Factors affecting farmland prices in Finland

The purpose of the study was to analyse factors affecting the differences in land prices between regions. The key issue was to find out the policy effects on farmland prices. In addition to comprehensive literature review, a theoretical analysis as well as modern panel and spatial econometric techniques were utilized. The study clearly pointed out the importance of taking into account the possible spatial dependence. The data were exceptionally large, comprising more than 6 000 observations. Thus, it allowed a thorough econometric estimation including the possibility to take into account the spatial nature of the data. This study supports the view that there are many other factors that affect farmland prices besides pure agricultural returns. It was also found that the support clearly affects land prices. However, rather than assuming the discount rates for support and market returns to be similar, the rough analysis refers to the discount rate for support being a little lower. If this were true it would indicate that farmers rely more on support income than market returns. The results support the view presented in literature that land values are more responsive to government payments when these payments are perceived to be permanent. An important result of this study is that the structural differences between regions and the structural change in agriculture seemed to have a considerable role in affecting land prices. Firstly, the present structure affects the competition in the land market: the more dense farms are in the region the more there are potential buyers, and the land price increases. Secondly, the change in farm structure (especially in animal husbandry) connected to the policy changes that increase area-based support affects land prices. The effect comes from two sources. Growing farms need more land for the manure, and the proportion of retiring farmers may be lower. The introduction of the manure density variable proved to be an efficient way to aggregate the otherwise very difficult task of taking into account the environmental pressure caused by structural change in animal husbandry. Finally, infrastructure also has a very important role in determining the price level of agricultural land. If other industries are prospering in the surrounding area, agricultural viability also seems to improve. The non-farm opportunities offered to farm families make continuing and developing farming more tempting.

Intensity, productivity and efficiency in agriculture in Finland and implications for N and P fertiliser management

The purpose of this study was to evaluate intensity, productivity and efficiency in agriculture in Finland and show implications for N and P fertiliser management. Environmental concerns relating to agricultural production have been and still are focused on arguments about policies that affect agriculture. These policies constrain production while demand for agricultural products such as food, fibre and energy continuously increase. Therefore the importance of increasing productivity is a great challenge to agriculture. Over the last decades producers have experienced several large changes in the production environment such as the policy reform when Finland joined the EU 1995. Other and market changes occurred with the further EU enlargement with neighbouring countries in 2005 and with the decoupling of supports over the 2006-2007 period. Decreasing prices a decreased number of farmers and decreased profitability in agricultural production have resulted from these changes and constraints and of technological development. It is known that the accession to the EU 1995 would herald changes in agriculture. Especially of interest was how the sudden changes in prices of commodities on especially those of cereals, decreased by 60%, would influence agricultural production. The knowledge of properties of the production function increased in importance as a consequence of price changes. A research on the economic instruments to regulate productions was carried out and combined with earlier studies in paper V. In paper I the objective was to compare two different technologies, the conventional farming and the organic farming, determine differences in productivity and technical efficiency. In addition input specific or environmental efficiencies were analysed. The heterogeneity of agricultural soils and its implications were analysed in article II. In study III the determinants of technical inefficiency were analysed. The aspects and possible effects of the instability in policies due to a partial decoupling of production factors and products were studied in paper IV. Consequently connection between technical efficiency based on the turnover and the sales return was analysed in this study. Simple economic instruments such as fertiliser taxes have a direct effect on fertiliser consumption and indirectly increase the value of organic fertilisers. However, fertiliser taxes, do not fully address the N and P management problems adequately and are therefore not suitable for nutrient management improvements in general. Productivity of organic farms is lower on average than conventional farms and the difference increases when looking at selling returns only. The organic sector needs more research and development on productivity. Livestock density in organic farming increases productivity, however, there is an upper limit to livestock densities on organic farms and therefore nutrient on organic farms are also limited. Soil factors affects phosphorous and nitrogen efficiency. Soils like sand and silt have lower input specific overall efficiency for nutrients N and P. Special attention is needed for the management on these soils. Clay soils and soils with moderate clay content have higher efficiency. Soil heterogeneity is cause for an unavoidable inefficiency in agriculture.

