Denmark's inheritance rules strike the right balance

by NORMAN DUNN

I've brought the banks into this because Denmark has, as far as I know, an inheritance law unique in Europe, which stipulates that farms cannot simply be passed on from father to son, or daughter. They have to be paid for in full. So the aspiring heir to the family farm in Denmark has to have access to enough funds -- or the farm is put on the open market. One can argue that this is a good thing. Only the brightest and those who really have a vocation for farming, along with access to enough capital, end up in the industry.

The newcomers do get some help from the government. Denmark's open-door policy for new farming talent starts with a special government saving scheme with tax incentives and ends with a capital loan which is even interest-free for a limited period. One third of the sum saved in the special accounts, up to a maximum of $23,500 equivalent each year, is not taxed.

Banks use the saving track record of young people to help assess credit worthiness. Basic requirements for a farm loan are two years of agricultural training, a five-year production plan for the proposed farm business, and 10 per cent cash deposit. An extra five-month course in management is aimed at helping the new farmer develop a 10-year plan.

Once training is completed, a young farmer can apply for a state-guaranteed loan of up to $240,000 with government paying the interest and capital repayments for the first four years. This is certainly one reason why Denmark's agricultural sector now has a continual flow of non-farming blood entering it and is regarded as one of the most efficient food producing industries in Europe.

When you think of it, the traditions and customs of inheritance are one of the most powerful forces in shaping farming infrastructure nationally. Look at the scene in middle Europe. Although the situation there is changing slowly, huge areas of Spain, Italy, France and Germany remain split into tiny fields often smaller than an acre apiece. This super-division of land and land ownership costs farming in these countries efficiency losses of up to 50 per cent in some cases, and all because of the code that every child in a farm family inherits equal shares of the land.

Nowadays, of course, common sense has come into the arrangement and usually money changes hands to help one member of the family secure the right to farm most of the inherited fields. But that still leaves farms unbelievably scattered. My nearest neighbour in southwest Germany, for example, has some fields more than five miles from his homestead.

The inheritance rules in such countries have left them way behind the likes of Denmark in terms of efficiencies of scale. And talking of scale, the largest family farms in Europe have emerged in countries such as Britain where primogeniture is the tradition. When the eldest of the next generation automatically takes over on the parents' death or retirement, farm structure and size is retained and any capital available is concentrated in the core business. Nowadays, there's an element of fairness between farming family members and, where one child inherits the farm, often the others are paid-off with property or regular endowments from the farm business.

In the British experience, primogeniture has brought bigger and usually more efficient farming businesses. But there's a downside. Taking over the family farm after having worked there since leaving college often leaves the incomer in a kind of financial and managerial straightjacket. And, especially if Dad has retired and lives just down the road, it can be very hard for the next generation to break the mould and try new approaches. Taking over a well-run business can certainly smother enterprise.

Maybe the Danes have got the right balance in European family farm inheritance. Where the business is healthy and the family youngsters have already proved themselves promising farmers, getting collateral to take over is proving no problem. But if farming's really not for the next generation, the government has made sure that there's plenty of bright new talent ready to take over and coax the best out of the land. BF
Norman Dunn writes about European agriculture from Germany.

France and Germany the latest to succumb to BSE panic

by NORMAN DUNN

The British continue to be the worst affected, and U.K. farmers are putting a surprisingly brave face on the tremendous damage the disease has done to their quality beef industry. Thanks to BSE, and government actions to keep the disease out of the food chain, 4.4 million animals worth over $7 billion Cdn have been slaughtered there in the last 15 years. Even as 2000 drew to a close, the year's reported cases in Britain topped 1,600.

Other countries staggering under continued outbreaks include Ireland, Portugal and Switzerland. Europe's first support group for those affected, psychologically as well as financially, by BSE in their cattle was established at the end of 2000 in Ireland. More than 150 farmers gathered for the first meeting.

France, too, was caught off balance by a sudden surge of the disease in late 2000. In 1999, this country reported 22 cases of BSE among its 21 million head of cattle. In the following year, the number of cases increased three-fold. And there could be many more. Tests carried out since mid-summer 2000 on 48,000 slaughtered French cattle are reported to have indicated a BSE-positive rate of two per thousand, although actual results are mysteriously being delayed.

So far, no one really knows what lies behind this recent increase. More seriously, it has been shadowed by a similar increase in the linked human brain-wasting Creutzfeld Jakob Disease (CJD), particularly in France and Britain.

By November 2000, French consumer panic had spilled over the border into Germany, a country claimed till then to be BSE-free. The German parliament had reassured consumers that strict separation from carcasses of all offal regarded as potential carriers of the disease meant that Germany would remain clear. This was a risky statement right from the start, given that the country was surrounded by other countries with BSE and had started for the first time regular testing for the disease with older animals coming in for slaughter.

