From "Reports on Agriculture", exercise book 1, May 2011

Brief opinion on the Commission Communication on the Common Agricultural Policy towards 2020

By Scientific Advisory Board on Agricultural Policy at the BMELV*

The Advisory Board calls for a courageous reform of the agricultural policy to be undertaken, which should focus on long-term objectives and no longer regard agricultural policy as a protection and distribution policy for the domestic agricultural sector. It is concerned about the fact that the Commission Communication lacks a stringent and convincing concept for the CAP of the future and, instead, focuses on modifications of the direct payment regime. The Advisory Board sees the danger that the social legitimation of such an agricultural policy will continue to dwindle and that, as a result, the availability of the funds necessary to tackle the agricultural sector’s actual problems will be called into question.

Brief opinion on the introduction of an animal welfare label in Germany

By Scientific Advisory Board on Agricultural Policy at the BMELV*

The Advisory Board calls for a strict animal welfare and consumer protection policy which ensures that animal welfare is assessed on the basis of scientific methods, thus making it possible to assign holdings to different animal welfare categories on a voluntary basis. An animal welfare label should be geared towards achieving a sustainable improvement of animal welfare in the production of products of animal origin. Establishing indicators and categories should create transparency while risk-oriented controls should counter possible distortions of competition. Moreover, accompanying measures during the introductory phase should promote market penetration. Under these conditions, the Advisory Council considers the animal welfare label to be a suitable instrument to improve the animal welfare situation in livestock husbandry, to account for consumer wishes and to create better conditions of competition for producers wanting to bring their production into line with animal welfare criteria.

Prerequisites, advantages and problems involved in cooperations between agricultural enterprises – a theoretical analysis and an empirical survey

By Karin Hein, Pamela Lavèn and Reiner Doluschitz, Stuttgart

In view of increasingly competitive market conditions as well as rising prices and cost pressures facing agricultural businesses and challenged by ever more demanding requirements with regard to environmental protection and animal and consumer rights, farming operations are increasingly finding themselves confronted by doubts as to whether their activities will continue to prove economically viable. Working together by forming cooperatives would be one way for a number of farmers to deal with the changing framework conditions.

The following article sets out to address some of the prerequisites, advantages and problematic issues concerning agricultural cooperatives. An analysis of the significance of these aspects for practical purposes will be undertaken using an empirical approach. In addition, concepts and strategies will be developed to help farmers who are willing to participate avoid problems, or find solutions for problems, that arise in the cooperative unions.

When setting up cooperatives, it is of particular importance to schedule a preparation phase and make sure that partners are selected with care. A cooperation agreement is an absolute must if greater damage incurred through dissolution is to be avoided. This contract should also include stipulations for the event of such dissolution. Other aspects that should be taken into consideration and regulated in a fair and equitable manner and documented in writing include financial aspects such as factor payments, profit and loss distribution and evaluation systems. Mutual agreement should be sought and clearly agreed upon in the areas of task and responsibility assignment. Competent advisors should be consulted in good time, in respect of both the formation and the resolution of conflicts that may arise during the course of the cooperation. Regular as well as situation-specific discussions should take place and a sufficiently intensive communication should be ensured.

Digestate treatment: The influence of the location and size of the plant on the cost

By Ulla Kellner, Göttingen, Ruth Delzeit, Kiel and Jochen Thiering, Hohenheim

With an increasing number of biogas plants, this technology has become an important area in agricultural production. This kind of energy production requires large amounts of biomass, and considerable quantities of digestate are also released. Animal excrement (for example slurry or solid manure) is also an oft-used substrate. Various studies in the past aimed primarily at analysing the substrate supply; in this paper we focus on fermentation digestate. With a linear transport model in which different proportions of slurry are applied and various plant sizes and processing techniques are considered, we show that the different spatial features of a county substantially influence the processing and treatment costs of digestate. For this study we selected three different counties in North Rhine-Westphalia. Aachen represents a county dominated by intensive agriculture. The second county, Borken, has a large amount of livestock, predominantly sandy soils and a high number of biogas plants. Another contrast is displayed by the county of Siegen-Wittgenstein, which typifies a grassland region in the highlands.