Determinants of farmer retirement and farm succession in Finland

In the past decade, the Finnish agricultural sector has undergone rapid structural changes. The number of farms has decreased and the average farm size has increased when the number of farms transferred to new entrants has decreased. Part of the structural change in agriculture is manifested in early retirement programmes. In studying farmers exit behaviour in different countries, institutional differences, incentive programmes and constraints are found to matter. In Finland, farmers early retirement programmes were first introduced in 1974 and, during the last ten years, they have been carried out within the European Union framework for these programmes. The early retirement benefits are farmer specific and de-pend on the level of pension insurance the farmer has paid over his active farming years. In order to predict the future development of the agricultural sector, farmers have been frequently asked about their future plans and their plans for succession. However, the plans the farmers made for succession have been found to be time inconsistent. This study estimates the value of farmers stated succession plans in predicting revealed succession decisions. A stated succession plan exists when a farmer answers in a survey questionnaire that the farm is going to be transferred to a new entrant within a five-year period. The succession is revealed when the farm is transferred to a suc-cessor. Stated and revealed behaviour was estimated as a recursive Binomial Probit Model, which accounts for the censoring of the decision variables and controls for a potential correlation between the two equations. The results suggest that the succession plans, as stated by elderly farmers in the questionnaires, do not provide information that is significant and valuable in predicting true, com-pleted successions. Therefore, farmer exit should be analysed based on observed behaviour rather than on stated plans and intentions. As farm retirement plays a crucial role in determining the characteristics of structural change in agriculture, it is important to establish the factors which determine an exit from farming among eld-erly farmers and how off-farm income and income losses affect their exit choices. In this study, the observed choice of pension scheme by elderly farmers was analysed by a bivariate probit model. Despite some variations in significance and the effects of each factor, the ages of the farmer and spouse, the age and number of potential successors, farm size, income loss when retiring and the location of the farm together with the production line were found to be the most important determi-nants of early retirement and the transfer or closure of farms. Recently, the labour status of the spouse has been found to contribute significantly to individual retirement decisions. In this study, the effect of spousal retirement and economic incentives related to the timing of a farming couple s early retirement decision were analysed with a duration model. The results suggest that an expected pension in particular advances farm transfers. It was found that on farms operated by a couple, both early retirement and farm succession took place more often than on farms operated by a single person. However, the existence of a spouse delayed the timing of early retirement. Farming couples were found to co-ordinate their early retirement decisions when they both exit through agricultural retirement programmes, but such a co-ordination did not exist when one of the spouses retired under other pension schemes. Besides changes in the agricultural structure, the share and amount of off-farm income of a farm family s total income has also increased. In the study, the effect of off-farm income on farmers retirement decisions, in addition to other financial factors, was analysed. The unknown parameters were first estimated by a switching-type multivariate probit model and then by the simulated maxi-mum likelihood (SML) method, controlling for farmer specific fixed effects and serial correlation of the errors. The results suggest that elderly farmers off-farm income is a significant determinant in a farmer s choice to exit and close down the farm. However, off-farm income only has a short term effect on structural changes in agriculture since it does not significantly contribute to the timing of farm successions.

Uusmaalaisten viljelijöiden arviot uudesta ympäristötuesta

The agro-environmental subsidy scheme is the most important agricultural environmental policy instrument used in Finland. The principal aim of the agro-environmental subsidy is to reimburse farmer the costs of using environmentally sounder farming practices and the measures that aim for preserving the environment. It also serves as an economic incentive for ensuring the large enough participation. The agro-environmental subsidy scheme is to be reformed in 2007. The main question answered in thesis was that whether farmers in Uusimaa region are ready to participate in the environmental subsidy scheme on the basis of the economical reasons or not. The focus is on farmers' opinions about how difficult it is to carry out measures of new environmental subsidy and do these measures change their ways of farming. The analysis is based on an empirical study of the farmers attitudes towards the new environmental subsidy scheme. The theoretical framework of this thesis is based on principal-agent theory and on the theory of the firm. In principal-agent theory environmental subsidy is interpreted as a deal in which farmers function as agents and government as a principal. Theory of the firm provides a theoretical framework for the analysis, through which we aim to analyse how rationally behaving farmer makes decisions by economical reasons to participate in the environment subsidy scheme. The thesis points out that presumably the participation percentage will stay high during the period of the new environmental subsidy scheme.

