scholarly journals Approaches to estimation the farm-level economic viability and sustainability in agriculture: A literature review

2019 ◽  
Vol 65 (No. 6) ◽  
pp. 289-297 ◽  
Author(s):  
Jindřich Spicka ◽  
Tomas Hlavsa ◽  
Katerina Soukupova ◽  
Marie Stolbova
Keyword(s):  
Value Added ◽  
Economic Viability ◽  
Farm Income ◽  
Economic Sustainability ◽  
Family Farms ◽  
Return On Assets ◽  
Farm Accountancy Data Network ◽  
The Common ◽  
High Share ◽  
Legal Entities

Estimation of farm economic sustainability and viability became more topical when redesigning the Common Agricultural Policy which should stabilise farm income and make agribusiness more viable and sustainable (typically in Czech areas facing natural constraints). The key question is how to calculate the income of farms or farm households not only to survive but also to grow sustainably. The article summarises and compares knowledge from 51 studies to provide a comprehensive discussion on different ways how to measure economic viability and sustainability to set income support for farms in the areas with natural constraints optimally. The authors found family farms and off-farm income as important limitations of FADN database (Farm Accountancy Data Network) for evaluation of the economic sustainability of farm household. Moreover, some financial ratios (Return on Assets – ROA and assets turnover) are not suitable viability indicators for farms with a high share of hired land (typically large legal entities). Joining family farms and legal entities, the authors recommend using modified Farm Net Value Added (MFNVA) allowing for opportunity costs of own land and non-land assets. The average wage in the economy or region is a better proxy for opportunity labour costs of unpaid work rather than average agricultural wage.<br />

scholarly journals Statistical analysis of economic viability of farms operating in Czech areas facing natural constraints

2020 ◽  
Vol 66 (No. 5) ◽  
pp. 193-202
Author(s):  
Tomas Hlavsa ◽  
Jindrich Spicka ◽  
Marie Stolbova ◽  
Zuzana Hlouskova
Keyword(s):  
Agricultural Policy ◽  
Rural Areas ◽  
Value Added ◽  
Economic Viability ◽  
The Czech Republic ◽  
Field Crops ◽  
Farm Accountancy Data Network ◽  
The Common ◽  
Net Value Added ◽  
Grazing Livestock

The redesign of the Common Agricultural Policy (CAP) allows for more room to address issues related to stabilising farmers’ income and developing their viability in areas facing natural constraints (ANC). Maintaining income levels, developing farm economies in rural areas, and encouraging competitive agricultural practises are the challenges facing the new CAP. ANCs in the Czech Republic are characterised by a lower level of income compared to areas outside ANCs and their generally prevailing specialisation in livestock production, which has been facing a relatively turbulent development in the last decade. The main aim of this paper is to evaluate the economic viability with regard to the level of natural disadvantage and with regard to farm specialisation. The database of Farm Accountancy Data Network (FADN) was used for assessment; the authors built the Farm Economic Viability indicator, which is based on modified Farm Net Value Added. The differences between the farm groups were tested through analysis of variance. Significantly lower viability was found in ANCs compared to farms outside ANCs. Field crops achieved significantly higher levels, both in and outside ANCs. The most threatened group of farms are grazing livestock in ANCs.

scholarly journals The impact of LFA payments on FADN farms in the Czech Republic

2008 ◽  
Vol 54 (No. 10) ◽  
pp. 489-497 ◽  
Author(s):  
M. Štolbová ◽  
T. Hlavsa
Keyword(s):  
Czech Republic ◽  
Current System ◽  
Value Added ◽  
Farm Income ◽  
Family Farm ◽  
The Czech Republic ◽  
Data Network ◽  
Farm Accountancy Data Network ◽  
The Impact ◽  
Net Value Added