The reaction when the first case was publicised was as expected. It came at the same time as the giant EuroTier winter livestock fair in Hanover. There, visitors continued round the stands as usual, admiring the live-cow robot milking demonstrations, checking-out new group housing systems for sows, looking at the latest "furnished" battery layer cages with perches, nesting boxes and dust bath facilities.

But nothing was normal for the rest of us. Where there's usually time at EuroTier to ask the minister of agriculture a few questions on policy, to speak with the president of the Farmers Union about the issues of the day and to chat with farmers at the snack bars and coffee counters dotted around the halls, this time the mass media was in control. A hoard of more than 20 television channel teams trampled everyone else out of the way, firing the same questions at any unfortunate politician or expert that strayed into their path: Was there a BSE epidemic on the way? How many people were expected to die of CJD? Why hadn't beef been banned in Germany?

No one was really surprised when beef consumption dropped by 40 per cent virtually overnight. One consequence in my local supermarket was 20 metres of chill counter changing suddenly to horse and kangaroo meat.

A feeder outside Frankfurt told me that, on the day before the first BSE report in Germany, he had been offered the equivalent of $5.85/kg for five 550-560 kg bulls. The next day the slaughterhouse phoned to say that it could only offer half that price. Just two days later, all slaughterers in the region simply stopped buying cattle.

Apart from leaving producers with barns full of unsaleable beasts, the crisis has also hit dairy farmers. Sending an old cow away now costs real money. And the disposal charge doubled in the last month of 2000 to an average $115 a cow. Calf sales have also stopped.

A disquieting aspect of the current BSE crisis, especially in Germany, is the general lack of sympathy for the farmers involved -- not only from the media and the consumers, but from politicians. For instance, Chancellor Schröder's first public announcement on the crisis featured a call for an "end to meat-producing factories out in the country" (although all cases last year in Germany were reported in small-scale family farms). He also stressed that no special compensation was coming out of government coffers for affected farmers.

This is new for Germany. Farmers, especially small family units, have almost always been well looked after by the ruling parties. Most of the public has also accepted the romantic image of wholesome food produced in an idyllic countryside. BSE seems to have destroyed this picture in just a few days.

Or have opinions about country life been readjusting themselves in the public mind for some time now? One of northern Germany's leading farmers commented to me that maybe the agricultural industry itself has some responsibility here. Professional image-makers have talked farmers into discarding the old picture of the cheerful, straw-chewing worker caring for his animals and replacing it with the hard-nosed agribusinessman aiming for large-scale food production at lowest cost.

Now, which version would you rather feel sorry for when the chips are down?BF
Norman Dunn writes about European agriculture from Germany.

Europe and New Zealand experiment with once-a-day milking

By Norman Dunn

With pigs, liquid mix and pipeline feed systems with full or partial slatted flooring have taken over in more than 50 per cent of German and Dutch farms. And even where straw bedding is being insisted on by some pork marketing organisations, straw-flow systems mean the pigs are pulling the necessary bedding out of special hoppers and doing the job themselves.

In dairying too, free stall and parlour systems are now the standard. But what about the milking itself? True, robot or automatic milking systems are making inroads. There are seven different types on the market now and the Dutch manufacturer of just one of those, the Lely Astronaut milking robot, celebrated its 1000th sale in two years this November by sending a small bottle of champagne to every journalist who had written about the system. Mind you, this company could well afford the gift, with the average cost of each unit around $140,000 Cdn! But at the most, a single box unit can handle only 70 to 80 cows. If there are more milkers than this in the herd, another robot has to be brought in. Less than 60 cows, and a single robot would never pay for itself at today's prices.

There is another answer to labour-reduction in milking, though - a system that cuts work-input by half at a single stroke and leaves the farmer with almost the whole of the day free for other tasks. This Nirvana is once-a-day-milking (OAD), dreamed about by generations of tired dairymen but now being actively looked at in Ireland, tried in England and the subject of a long-term trial in New Zealand.

Of course, this is a system that only fits with a very small proportion of low-cost milk production dairy businesses worldwide. It would never work, for instance, with the very high yielding Holsteins in most systems. But where producing from forage and yield per acre are the criteria the idea is certainly attracting a lot of attention.

First, the bad news. In current trials with OAD, yields have dropped by up to 30 per cent per cow. But there's also something on the credit side. The cows need less feed and can be stocked more to the grass/forage acre. Also, cows don't lose body condition at the rate of their heavy-milking sisters on being milked two or three times per day. Experience so far indicates that OAD cows stay healthier and that getting them back into calf is much easier.