Benefits of oxygation of subsurface drip-irrigation water for cotton in a Vertosol

Australian cotton (Gossypium hirsutum L.) is predominantly grown on heavy clay soils (Vertosols). Cotton grown on Vertosols often experiences episodes of low oxygen concentration in the root-zone, particularly after irrigation events. In subsurface drip-irrigation (SDI), cotton receives frequent irrigation and sustained wetting fronts are developed in the rhizosphere. This can lead to poor soil diffusion of oxygen, causing temporal and spatial hypoxia. As cotton is sensitive to waterlogging, exposure to this condition can result in a significant yield penalty. Use of aerated water for drip irrigation (‘oxygation’) can ameliorate hypoxia in the wetting front and, therefore, overcome the negative effects of poor soil aeration. The efficacy of oxygation, delivered via SDI to broadacre cotton, was evaluated over seven seasons (2005–06 to 2012–13). Oxygation of irrigation water by Mazzei air-injector produced significantly (P < 0.001) higher yields (200.3 v. 182.7 g m–2) and water-use efficiencies. Averaged over seven years, the yield and gross production water-use index of oxygated cotton exceeded that of the control by 10% and 7%, respectively. The improvements in yields and water-use efficiency in response to oxygation could be ascribed to greater root development and increased light interception by the crop canopies, contributing to enhanced crop physiological performance by ameliorating exposure to hypoxia. Oxygation of SDI contributed to improvements in both yields and water-use efficiency, which may contribute to greater economic feasibility of SDI for broadacre cotton production in Vertosols.

Water-use efficiency and productivity trends in Australian irrigated cotton: a review

The aim of this review is to report changes in irrigated cotton water use from research projects and on-farm practice-change programs in Australia, in relation to both plant-based and irrigation engineering disciplines. At least 80% of the Australian cotton-growing area is irrigated using gravity surface-irrigation systems. This review found that, over 23 years, cotton crops utilise 6-7ML/ha of irrigation water, depending on the amount of seasonal rain received. The seasonal evapotranspiration of surface-irrigated crops averaged 729mm over this period. Over the past decade, water-use productivity by Australian cotton growers has improved by 40%. This has been achieved by both yield increases and more efficient water-management systems. The whole-farm irrigation efficiency index improved from 57% to 70%, and the crop water use index is >3kg/mm.ha, high by international standards. Yield increases over the last decade can be attributed to plant-breeding advances, the adoption of genetically modified varieties, and improved crop management. Also, there has been increased use of irrigation scheduling tools and furrow-irrigation system optimisation evaluations. This has reduced in-field deep-drainage losses. The largest loss component of the farm water balance on cotton farms is evaporation from on-farm water storages. Some farmers are changing to alternative systems such as centre pivots and lateral-move machines, and increasing numbers of these alternatives are expected. These systems can achieve considerable labour and water savings, but have significantly higher energy costs associated with water pumping and machine operation. The optimisation of interactions between water, soils, labour, carbon emissions and energy efficiency requires more research and on-farm evaluations. Standardisation of water-use efficiency measures and improved water measurement techniques for surface irrigation are important research outcomes to enable valid irrigation benchmarks to be established and compared. Water-use performance is highly variable between cotton farmers and farming fields and across regions. Therefore, site-specific measurement is important. The range in the presented datasets indicates potential for further improvement in water-use efficiency and productivity on Australian cotton farms.