This paper analyses the impact of the LFA payments on farms economic results on the basis of the Farm Accountancy Data Network in the Czech Republic. Firstly, the approaches are compared to the structure of farms based on the LFA type. Secondly, the share of the LFA payments on economic results of farms is evaluated. The evaluation considers the LFA type, share of grassland, size of the eligible area of farms. Basic economic indicators are being monitored, such as Gross Farm Income, Farm Net Value Added, Family Farm Income, current subsidies, of which in particular the LFA payments. The share of the LFA payments in economic results of agricultural holdings is compared. As a result of the analysis, the winners and losers of the current system were defined.

scholarly journals Off-farm role in stabilizing disposable farm income: A Lithuanian case study

2020 ◽  
Vol 66 (No. 7) ◽  
pp. 325-334
Author(s):  
Vida Dabkienė
Keyword(s):  
Reference Level ◽  
Farm Income ◽  
Family Farms ◽  
Income Volatility ◽  
Income Source ◽  
Policy Makers ◽  
Family Farmers ◽  
Farm Accountancy Data Network ◽  
Part Time ◽  
On Farm

The paper aims to investigate family farm income volatility by decomposing disposable farm income (DFI) into the on-farm income, income from production support and off-farm income (OFI) over time. The research is focused on the OFI, assessing its role in achieving DFI above reference level based on the average net earnings. Three main indicators consistent with Farm Accountancy Data Network (FADN) were indicated. The research results revealed the significance of OFI. In 2017, 76% of the family farms were engaged in off-farm activities indicating, on one hand that such approaches as part-time farming or lifestyle farming are becoming more attractive to Lithuanian family farmers. On the other hand, research disclosed that farms mostly engaged in off-farm activities yield the lowest on-farm income levels. Moreover, the OFI tends to produce a stabilizing effect on quite a number of farmers as the majority of family farms cannot rely upon the on-farm income as their only income source. Thus, the agricultural and rural development policy makers, aimed at supporting viable farm income and strengthening farm resilience, have to answer the part-time farmers’ needs.

scholarly journals Do CAP subsidies stabilise farm income in Hungary and Slovenia?

2019 ◽  
Vol 65 (No. 3) ◽  
pp. 103-111 ◽  
Author(s):  
Štefan Bojnec ◽  
Imre Fertő
Keyword(s):  
Farm Income ◽  
Large Share ◽  
Efficient Tool ◽  
Farm Accountancy Data Network ◽  
The Common ◽  
Stable Source ◽  
The Cost ◽  
Income Variability ◽  
Economic Size ◽  
Over Time

A large share of the Common Agricultural Policy (CAP) budget takes the form of subsidies for supporting and stabilising the income of European Union farmers. This paper assesses whether CAP subsidies stabilise farm income and examines how subsidies may reduce the variability of farm income over time. The analysis is developed on a constant sample of Hungarian and Slovenian Farm Accountancy Data Network farms during the period 2007–2015. It incorporates both the whole sample and farms classified according to two criteria: economic size, and the relative importance of subsidies. Farm income variability is analysed by means of variance decomposition using three main income components: market revenue income, subsidies, and the cost of external factors. Variability in farm income over time is high due to the high variability in the market revenue component. Subsidies mitigate instability in farm income because their variability is lower than that of market revenue income. While CAP subsidies thus represent a stable source of farm income, they have played a limited countercyclical role in stabilising total farm income. Subsidies are not found to be targeted at the farms that face the highest level of income variability and thus may not be an efficient tool for stabilising farm income.

scholarly journals One or many European models of agriculture? How heterogeneity influences income creation among farms in the European Union

2021 ◽  
Vol 67 (No. 11) ◽  
pp. 445-456
Author(s):  
Łukasz Kryszak ◽  
Thomas Herzfeld
Keyword(s):  
European Union ◽  
Value Added ◽  
Farm Income ◽  
The European Union ◽  
Relative Prices ◽  
Explanatory Variables ◽  
Farm Accountancy Data Network ◽  
Generalised Method Of Moments ◽  
Large Farms ◽  
The Eu

