Essays on the Investment Behaviour of Danish Farmers

Cand.oecon.agro. Jakob Vesterlund Olsen

defended his PhD thesis in Agricultural Economics

Friday 2 December 2011

Summary

The investment behaviour of Danish pig producers the last 15 years has been investigated in quantitative economic analyses. Until 2008, this period is characterized by increasing land prices and large farm investments. As a consequence, the access to finance in Danish agriculture is found to have roughly doubled during the period. The revealed investment behaviour among pig producers should be seen in this context.
The analyses indicate that younger farmers can learn from their older colleagues. The positive effect from farm investments is most pronounced for farmers in their 50’ies. Both younger and older farmers experience lower efficiency gains from investments. The efficiency gains are largest for the farmers in their 50’ies.

Furthermore, socioeconomic and non-pecuniary elements matter when it comes to investment behaviour. Analyses reveal that farmers’ investment incentives changed from January 2008 to October 2009. It indicates that investment incentives are influenced by the financial conditions. However, it seems as the incentives of non-investors are not affected in the same manner. Thus, the investors’ incentives are most affected by the changing financial conditions.

The results imply that farmers’ investment incentives should be better understood by e.g. farm advisors and banks when investment plans are evaluated. Better knowledge of the investment behaviour is also necessary for improving the effects and efficiency of public investment policies concerning e.g. innovation, environmental preservation and animal welfare in agriculture.

Principal Supervisor

Senior Researcher Mogens Lund, Institute of Food and Resource Economics, Faculty of Life Sciences, University of Copenhagen

Co-supervisors

Assistant Professor Arne Henningsen, Institute of Food and Resource Economics, Faculty of Life Sciences, University of Copenhagen,

Project Manager Stine Hjarnø Jørgensen, Knowledge Centre for Agriculture, Aarhus, Denmark,

Associate Professor , Department of Economics and Business, Aarhus University, Denmark

Assessment Committee

Associate Professor Kurt Nielsen, Institute of Food and Resource Economics, Faculty of Life Sciences, University of Copenhagen (chairman)

Professor Carl-Johan Lagerkvist, Department of Economics, Swedish University of Agricultural Sciences, Uppsala, Sweden

Researcher Agnar Hegrenes, Norwegian Agricultural Economics Research Institute, Oslo, Norway