Chickpeas! Varietal performance, wet feet and root rot, virus and salinity effects in 2012, Ascochyta management, seed quality, issues in central Queensland and effects of desiccating too early with glyphosate on seed germination

Take home messages: Plant only high quality seed that has been germ and vigour tested and treated with a registered seed dressing Avoid poorly drained paddocks and those with a history of lucerne, medics or chickpea Phytophthora root rot, PRR; do not grow Boundary if you even suspect a PRR risk Select best variety suited to soil type, farming system and disease risk Beware Ascochyta: follow recommendations for your variety and district Minimise risk of virus by retaining stubble, planting on time and at optimal rate, controlling weeds and ensuring adequate plant nutrition Test soil to determine risk of salinity and sodicity – do not plant chickpeas if ECe > 1.0-1.3 dS/m. Beware early desiccation of seed crops – know how to tell when 90-95% seeds are mature

Temporal and spatial patterns of soil water extraction and drought resistance among genotypes of a perennial C-4 grass

The objective of this study was to investigate patterns of soil water extraction and drought resistance among genotypes of bermudagrass (Cynodon spp.) a perennial C-4 grass. Four wild Australian ecotypes (1-1, 25a1, 40-1, and 81-1) and four cultivars (CT2, Grand Prix, Legend, and Wintergreen) were examined in field experiments with rainfall excluded to monitor soil water extraction at 30-190 cm depths. In the study we defined drought resistance as the ability to maintain green canopy cover under drought. The most drought resistant genotypes (40-1 and 25a1) maintained more green cover (55-85% vs 5-10%) during water deficit and extracted more soil water (120-160 mm vs 77-107 mm) than drought sensitive genotypes, especially at depths from 50 to 110 cm, though all genotypes extracted water to 190 cm. The maintenance of green cover and higher soil water extraction were associated with higher stomatal conductance, photosynthetic rate and relative water content. For all genotypes, the pattern of water use as a percentage of total water use was similar across depth and time We propose the observed genetic variation was related to different root characteristics (root length density, hydraulic conductivity, root activity) although shoot sensitivity to drying soil cannot be ruled out.

Drought adaptation of stay-green sorghum is associated with canopy development, leaf anatomy, root growth, and water uptake

Stay-green sorghum plants exhibit greener leaves and stems during the grain-filling period under water-limited conditions compared with their senescent counterparts, resulting in increased grain yield, grain mass, and lodging resistance. Stay-green has been mapped to a number of key chromosomal regions, including Stg1, Stg2, Stg3, and Stg4, but the functions of these individual quantitative trait loci (QTLs) remain unclear. The objective of this study was to show how positive effects of Stg QTLs on grain yield under drought can be explained as emergent consequences of their effects on temporal and spatial water-use patterns that result from changes in leaf-area dynamics. A set of four Stg near-isogenic lines (NILs) and their recurrent parent were grown in a range of field and semicontrolled experiments in southeast Queensland, Australia. These studies showed that the four Stg QTLs regulate canopy size by: (1) reducing tillering via increased size of lower leaves, (2) constraining the size of the upper leaves; and (3) in some cases, decreasing the number of leaves per culm. In addition, they variously affect leaf anatomy and root growth. The multiple pathways by which Stg QTLs modulate canopy development can result in considerable developmental plasticity. The reduction in canopy size associated with Stg QTLs reduced pre-flowering water demand, thereby increasing water availability during grain filling and, ultimately, grain yield. The generic physiological mechanisms underlying the stay-green trait suggest that similar Stg QTLs could enhance post-anthesis drought adaptation in other major cereals such as maize, wheat, and rice.

Modelling interactions between farm-level structural adjustment and a regional economy: A case of the Australian rice industry

Climate change and on-going water policy reforms will likely contribute to on-farm and regional structural adjustment in Australia. This paper gathers empirical evidence of farm-level structural adjustments and integrates these with a regional equilibrium model to investigate sectoral and regional impacts of climate change and recent water use policy on rice industry. We find strong evidence of adjustments to the farming system, enabled by existing diversity in on-farm production. A further loss of water with additional pressures to adopt less intensive and larger-scale farming, will however reduce the net number of farm businesses, which may affect regional rice production. The results from a regional CGE model show impacts on the regional economy over and above the direct cost of the environmental water, although a net reduction in real economic output and real income is partially offset by gains in rest of the Australia through the reallocation or resources. There is some interest within the industry and from potential new corporate entrants in the relocation of some rice production to the north. However, strong government support would be crucial to implement such relocation.

