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Grain Producers' Adjustment to Direct Payments and Falling Prices

Author

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  • Hovland, Ivar

Abstract

The main topics of this paper, were how the producers regard higher direct payments, cmd what kind of adjustments they plan to do compared to the current situation with higher prices and lower direct payments. A questionnaire among grain producers revealed that a great majority of them (72,6 %) preferred income through price rather than from acreage support. Producers with yield less than 3.500 kg per hectare, prefeired a system with high acreage support. Adjustment to lower prices will mainly occur by reducing variable costs when a system of high acreage support is implemented. Fertilizing is reduced with 17 kg N per hectare (7.9 per cent) when the grain price is decreased from NOK 1,70 per kg to NOK 1,10 per kg. The famers will attempt to reduce their fixed costs by cooperating with neighbours , buy second-hand machinery and put-off investments.

Suggested Citation

  • Hovland, Ivar, 1995. "Grain Producers' Adjustment to Direct Payments and Falling Prices," 10th Congress, The University of Reading, UK, July 10-15, 1995 346330, International Farm Management Association.
    • Handle: RePEc:ags:ifma95:346330
    DOI: 10.22004/ag.econ.346330
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