Our results show that especially in counties with only a small amount of agricultural land (such as Siegen-Wittgenstein) and a large heterogeneity in its agricultural area, the digestate treatment is already cost efficient for smaller biogas plants. The same applies in the case of regions with high livestock density such as Borken, where the area needed for disposal is comparatively large. The cost efficiency is enforced by a high amount of animal excrement as substrate.

The influence of farm size, training background and the relevant marketing year on the success of full-time farms

By Vladimir Dolenc, Osterrönfeld

This study is aimed at analysing the differences in income among German arable and dairy farms. The analysis is based on data – grouped according to farm size and the farm holders’ training background – provided by the German test farm survey over the last nine years. The following core findings can be derived from the non-linear regression analyses: Farm size has a highly significant effect on farm income. With an elasticity of slightly below one, doubling the farm size almost doubles farm income. But the farm holders’ agricultural training also has a decisive effect on the farms’ income. The better the training, the higher the income. Master training or higher education, on the other hand, do not result in significantly higher incomes. Nevertheless, farm holders with an academic background earn more than those with master degrees as they often have larger farms. The two determinants that can be influenced by individual farms in the long term, i.e. farm size and training, have been successfully examined for stability and reliability. Finally, it must be added that the constantly changing price-cost-situation on the relevant agricultural market – as a cyclical component – also has an influence on the income. But the influence of individual farms on this factor, which mainly reflects the entrepreneurial risk, is rather limited.

Opportunities for and constraints of scientific policy analysis − Report on the 50th Annual Conference of the German Society of Economic and Social Sciences in Agriculture (Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues − GEWISOLA) from 29 September to 1 October 2009

By Martin Banse, Bernhard Forstner, Horst Gömann, Hiltrud Nieberg, Frank Offermann, Peter Weingarten and Heiny Wendt, Braunschweig

The agricultural and food sector is subject to strong political regulation. The discussions on the post- 2013 design of the Common Agricultural Policy are in full swing. In addition, other policy areas are increasingly exerting an influence on the agricultural and food sector. Against this background there is a great demand for scientific policy analysis, policy evaluation and policy advice. Therefore, "Opportunities for and constraints of scientific policy analysis" was the topic of the 50th Annual Conference of the German Society of Economic and Social Sciences in Agriculture, which took place at the Johann Heinrich von Thünen-Institute (vTI) in Braunschweig from September 29th to October 1st 2010. On the first day, expectations, experiences and recommendations of users of scientific policy analyses were presented by Dr. SEEGERS (BMELV), Dr. SCHEELE (European Commission), Dr. WILSTACKE (MKULN of the Land of North Rhine-Westphalia) and Prof. Dr. DE HAEN (formerly FAO). They emphasized the need for scientifically-based policy advice, and discussed the preconditions which must be met in order to increase the usability of scientific results for policy advice. Using the example of the Guidelines for Policy Advice of the Berlin-Brandenburgische Akademie der Wissenschaften, Dr. LENTSCH (Heinrich-Böll-Stiftung, Berlin) identified options for improving the performance and quality of scientifically based policy advice. Dr. VAN MEIJL (LEI, Den Haag, Niederlande) discussed experiences made with scientific policy advice in the Netherlands. On the second day, 33 oral presentations in several work groups and 26 poster presentations covered a wide range of different topics. During the plenary session on the final day, the conference topic was considered from the viewpoint of providers of scientific policy analysis. Prof. Dr. GRETHE (University of Hohenheim) and Dr. BRITZ (University of Bonn) gave an overview of the state of the art of related research and the challenges of quantitative, model-based analysis of agricultural market policies and environmental aspects. Prof. Dr. HECKELEI (University of Bonn) highlighted the conflicting demands that arise from the existing incentive scheme for scientists on the one hand and policy-relevant analysis on the other hand. In his presentation on the policy relevance of agri-economic research, Prof. Dr. ISERMEYER (vTI, Braunschweig) pointed out that while this research deals with policy-relevant topics, the relevance of its output for policy makers can be improved. For the around 230 conference participants, the commemorative event "50th Annual Conference of the GEWISOLA" organised by the Federal Ministry of Food, Agriculture and Consumer Protection, including the respective poster exhibition constituted the highlight of the social programme.

