distribution and determinants of farmland rental rates in Germany at the county level. Starting with a descriptive analysis of rental rates, it is shown that a difference of more than 500 €/ha exists between the lowest and the highest rental rates for arable land. Rental rates for pasture land in different districts differ by up to 300 €/ha. While arable farmland rental rates rose in nearly all German districts between 1999 and 2007, increases in pasture land rental rates were restricted almost entirely to the former GDR. As well as the rental rates, the rental share of utilisable agricultural area also increased significantly from 12 % in 1949 to nearly two-thirds in 2007.

The estimations of determinants of farmland rental rates use regional averages at district level. The study focuses on Western Germany and finds that soil quality, share of arable acreage, share of sugar beets, potatoes and vegetables as well as stocking rates positively impact on farmland rental rates. The extent of biogas production does not exhibit a significant effect. Labour force and farm size measured in hectares also positively influence land rents. Levels of concentration on local land markets are not high enough to have a significant impact. Higher shares of rented land coincide with lower rental prices – a finding which confirms results of previous work. Finally, the regional part of decoupled direct payments, enacted by the EU in 2003, may fully capitalise into farmland rental rates.

Consumer perception of standards and labels for organic food

By Meike Janssen and Ulrich Hamm, Witzenhausen

From July 2010 on, prepacked organic food products will have to be labelled with the new EU logo. For many years, there have been numerous voluntary organic certification labels in Germany. This paper examines how consumers perceive differences between the organic standards behind the different labels. From the analysis, recommendations are derived for agrarian political decision makers at EU level, national and regional level as well as for private farmers’ associations.

The focus group discussions with consumers showed that only a few participants could name specific differences between different organic standards. Some participants distinguished between high standards of the farmers’ associations and the lower legal requirements. Many participants, however, were not aware of any differences. The new EU label for organic food was viewed rather critically by the participants. It was feared that the organic standards might be lowered and the control system was questioned. Hence, it is urgently recommended that comprehensive communication campaigns should be carried out when the new EU label is introduced, in order to gain consumer trust. In an interim phase, the Bio-Siegel should be used in addition to the mandatory EU logo so that consumers can easily recognise organic food. The farmers’ associations will have to create a clearer distinction between their standards and those of the EU and put more emphasis on communicating the added values to consumers, if they do not want their logos to disappear from the market.

Strategies for competitive milk production in mountain areas in Austria

By Leopold Kirner, Wien

The mountain areas of Austria are major locations for dairy farming in the country. Owing to natural conditions, milk in these areas is produced at considerably higher cost than elsewhere. Nevertheless, structural change in the mountain areas is proceeding at a lower pace, although there is a clear distinction between less and extremely disadvantaged regions. The general result of this analysis is that milk production in Austria will further increase in less disadvantaged mountain areas and decrease in plain areas and extremely disadvantaged mountain areas. Possible strategies for adaptation of particular dairy farms were evaluated using a recursively dynamic single farm model and assuming alternative economic conditions in the future. The analysis and discussion is based on farm indicators and on the overall budgetary situation. Results of the model simulations vary according to the strategies analysed, and the economic benefits of these strategies depend substantially on conditions and circumstances within and outside of the farm.

Keywords: milk production, mountain farms, farm management, strategies, farm model, simulation

20 Years of Transition in Central and Eastern European Agriculture: Achievements and Challenges

By Agata Pieniadz, Jürgen Wandel, Thomas Glauben, Jon H. Hanf, Halle

This paper discusses the achievements of the transition process in the respective agri-food sectors of Central and Eastern European countries and identifies challenges for further development. Twenty years after the beginning of transition, countries that have carried out relatively rapid and far-reaching reforms show better economic performance than countries with slower reform strategies. For the new EU member states, the prospect of EU membership provided an additional incentive for restructuring. The newly independent states of the former Soviet Union show quite diverse paths of economic development. After the financial crisis of 1998, countries labelled as advanced reformers, such as Russia, the Ukraine and Kazakhstan, have experienced dynamic economic development, including in their agri-food sectors, whereas CIS countries that have carried out only rudimentary market reforms continue to stagnate. In these latter countries, there is a considerable need for restructuring in order to improve productivity and the quality of agricultural and food products, as well as for the substitution of labour with capital. Further challenges in all transition countries include investments in the human capital of agricultural labour and in the infrastructure of rural areas to counteract rural depopulation.

The model meat exporter – Significance of the Uruguayan production of lamb and beef

By Wolfgang Branscheid, Kulmbach

Uruguay is ideally suited as an indicator of the globalised meat markets. The main reasons are that a high proportion of the national territory is used for agricultural purposes, there is extreme specialization on pasture economy with beef and sheep due to the climatic conditions, and the fact that the inland market is small, resulting in complete dependency of the economy on exports. The collapse of the international wool market was the key experience for Uruguayan animal production in the last decades of the 20th century. The producers reacted to this with a vast transformation of the production systems, mostly by changing the animal stock. The traditional ratio of sheep to cattle of 3:1, which had until then been expedient in terms of the grazing system dropped to its current level of less than 1 : 1. Despite the reduced sheep stock, the quantity of profitable lamb meat production and exports did not drop because age and weight at slaughter increased considerably. Additionally, a similar increase in the age of steers guaranteed the full exploitation of the available pasture area. These measures did not compromise the quality level of the final products. In both types of meat, the transformation forced by the world market contributed to a better adaptation of the Uruguayan meat industry to international competition. This led to ongoing diversification of meat cuts, and to an increase in both the degree of processing and added value of the products.

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