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Period 01 / 2008 - 04 / 2011
Status Completed
Research number OND1330882


The project intends:
* To address the usefulness and appropriateness of the present Farm Accountancy Data Network (FADN) data systems to measure cost of production for agricultural commodities.
* To study the feasibility of developing a general cost of production model for EU agriculture that is easy to use by practitioners and reliable in terms of generating relevant analysis for agricultural production and policy analysis.
* To test and implement this cost model in an EU context with the idea in mind that it can be applied on a large scale (i.e. several agricultural commodities and large number of member countries).
* To assess the relationship between cost structure and farm performance, farm technology, environmental quality and farm heterogeneity with FADN databases.
* To provide methodological improvements to the above general cost of production model
* To undertake the evaluation of agricultural policy measures using FADN data indicators

Research objectives:
The contributions of this project to the existing knowledge of cost studies in agriculture could be summarized as follows:
* A proposed general cost of production model that is built in a theoretically consistent way and estimated with recent powerful econometric procedures such as entropy and Bayesian techniques. This latter aspect is quite innovative due to its large scale application to many EU-member countries.
* The implementation of this former model in the form of a ready-to-use computer tool.
* An empirical and policy focus. The numerous empirical applications that will be conducted in this proposed project should provide policy makers with a wide range of tools and comparable quantitative information (cost) that can be fed into agricultural policy impact assessment.

Results and products:
The expected outputs associated with the above objectives include the following:
* A review of the EU FADN system including: i) a special emphasis on its underlying accountancy framework and cost concepts, ii) an examination of its usefulness from a statistical point of view, and iii) an analysis of addressing and incorporating off-farm business activities.
* A review of experiences of estimating cost of production in the EU and other major agricultural producing countries (US, Canada and Australia)
* The development of a general (econometric) model used to estimate cost of production for major agricultural products.
* The application of the former model to several agricultural products (namely crop products, milk and pigs) across several member countries using FADN data
* An operational computer tool with user-friendly interface that can be used by relevant services of the Commission to estimate costs of production for agricultural commodities
* Extensions and further applications of estimating cost of production in EU agriculture to study: farm efficiency and the competitiveness of crop and dairy sectors in the participant countries.
* The development and implementation of alternative microeconomic models able to represent farm technologies and relative cost structure on the basis of data and information available in national FADN systems and EU FADN data base.
* Applications studying the relationships between the costs of producing commodities across the EU and its impact which agriculture exerts upon the landscape and natural environment (i.e. multifunctionality of agriculture).
* New methodological applications of the general cost of production of model aimed at capturing the diversity and heterogeneity of EU agriculture.
* The development and implementation of farmed-based models that use production cost estimates to evaluate various agricultural measures on agricultural, environmental, financial and socio-economic indicators,

Abstract (NL)

Doel van dit project is om te komen tot een model dat de kosten per produkt gaat berekenen op basis van de EU-FADN database (Farm Accountancy Data Network databse).

Het project heeft de volgende stappen.
* Literatuurstudies.
* Aanpassen en verbeteren bestaande Franse cost of production model
* Toepassingen met verbeterde cost of production model

Model voor het bepalen van kosten per produkt beschikbaar op het LEI.

Publicaties bij dit project zijn beschikbaar via deze Link

Related organisations

Related people

Researcher Drs. J.A. Boone
Researcher Ing. W.H. van Everdingen
Project leader A.D. Verhoog

Related research (upper level)


D18200 Plant production and animal production
D70000 Economics and Business Administration

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