The transition of East German agriculture led to major structural adjustments that showed some very particular phenomena. For instance, most of the successors of the former agricultural production cooperatives (LPGs) make slight losses and they operate at a higher employment level than new and...

The paper analyses various forms of direct payments using the agent-based model AgriPoliS. The model is fitted to the agricultural region 'Hohenlohe' in Baden-Württemberg which is characterised by intensive livestock farming. The policy simulations show that decoupled payments which are...

Due to Germany’s specific farm structure, the progressive modulation of direct payments decided within the Health Check of the Common Agricultural Policy (CAP) is of particular relevance for German agriculture. In this paper we apply the agent-based model AgriPoliS to shed some light on the...

The objective of this paper is to explore the potential of the real options approach for analyzing farmers’ choice to switch from conventional to organic farming. Understanding the determinants of this decision is relevant in particular for agricultural policy makers when predicting the...

Optimization has been recognized as a powerful tool in teaching and research for a long time. In spite of its well known problem solving capacity, some methodological obstacles have persisted over the years. The main problem is that stochastic variables and their correlations cannot be...

Investment decisions are, as a rule, characterized by uncertainty, irreversibility and flexibility. Simple net present value calculations will not account for these features. In many situations even flexible investment planning with decision trees, which represents the most advanced method of...

The importance of weather as a production factor in agriculture is well established long time and a significant portion of yield fluctuations is caused by weather risks. Traditionally, farmers have tried to hedge against unfavorable weather using insurance, such as crop insurance. In recent...

Since the mid-nineties, agricultural economists discuss the suitability of “weather derivatives†as hedging instruments for volumetric risks in agriculture. Contrary to traditional insurance contracts, the payoffs of such derivatives are linked to weather indices (e.g. accumulated...

In this paper we examine whether there is room for improvement in farm program decisions through the integration of formal mathematical optimisation into the planning process. Probing the potential for improvement, we investigate the cases of four Brandenburg cash crop farms over the last six...