Dynamics of Adjustment in Agriculture

Abstract

The thesis comprises an introduction and three separate essays on aspects of agricultural adjustment processes. The essays specifically address (1) how the productivity of milk production in Norway changes between different periods of the quota system; (2) spatial spill-over effects on Norwegian farmers’ decision to convert to organic production practices; and (3) the prediction of corn yields in the light of climate change. The three studies all address the spatially differentiated, dynamic transformation of the agricultural sector in light of changing policy and biophysical drivers. <br /> The first two studies investigate Norwegian dairy production. The relationship between an evolving quota policy and productivity of dairy farms is analyzed in the first manuscript. The second aims at broadening the insights on conversion to organic production by introducing the effect of potentially negative conversion examples in the neighborhood. <br /> The third study opens a window to the future and delineates the corn yield development in Hungary by simultaneously considering the impact of climate change and the adaptation of the sector using historic data. <br /> The datasets used in the dissertation cover many years through a number of decades. Each chapter takes different approaches towards unfolding the research questions, but a common theme is to employ panel data methods as they are well suited to study the dynamics of adjustment. The employed datasets are balanced or unbalanced and recorded either at the individual unit or grid level. <br /> In the first essay, we find statistical differences in the group means of productivity and efficiency measures under changing dairy quota regimes in Norway and highlight the relationship between farmers’ behavior and policy periods. In the second essay, we demonstrate that neighboring reversion from organic to conventional production and exits of organic dairy exert notable negative spatial spill-overs on organic conversion decisions. We raise awareness of these phenomena for designing more efficient policies in the future. The research reported on in the third essay confirms that rising temperature and decreasing precipitation will negatively affect Hungarian corn yield development but can be compensated by technological progress and behavioral adaptation. We argue that the negative prospects of climate change can be overcome to create a sustainable and prosperous partnership of land and people.