1. Survey on wheat productivity determinants and effects of risk management practices Jonas Kathage JRC-IPTS, European Commission October 6, Copa-Cogeca, Brussels AN(14)7343

2. JRC-IPTS The Joint Research Centre (JRC) is the European Commission’s in-house science service. It provides the science for policy decisions. 2 The Institute for Prospective Technological Studies (IPTS) is one of seven JRC institutes. It generate evidence-based responses to policy challenges … that are essentially socio-economic in nature and have a scientific/technological component

3. EU wheat yields are stagnant 3

4. Expert workshop organized by IPTS in November 2012  Important yield determinants  Genetic progress  Climate change  Innovation in inputs and machinery  Policy and regulation  On-farm risk management  Comprehensive analysis lacking, particularly on risk management practices 4

5. Presentation Outline Summary of the survey Adoption of risk management practices Agronomic Financial Relationship between risk management and productivity Land productivity (yield) Total Factor Productivity (efficiency) 5

6. Summary of the survey 6

7. Surveyed regions Hungary350 Central Transdarnubia25 Western Transdarnubia70 Southern Transdarnubia51 Northern Great Plain86 Southern Great Plain118 France350 Champagne-Ardenne69 Picardie75 Centre146 Bourgogne60 7

8. Farm size distributions 8

9. Yield distributions 9

10. Adoption of risk management practices Agronomic Conservation tillage Crop protection products Integrated Pest Management (IPM) Varietal diversity Financial Insurance Liquidity Derivative and production contracts 10

11. Tillage 11

12. Crop protection products 12

13. Integrated Pest Management (IPM) 42% of French 14% of Hungarian have adopted Integrated Pest Management in their wheat production. 13

14. Varietal diversity 14

15. Insurance 52% of French 48% of Hungarian farmers had some form of insurance for agricultural production 15

16. Liquidity 45% of French 60% of Hungarian farmers have sufficient liquidity to face unexpected critical events, such as lower production or prices or higher costs 16

17. Derivative and production contracts 17

18. Risk management and productivity 18

19. Land productivity (yields in kg/ha) FranceHungary AdoptNot adoptAdoptNot adopt Conservation tillage 7.4*6.64.74.6 Crop protection 7.1*5.24.6*3.9 IPM7.6*6.74.34.7* Varietal diversity 7.2*5.44.64.7 * statistically significant difference. Varietal diversity=1 if more than one variety of wheat is adopted. 19

20. Land productivity (yields in kg/ha) FranceHungary AdoptNot adoptAdoptNot adopt Insurance7.3*6.74.8*4.5 Liquidity7.26.94.8*4.4 Contracts7.5*6.74.44.7 * statistically significant difference. 20

21. Total factor productivity (efficiency) First results for financial risk management tools suggest that Insurance, contract farming and IPM significantly increase the efficiency of wheat production 21

22. Summary Representative survey data collected from wheat farmers in France and Hungary Risk management practices are only partially adopted and significant scope exists for wider adoption The adoption of risk management practices can also enhance the productivity of wheat but not in each case 22

23. Thank You Jonas.KATHAGE@ec.europa.eu 23