An empirical analysis of customer satisfaction in horse-stabling services – A causal analytical study by PLS –

By Claudia Gille, Göttingen

An increasing use of horses for leisure and sport purposes has generated a growing number of riders without accommodation and care facilities of their own for their horses. This has led to a significant expansion of horse-stabling services, which in some regions has already resulted in a surplus of stables. The present study examines customer satisfaction with horse farms. 514 customers in 37 farms were surveyed. The results show that customers were generally satisfied. By using a structural equation model, two direct factors were revealed as relevant influencing variables. The factor "expertise and support" has the highest influence on customer satisfaction, followed by the factor "appearance and quality of operations". In addition to identifying the relevance of non-monetary parameters in customer and price satisfaction, the real price as a monetary parameter was included in the estimation model too. The results show that the price itself did not have a significant influence on price satisfaction.

Foreign Direct Investments as Agents of Change for Russian Agri-food Business

By Vera Belaya, Halle (Saale) and Jon Heinrich Hanf, Geisenheim
The internationalization of food retailing and manufacturing that has swept through the agri-food system in industrialised countries is now moving into Russia. When retailers as well as processors enter a new country they face the challenge of building up their procurement and distribution systems. Thus, it is observable that modern management concepts are exported. The aim of our paper is to analyze the influence of FDI on the Russian agri-food business. First, we outline the features of Russian agri-food business, describing the current situation. Second, we discuss about the FDI in Russian agri-food business. Third, we elaborate on the influence of FDI on the Russian agri-food business at different stages (agricultural producers, food processing, food retailing including fast food sector). We further discuss the future prospects and outlook on the development of the Russian food sector.

Keywords: Foreign direct investment (FDI); Chain Management; Russian Agri-food Business

Potential competitiveness and competitive position of the Polish agri-food sector on the Single European Market

By Walenty Poczta and Karolina Pawlak, Poznan

The aim of the paper is to identify the potential competitiveness of Polish agriculture, as well as the competitive position of agri-food products on the European market since Poland joined EU. The results of the analysis show that although, in the conditions created by accession to the EU, Poland’s agriculture has achieved essential progress in terms of production, it is still characterised by low productivity, which proves that its agrarian and production structure is faulty and that further changes are needed to improve it. Despite that, Poland is characterised by a relatively strong competitive position on the Single European Market. However, it is necessary to pay attention to its insignificant share in intra-EU trade in agri-food products, which is only just over 3 %. It is worth stressing that labour-intensive products, especially animal products, have a strong competitive position on the Single European Market. The most important determinant of the competitiveness of Polish agri-food products after accession to the EU comprise cost and price advantages resulting from the lower cost of production, including wages and processing margins.

Key words: potential competitiveness, resources and allocation of production factors, relations between production factors, structure of agricultural holdings, scale of production conducted by agricultural farms, competitive position, comparative advantage, agri-food products, export, import, intra-EU trade

* Members of the scientific advisory board: Folkhard Isermeyer, Braunschweig, Annette Otte, Gießen, Jürgen Bauhus, Freiburg, Olaf Christen, Halle-Wittenberg, Stephan Dabbert, Hohenheim, Matthias Gauly, Göttingen, Alois Heißenhuber, München, Jürgen Heß, Kassel, Dieter Kirschke, Berlin, Uwe Latacz-Lohmann, Kiel, Matin Qaim, Göttingen, Michael Schmitz, Gießen, Achim Spiller, Göttingen, Albert Sundrum, Kassel, Peter Weingarten, Braunschweig

Released as article