Can sustainable cotton production systems be developed for tropical northern Australia?

This article reviews research coordinated by the Australian Cotton Cooperative Research Centre (CRC) that investigated production issues for irrigated cotton at five targeted sites in tropical northern Australia, north of 21°S from Broome in Western Australia to the Burdekin in Queensland. The biotic and abiotic issues for cotton production were investigated with the aim of defining the potential limitations and, where appropriate, building a sustainable technical foundation for a future industry if it were to follow. Key lessons from the Cotton CRC research effort were: (1) limitations thought to be associated with cotton production in northern Australia can be overcome by developing a deep understanding of biotic and environmental constraints, then tailoring and validating production practices; and (2) transplanting of southern farming practices without consideration of local pest, soil and climatic factors is unlikely to succeed. Two grower guides were published which synthesised the research for new growers into a rational blueprint for sustainable cotton production in each region. In addition to crop production and environmental impact issues, the project identified the following as key elements needed to establish new cropping regions in tropical Australia: rigorous quantification of suitable land and sustainable water yields; support from governments; a long-term funding model for locally based research; the inclusion of traditional owners; and development of human capacity.

Improved management of key northern region weeds: diverse problems, diverse solutions

The cropping region of northern Australia has a diverse range of cropping systems and weed flora. A fallow phase is commonly required between crops to enable the accumulation of stored soil water in these farming systems dominated by reduced tillage. During the fallow phase, weed control is important and is heavily reliant on herbicides. The most commonly used herbicide has been glyphosate. As a result of over-reliance on glyphosate, there are now seven confirmed glyphosate-resistant weeds and several glyphosate-tolerant species common in the region. As a result, the control of summer fallow weeds is become more complex. This paper outlines project work investigating improved weed control for summer fallows in the northern cropping region. Areas of research include weed ecology, chemical and non-chemical tactics, glyphosate resistance and resistance surveys. The project also has an economic and extension component. As a result of our research we have a better understanding of the ecology of major northern weeds and spread of glyphosate resistance in the region. We have identified and defined alternative herbicide and non-chemical approaches for the effective control of summer fallow weeds and have extended our research effectively to industry.

Livelihood, land use and environment interactions in the highlands of East Africa

This study aims at improving understanding of the interactions of livelihoods and the environment focusing on both socio-economic and biodiversity implications of land use change in the context of population pressure, global and local markets, climate change, cultural and regional historical factors in the highlands of East Africa. The study is based on three components (1) two extensive livelihood surveys, one on Mt. Kilimanjaro in Tanzania and the other in the Taita Hills of Kenya, (2) a land use change study of the southern slopes of Mt. Kilimanjaro focusing on land use trends between 1960s and 1980s and 1980s and 2000 and (3) a bird diversity study focusing on the potential impacts of the future land use change on birds in the main land use types on the slopes and the adjacent plains of Mt. Kilimanjaro. In addition, information on the highlands in Embu and the adjacent lowlands in Mbeere of Kenya are added to the discussion. Some general patterns of livelihood, land use and environment interactions can be found in the three sites. However, the linkages are very complex. Various external factors at different times in history have influenced most of the major turning points. Farmers continually make small adaptations to their farming practices, but the locally conceived alternatives are too few. Farmers lack specific information and knowledge on the most suitable crops, market opportunities and the quality requirements for growing the crops for markets. Population growth emerges as the most forceful driver of land use and environmental change. The higher altitudes have become extremely crowded with population densities in some areas higher than typical urban population densities. Natural vegetation has almost totally been replaced by farmland. Decreasing farm size due to population pressure is currently threatening the viability of whole farming systems. In addition, capital-poor intensification has lead to soil fertility depletion. Agricultural expansion to the agriculturally marginal lowlands has created a new and distinct group of farmers struggling constantly with climate variability causing frequent crop failures. Extensification to the fragile drylands is the major cause of fragmentation and loss of wildlife habitat. The linkages between livelihoods, land use and the environment generally point to degradation of the environment leading to reduced environmental services and ecosystem functions. There is no indication that the system is self-regulating in this respect. Positive interventions will be needed to maintain ecosystem integrity.