• Researchers from the University of Oviedo quantify the economic impact of the fragmentation of the soil for the Asturian dairy industry

    July 31, 2013

    The research concludes that a higher concentration of soil could increase in up to 7.8% the efficiency of the livestock industry of the Principality

    How can we increase the efficiency and productivity of the Asturian dairy industry in a territory whose soil has been traditionally fragmented? A group of economists of the University of Oviedo, led by Professor Luís Orea, has calculated the economic impact of this distribution of the land on the Asturian livestock breeders and has determined that a greater concentration of soil could improve between 3.5% and 7.8% the technical efficiency of the dairy industry of the Principality, depending on whether they employ an intensive or an extensive system. The benefits of both systems of exploitation would increase accordingly, but said improvement would be up to 75% greater for extensive exploitation than for the intensive one.

    The researchers from the Faculty of Economics and Business work in the project Productive and environmental behavior of dairy farming: determinant factors, types of farming and compatibility of economic and environmental goals, funded by the Ministry of Economics and Competitiveness. In order to gather all the necessary information about livestock breeding in the Principality, the team has had the collaboration of Central Lechera Asturiana, the Agrupaciones de Explotaciones Lecheras Asturianas and the Council of Agriculture, Breeding and Autochtonous Resources of the Principality of Asturias.

    Employing econometric models, the experts have proved that the impact of the current regional model is higher in the case of extensive livestock breeding, a practice that is more dependant on the use of pastures for feeding the cattle

    The tentative results of the study confirm the negative effect of the fragmentation of the soil on the efficiency of livestock breeding and have been shown in the 13th European Workshop on Efficiency and Productivity Analysis that took place in Helsinki during last June. The research group coordinated by Professor Orea has proved, through ecometric models, that this impact is even deeper in the case of extensive breeding, more dependant of pastures for food for the cattle. The high number of plots that have been used by traditional farms constitutes one of the decisive factors that have led to the progressive disappearance of extensive farming in favor of intensive techniques, which has also had public funding.

    Since the European Union has been implementing policies that aim at reducing the environmental impact of farming and improving the conditions of livestock breeding, the results of this study present different implications for the future of both the policies of the sector and the management of farms. From a political point of view, there should be an improvement of the policies that allow farms to exploit the soil, the current one others, with a lower degree of fragmentation. Breeders and the organizations of producers face the challenge of making the exploitation of additional soil a viable option, in order to reduce the dependency of their economic results of external goods (purchased extracts and fodder). Furthermore, we have to bear in mind that different empirical studies have put forward an additional issue in the management of the extensive systems in comparison with intensive systems, since their results depend on a larger number of activities.

    Concentration of plots

    The experts of the University of Oviedo have developed diverse studies and research projects in the field of farming economy. The tentative conclusions of the current research project are based on a previous study published by Journal of Dairy Science in 2011, which analyzed the impact of the fragmentation of the land in a sample of Asturian dairy farms between 1999 and 2007. Through the application of an econometric methodology, the researchers could see that, for a given surface, the bigger the number of plots for the farms is, the lower the volume of production that they will generate.

    According to data given by SADEI, the concentration of plots between 1998 to 2007 affected and area of 17,545 hectares divided into 50,152 plots, which were in turn grouped into 13,949 new plots. This means that, in average, each new plot occupies the space of 3.5 old plots. According to the estimated econometric model, this reduction of the number of plots inceased the production in 4.1%, while keeping constant the use of resources. This increase in the production translates into an increment of the benefits for the producers of an estimated 11.7%.

    Research team.

    • Luis Orea Sánchez (Lead Researcher)
    • José Antonio Pérez Méndez
    • David Roibás Alonso
    • Alan Wall