Practical experience with the system reported by the Irish Farmers Journal this year included one herd where 15 per cent of the cows were classified as non-cycling when on twice-a-day milking. In the first year of OAD, this figure dropped to three per cent, and went even lower in the second year.

Concentrate feed requirements per cow are, of course, less. Another great bonus according to Irish experience is that with milking heifers OAD has proved very good for the animals, allowing them to keep condition and to grow strongly right through their first lactation.

In New Zealand, where an OAD trial with 50 cows has been running since July last year at Westpark Trust Agricultural Research Station in Taranaki, tighter stocking means that the drop in milk production compared with conventional systems is 18 per cent per acre. But it is felt that the better health and condition of the OAD cows means stocking per acre can be increased still further and could eventually lead to equal milk production per acre for both systems. Comparative research between OAD and conventionally-milked herds is planned to start next year.

Back in Europe, there's appreciation that this is a cost-saving tool with only limited use. But there's also a feeling that it could have a future where herds are small and dairy farmers have other jobs outside of the farm.BF
Norman Dunn writes about European agriculture from Germany.

No-plough is back on European farms

By Norman Dunn

The more advanced arable growers in Germany and Scandinavia were claiming last year that, on average, at least a third of their farms were being sown after minimum tillage, or direct-drilled without any soil preparation work at all. A quick check this fall hints that the no-plough part is now close to half the cropping area on these farms.

Mind you, zero or minimum tillage is nothing new in Europe. It's just that these systems have been a very long time in developing to any size. Minimum tillage - for instance a pass with the chisel plough and then a couple of stubble-incorporation tine operations - has been firmly established on a minority of lighter land farms for over 50 years. Direct drilling - simply burning straw and/or spraying for weeds and then sowing into the stubble - started in earnest here around 20 years ago, although there were pioneers using the system long before that.

But in the early years, neither system lasted long on most European arable units. I remember interviewing English wheat farmers who had gone over 100 per cent to direct drilling in the 1970s. Straw burning was in vogue then and the system worked well, leaving a clean surface, weed- and trash-free, for direct drilling. Environmental laws in the 1980s put a quick stop to straw burning all over Europe, more herbicides were used and then the spectre of resistant grass weeds began to hover over the direct- drill farms. By 1985, many of those who had taken up no-till with enthusiasm five years before were back to using the plough almost every year.

Cost-effective grass weed herbicides were losing their bite very quickly, mainly because the no-tillers were inadvertently using spray routines that actively selected for plant resistance. In the end, ploughing the weeds under was the only thing left to do with them.

Now, the economics of cheaper, all-round herbicides such as glyphosate, and higher prices for almost every other crop input, mean no-plough is back. Farmers here reckon the system brings an average saving of around C$30/acre. But even though the price of tractor fuel has recently doubled in some countries, the indirect savings are the ones that are winning more and more land over to no-plough. Minimum tillage beats wind and water erosion - and surface trash might not look too good to the old ploughman's eye, but it does a great job of protecting tender young plants from the cold winds.

Ploughing-down straw and stubble was never good for top quality sugar beet anyway, especially where dry and cold continental winters prevail, as in Germany and the centre of France. As one grower who's stopped ploughing before beet told me: "Ploughing after cereals meant we ended up with a layer of straw at plough depth which took months to start rotting down. Beet just hate growing into a straw bed, and the result was always forked roots and a cash penalty at harvest time.'

The typical European farmer arable farmer who is now cutting back on the plough tends to choose a minimum cultivation system rather than plain direct drilling. For most heavy land areas, all that is being used now is a single pass with the chisel plough (or grubber as it's called here) after harvest, and a glyphosate spray before drilling. Lighter land needs a bit more work - usually a chisel plough pass to break-up any compaction and then one or two trash incorporation operations before drilling. Most of the new no-plough farmers started by leaving the plough out of the rotation after canola, and went on to do without it after before canola or barley.

But in most European arable farms there still remains a point where ploughing cannot really be ignored, according to most farmers. This is between two consecutive wheat crops. There are still too many diseases that can be carried over to the next crop via the stubble, and so burying the trash is still the best answer for crop hygiene. Those who have left out the plough before sugar beet say the load-bearing capacity of the soil is improved for resisting compaction damage by heavy machinery at harvest. Soil consistency seems to be improving, too, because of more aeration through the workings of a higher worm population.

Are there any drawbacks? Well, nearly everyone farming on heavier soils admits to one: the land takes a good day or two longer to dry out before sowing. But most are finding this is a small price to pay for the loss of weeklong fuel-guzzling, tyre-tearing ploughing operations each year! BF
Norman Dunn writes about European agriculture from Germany.