Agricultural structures are quite heterogeneous across the European Union (EU), and it is likely that the underlying technology also differs across regions. In this article, we claim that the heterogeneity of agriculture across the EU affects the process of income creation (i.e. the relative importance of the factors of farm income differ for different agricultural models). A panel of farms representative for 125 regions reporting to the EU Farm Accountancy Data Network (FADN) during the period from 2007 to 2018 is used. In this article, those regions are grouped into three clusters. A system generalised method of moments (GMM) panel estimator is applied to each cluster. The results showed that total factor productivity (TFP), relative prices and agricultural subsidies make different contributions to farm net value added (FNVA). In particular, the income growth of farms in regions dominated by large farms seems to react more to marginal changes of the explanatory variables.

scholarly journals The Socio-Economics Factors in Family Farms with Different Economic Sustainability Levels from Central and Eastern Europe

2021 ◽  
Vol 13 (15) ◽  
pp. 8262
Author(s):  
Katarzyna Smędzik-Ambroży ◽  
Marta Guth ◽  
Adam Majchrzak ◽  
Andreea Cipriana Muntean ◽  
Silvia Stefania Maican
Keyword(s):  
Eastern Europe ◽  
Central And Eastern Europe ◽  
Agricultural Sector ◽  
Negative Relationship ◽  
Policy Instruments ◽  
Small Scale ◽  
Economic Sustainability ◽  
Family Farms ◽  
Small Family ◽  
Generational Changes

Economic sustainability plays an important role in shaping conditions for economic growth and social development. The importance of answering the question about the level of sustainability of family farms results from the fact that the countries of Central and Eastern Europe, apart from exceptions (e.g. the Czech Republic and Slovakia), are characterized by a fragmented agrarian structure. Hence, the main goal of this article was to answer two questions: 1) whether the countries of Central and Eastern Europe differ in the level of economic sustainability of small family farms; and 2) whether the same socioeconomic factors impact similarly on the level of economic sustainability of small family farms from countries of Central and Eastern Europe. The study was based on surveys conducted in small family farms: in 2018 from Poland (672 farms) and in 2019 in four other countries (Lithuania; 999 farms, Romania; 834 farms, Serbia; 523 farms, Moldova; 530 farms). The publication includes a critical analysis of the literature, structure analysis and correlation analysis. The results show the occurrence of large differences between the economic sustainability of small family farms from the countries of Central and Eastern Europe. The research indicates that the larger the area of a small-scale family farm, the greater its economic sustainability. The productivity of these farms increases with their economic sustainability. The results also prove a negative relationship between the age of the farmer and the economic sustainability of their farm in all analysed countries. These trends were found in all analysed countries of Central and Eastern Europe. The results of the analyses support the conclusion that agricultural policy instruments aimed at increasing the economic sustainability of small family farms should lead to: land consolidation, a decrease in the age of farm owners through generational changes, and a decrease in employment in agriculture, which would lead to a reduction in labour input in the agricultural sector.

scholarly journals Effects and Economic Sustainability of Biochar Application on Corn Production in a Mediterranean Climate

Molecules ◽  
2021 ◽  
Vol 26 (11) ◽  
pp. 3313
Author(s):  
Juan Luis Aguirre ◽  
María Teresa Martín ◽  
Sergio González ◽  
Manuel Peinado
Keyword(s):  
Organic Carbon ◽  
Mediterranean Climate ◽  
Cost Savings ◽  
Value Added ◽  
Field Trials ◽  
Economic Sustainability ◽  
Corn Production ◽  
Enhanced Production ◽  
Wet Weight ◽  
The Mediterranean

