SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

This paper tests for the extent of moral hazard problem within a Crop Damage Compensation (CDC) program that is similar to traditional multi peril crop insurances but is publicly funded and openly accessible for all farmers in Finland. We further estimate the potential of using the observed farmer and farm characteristics in ranking and classifying farms according to their incidence towards losses when they are protected. The data are the claimed and granted indemnity payments for each farm over the fifteen year period of 1995-2009. These data are complemented by data on total farm population in 2005. The data suggest that most of the farmers (60%) have not made any claims in the CDC program over the 15 year period. Those farms that claimed compensation...

Exploring long-term land improvements under land tenure insecurity

Palavras-chave: Farm Management; Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/114632

This article explores long-term land improvement (lime application) under land tenure insecurity on leased land. The dynamic optimisation problem is solved by a stochastic dynamic programming routine with known parameters for one-period returns and transition equations. The model parameters represent Finnish soil quality and production conditions. The farmer's decision rules are solved for alternative likelihood scenarios over the continuation of the fixed term lease contract. The results suggest that, as the probability for non-renewal of the lease contract increases, farmers quickly decrease investments in irreversible land improvement and, thereafter, yields decline gradually. The estimated decision rules are a part of larger set of farmer's decision...

Feasibility of the Income Stabilisation Tool in Finland

Palavras-chave: Dynamic programming; Land tenure; Land improvements; Land Economics/Use.

Ano: 2006

URL: http://purl.umn.edu/31954

Liesivaara, Petri; Myyra, Sami; Jaakkola, Antti.

Whole-farm income insurances are promoted in the new post-2013 Common Agricultural Policy (CAP). The current Crop Damage Compensation (CDC) scheme in Finland covers crop failure for farmers who have suffered losses and applied for the payments. This paper analyses the use of the Income Stabilisation Tool (IST) and compares it to the current CDC scheme in Finland. The Finnish Farm Accountancy Data Network (FADN) is used to simulate the costs of IST compensation payments. Special attention is paid to pig farms and their possibilities to manipulate the IST. Results show that the IST is triggered with a high frequency on Finnish farms. The IST would be more costly than the current CDC programme. The results also suggest that the IST would act as an income...

Tipo: Presentation

Palavras-chave: Income stabilization tool; Moral hazard; Farm Accountancy Data Network; Farm Management; Risk and Uncertainty; Q14.

Ano: 2012

URL: http://purl.umn.edu/122537

The Penetration of Financial Instability in Agricultural Credit and Leveraging

Pietola, Kyosti; Myyra, Sami; Heikkila, Anna-Maija.

Factor Markets Coordination: Centre for European Policy Studies (CEPS), Brussels, Belgium

Insure or Invest in Green Technologies to Protect Against Adverse Weather Events?

Palavras-chave: Agricultural and Food Policy; Agricultural Finance.

Ano: 2011

URL: http://purl.umn.edu/117483

Pietola, Kyosti; Myyra, Sami; Niemi, Jarkko K.; Van Asseldonk, Marcel A.P.M..

This paper analyses investments in green technologies when insurance is also an option. Green technologies are defined to have the power to increase productivity and decrease volatility of future revenues. The insurance options involve the scale and coverage either in a yield insurance or in an index insurance. The stochastic process is a combination of insurable stationary short-run process and non-stationary long run process. The optimal decision rules are solved numerically by stochastic dynamic programming. The results suggest that the index insurance maintains market based incentives to invest in green technologies whereas a yield insurance substantially decreases investments, as expected. An actuarially fair yield insurance decreases investments at...

Land Improvements Under Land Tenure Insecurity: The Case of Liming in Finland

Palavras-chave: Investment; Insurance; Uncertainty; Dynamic programming; Green technology; Agribusiness; Agricultural Finance; Financial Economics; Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/100738

This article solves and characterizes optimal decision rules to invest in irreversible land improvements conditional on land tenure insecurity. Economic model is a normative dynamic programming model with known parameters for the one period returns and transition equations. The optimal decision rules for liming are solved numerically, conditional on alternative scenarios on the likelihood that the lease contract and, thus, farmer access to land is either renewed or expired. The model parameters represent Finnish soil quality and production conditions. The results suggest that irreversible liming decreases quickly and the yields decline gradually, when the farmer is confronted with land tenure insecurity caused by uncertain renewal of the lease contract....

