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4. Income effect of installing animal wastes storage facilitiesIn order to measure the impact of investments in animal wastes storage facilities 2 stage calculations for selected farm types have been made:
The FADN[1] methodology of Farm Income derivation was applied. The tool for calculation was the LP optimisation farm model constructed in the Excel spreadsheet, with the Solver function used[2]. It should be emphasized, that although the optimisation procedure is the integral part of the model, due to adjustments made mainly in the set of constraints mainly, model solutions reflect patterns of livestock keeping and farm structures the most common for Polish livestock farms. Farm Incomes generated by the model are not optimal in terms of choosing the most profitable production structure. It is however probable, that because of the nature of desk calculations on average model Farm Income is over-estimated in relation to the reality of farming practice. This applies especially to the relatively large group of farms of a low level of productivity, including a number of small, subsistence farm holdings. The calculated average income level should be corrected by a difficult to estimate margin.
The balance of yearly costs and benefits was added to calculated Farm Incomes. Costs considered were the following: depreciation (5% annually), interest on capital (3% real interest rate - assuming availability of preferential credits), additional costs of slurry or manure and dung water application (it was assumed that improper storage causes losses in the amount of animal wastes).
Benefits. The assumption was made that proper storage of animal wastes allows saving a certain amount of nutrients (N, P, K). The application of mineral fertilizers can be reduced by this amount without a change of yields. The “positive yield effect” was also calculated on the annual basis. This is understood as a long-term positive impact on yields in crop production, due to proper application time and the improved use of manure (slurry) for adequate crops. The detailed calculations are presented for 12 farm types in tables 1-12 of the Appendix. In a synthetic way the estimated Farm Income effects of investment in selected farm types are presented in table 13. The full scale and limited investments (in dung water tank, assuming dung plate exists) have been considered. Table 13 Value of investments in manure storage facilities and Farm Income effects for selected farm types [in Euro]
The results of calculation show, that the investments range in value from 824 Euro (small, dairy farm on poor soils, partial investment required) up to 17 124 Euro (dairy, large family farm on poor soils, full investment required). It should be explained, that in some cases the Farm Income in farms on good soils is lower, then the respective income calculated for farms with poor soils. This is because of a difference in depreciation cost, usually much higher in farms with better farming conditions For majority of farms with the full investment needed the average yearly effect is negative. Only largest farms in the set of farm types (dairy – 62 ha, pig – 37 ha) may benefit. Partial investments are less costly and the income effect, positive for some farm types, in a number of cases even if negative turns to be neutral for Farm Incomes. The conclusion is that the larger the farm is, the more beneficial investments in animal wastes storage facilities are.
[1] FADN (Farm Accountancy Data Network – an A to Z methodology), 1989. Commission of the European Communities, Luxembourg. [2] “Agenda 2000 Impacts on the Financial Situation of Farms in Selected Existing and Future Member States”, (Majewski E.Davies S., Berg E., Dalton G., Kabat L., Szekely C.), w Studies on the Agricultural and Food Sector in Central and Eastern Europe, vol. 6. IAMO Halle, Wissenschaftsverlag Vauk Kiel KG, 2000. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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