The effects of two types of biochar on corn production in the Mediterranean climate during the growing season were analyzed. The two types of biochar were obtained from pyrolysis of Pinus pinaster. B1 was fully pyrolyzed with 55.90% organic carbon, and B2 was medium pyrolyzed with 23.50% organic carbon. B1 and B2 were supplemented in the soil of 20 plots (1 m2) at a dose of 4 kg/m2. C1 and C2 (10 plots each) served as control plots. The plots were automatically irrigated and fertilizer was not applied. The B1-supplemented plots exhibited a significant 84.58% increase in dry corn production per square meter and a 93.16% increase in corn wet weight (p << 0.001). Corn production was no different between B2-supplemented, C1, and C2 plots (p > 0.01). The weight of cobs from B1-supplemented plots was 62.3%, which was significantly higher than that of cobs from C1 and C2 plots (p < 0.01). The grain weight increased significantly by 23% in B1-supplemented plots (p < 0.01) and there were no differences between B2-supplemented, C1, and C2 plots. At the end of the treatment, the soil of the B1-supplemented plots exhibited increased levels of sulfate, nitrate, magnesium, conductivity, and saturation percentage. Based on these results, the economic sustainability of this application in agriculture was studied at a standard price of €190 per ton of biochar. Amortization of this investment can be achieved in 5.52 years according to this cost. Considering the fertilizer cost savings of 50% and the water cost savings of 25%, the amortization can be achieved in 4.15 years. If the price of biochar could be reduced through the CO2 emission market at €30 per ton of non-emitted CO2, the amortization can be achieved in 2.80 years. Biochar markedly improves corn production in the Mediterranean climate. However, the amortization time must be further reduced, and enhanced production must be guaranteed over the years with long term field trials so that the product is marketable or other high value-added crops must be identified.

scholarly journals Structural Changes in Israeli Family Farms: Long-Run Trends in the Farm Size Distribution and the Role of Part-Time Farming

Agriculture ◽  
2021 ◽  
Vol 11 (6) ◽  
pp. 518
Author(s):  
Ayal Kimhi ◽  
Nitzan Tzur-Ilan
Keyword(s):  
Size Distribution ◽  
Structural Changes ◽  
Farm Size ◽  
Farm Income ◽  
Higher Moments ◽  
Full Time ◽  
Family Farms ◽  
Income Sources ◽  
Part Time ◽  
The Mean

Israeli agriculture has experienced rapid structural changes in recent decades, including the massive exit of farmers, a resulting increase in average farm size, a higher farm specialization and a higher reliance on non-farm income sources. The higher farm heterogeneity makes it necessary to examine changes in the entire farm size distribution rather than the common practice of analyzing changes in the average farm size alone. This article proposes a nonparametric analysis in which the change in the distribution of farm sizes between two periods is decomposed into several components, and the contributions of subgroups of farms to this change are analyzed. Using data on Israeli family farms, we analyze the changes in the farm size distribution in two separate time periods that are characterized by very different economic environments, focusing on the different contributions of full-time farms and part-time farms to the overall distributional changes. We found that between 1971 and 1981, a period characterized by stability and prosperity, the farm size distribution has shifted to the right with relatively minor changes in higher moments of the distribution. On the other hand, between 1981 and 1995, a largely unfavorable period to Israeli farmers, the change in the distribution was much more complex. While the overall change in the size distribution of farms was smaller in magnitude than in the earlier period, higher moments of the distribution were not less important than the increase in the mean and led to higher dispersion of farm sizes. Between 1971 and 1981, the contributions of full- and part-time farms to the change in the size distribution were quite similar. Between 1981 and 1995, however, full-time farms contributed mostly to the growth in the average farm size, while the average farm size among part-time farms actually decreased, and their contribution to the higher dispersion of farm sizes was quantitatively larger. This highlights the need to analyze the changes in the entire farm size distribution rather than focusing on the mean alone, and to allow for differences between types of farms.