Heterogeneous farmland owners: two approaches for objective based classification

Palavras-chave: Land tenure; Liming; Land Economics/Use.

Ano: 2005

URL: http://purl.umn.edu/24418

Pouta, Eija; Myyra, Sami; Hanninen, Harri.

Landowner classifications based on their objectives have been used to describe the heterogeneous group of landowners. As the accurate information on landowners preferences is essential in policy planning and evaluation of the effects of various policy instruments, there is a need to develop feasible methods for classifying land owners. In this study we apply objective based classification to farmland owners using the data of Finnish farmland owners. We compare two classification methods, traditional cluster analysis and latent class analysis, in terms of their criterion validity. The comparison of criterion validity, consisting from convergent, concurrent, discriminant and predictive components of validity, revealed that latent class analysis was superior...

Dynamics of Phosphorus Fertilization and Liming Under Land Tenure Insecurity

Palavras-chave: Heterogeneous; Farmland owners; Classification; Agricultural and Food Policy; Environmental Economics and Policy.

Ano: 2009

URL: http://purl.umn.edu/50787

This article solves and characterizes optimal decision rules to invest in irreversible land improvements conditional on land tenure insecurity. Economic model is a normative dynamic programming model with known parameter for the one period returns and transition equations. The decision rules are solved numerically conditional on alternative scenarios on the likelihood that the lease contract and, thus, farmer access to land is either renewed or expires. The model parameters represent Finnish soil quality and production conditions. The results suggest that irreversible land improvements decrease quickly and the yields decline gradually when the farmer is confronted with land tenure insecurity caused by uncertain renewal of the lease contract.

Farm Level Capital: Capital positions, structures, the dynamics of farm level investments, capital accumulation and leverage positions

Palavras-chave: Agriculture; Dynamic programming; Land Economics/Use; Q15; Q21.

Ano: 2005

URL: http://purl.umn.edu/24633

Myyra, Sami; Pietola, Kyosti; Heikkila, Anna-Maija.

Factor Markets Coordination: Centre for European Policy Studies (CEPS), Brussels, Belgium

Fiscal and trade distorting effects of capital gains tax on land sales - empirical evidence from agricultural land market in Finland

Palavras-chave: Agricultural and Food Policy; Agricultural Finance; Political Economy.

Ano: 2011

URL: http://purl.umn.edu/117488

Pietola, Kyosti; Myyra, Sami; Pouta, Eija.

Capital gains taxes

Fiscal and trade distorting effects of capital gains tax on land sales - empirical evidence from agricultural land market in Finland

Palavras-chave: Capital gains; Taxes; Land; Trade; Fiscal effects; Agricultural Finance; Financial Economics; Land Economics/Use.

Ano: 2009

URL: http://purl.umn.edu/50040

Pietola, Kyosti; Myyra, Sami; Pouta, Eija.

Capital gains taxes are likely to distort the market and resource allocations through so called “lock-in” effect, meaning discouraging trade transactions that trigger the tax payments. When it comes to agricultural land, the lock-in effect implies that the land ownership and active farming deviate from each other and, as a result, land tenancy increases. Increasing land tenancy and land tenure insecurity incur a significant social cost, because they deplete productivity of land by discouraging and delaying irreversible land improvements that would be necessary for maintaining land productivity. This study estimates the fiscal effects of reduction in capital gains taxes imposed on land sales and provides grounds for optimizing the tax scheme. The results...

The proximity of a field plot and land-use choice: implications for land consolidation

Palavras-chave: Capital gains tax; Land sales; Agricultural and Food Policy.

Ano: 2009

URL: http://purl.umn.edu/50953

Grammatikopoulou, Ioanna; Myyra, Sami; Pouta, Eija.

Traditional methods in agricultural economics and agricultural engineering have yielded mixed results when specifying the costs of an unfavourable parcel structure. Concepts related to travel costs and the production function are frequently applied when the costs of farming distant parcels are examined. However, farmers’ perspective regarding preferences for land use is ignored or partly overlapped by predictions made by researchers. Based on applied econometric models fitted to stated preference data, we revealed that the proximity of a field plot is a relevant factor affecting land-use decisions. One-fourth of landowners would change the use of a field plot if the condition of distance was changed. Landowners would continue farming a field plot if its...