Seeking transparency makes one blind: how to rethink disclosure, account for nature and make corporations sustainable

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Paolo Quattrone
Keyword(s):  
Social Inequality ◽  
Common Good ◽  
Design Methodology ◽  
Value Added ◽  
Institutional Arrangements ◽  
Content Type ◽  
Corporate Behavior ◽  
Income Statement ◽  
The Common ◽  
Human Actors

PurposeFinancial and nonfinancial disclosures are still anchored to conventional notions of transparency, whereby corporations “push” information out to various stakeholders. Such information is now “pulled” from various sources and addresses aspects of corporate behavior that go well beyond those envisioned by the disclosure framework. This shift makes notions of values, measurement and accountability more fragmented, complex and difficult. The paper aims to bring the accounting scholarly debate back to what and how transparency can be achieved especially in relation to issues of social inequality and sustainability.Design/methodology/approachAfter an analysis of the limitations of current approaches to disclosure, the paper proposes a shift toward normative policies that profit of years of critique of positivism.FindingsDrawing on the notion of value-added, the paper ends with a new income statement design, labeled as Value-Added Statement for Nature, which recognizes Nature as a further stakeholder and forces human stakeholders to give voice, or at least acknowledge the lack of voice, for non-human actors.Originality/valueThe author proposes a shift in the perspective, practice and institutional arrangements in which disclosure occurs. Measurement and transparency need to happen in communication exercises, which do not presuppose what needs to be made transparent once and for good but define procedures on how to make fragmented, complex, multiple and volatile notions of value transparent. Income statements and accounting more in general is to be reconceived as a platform where stakeholders will have to continuously negotiate what counts as the common good in the interest of all, including Nature.

Conventional Legal Regulation of Value-Added Taxation by the Member States of the Gulf Cooperation Counci

2021 ◽  
pp. 232-238
Author(s):  
Dmitry G. Bachurin ◽  
Keyword(s):  
Persian Gulf ◽  
Value Added ◽  
Legal Framework ◽  
Legal Regulation ◽  
Gulf Cooperation Council ◽  
Legal Aspects ◽  
Gulf Countries ◽  
The Common ◽  
National Tax ◽  
The Persian Gulf

The article discusses the legal aspects of supranational legal regulation of value added taxation in the Persian Gulf countries. The novelty of the research lies in the comparative aspect of the legal study of supranational law on the value-added tax in the Gulf countries, which allows formulating fundamentally new characteristics and interpretations that extend the theoretical and legal views on the legal mechanism of VAT, and analyzing the key provisions of the legal regulation of VAT of the states that are parties to the Common VAT Agreement. The issues of the Agreement for the countries of the Gulf Cooperation Council, as well as acts of national legislation on this tax, were studied. The analysis of the provisions of the Agreement allows concluding that the tax instrument this Agreement regulates can be classified as a type of neutral legal regulation of value-added taxation. Its peculiarity is that the country for one reason or another introduces VAT into the national tax system with minimal tax rates and continues to keep it at a low level that does not have a restraining effect on the development of its own industry. This is the reference point for the Common VAT Agreement for the countries of the Gulf Cooperation Council. The research shows that the supranational legislation of the Persian Gulf countries covers the most complex and fundamentally significant issues of legal regulation of value-added taxation, which developed taking into account the accumulated world experience in the administration of this tax. Conclusions have been obtained that the main direction of the adopted supranational legislation is the creation of a unified legal framework for the development of a coordinated legal regulation of VAT in each of the six Arab states of the Persian Gulf. The definitions of concepts that are crucial for VAT regulation are given, among which the following can be distinguished: reverse VAT accrual, input tax, deductible tax, net tax, mandatory registration threshold, voluntary registration threshold, and tax group. In the final part of the work, it is concluded that the second regional system of legal regulation of value-added taxation after the European one is being created, which begins its development on the basis of supranational legislation. Within its framework, the states that are parties to the Agreement shall organize administrative cooperation in the following areas: (1) exchange of information necessary for determining tax accuracy; (2) coordination of synchronized audit procedures and participation in audits; (3) assistance in tax collection and adoption of necessary procedures related to VAT collection.

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