Productivity and technical efficiency of suckler cattle systems Trends for the period 1990 to 2012 Veysset P., Lherm M., Roulenc M., Troquier C., Bébin D. INRA Clermont-Theix, UMRH, 63122 St Genès-Champanelle Economie et Gestion de l’Exploitation d’Elevage Patrick VEYSSET – UMRH-Egeé – veysset@clermont.inra.fr Steps to sustainable livestock, Bristol, UK, 12-15th January 2016

Productivity of the production factors? Context Since 50’s: continuous gains in labour productivity Increase in farm size Decrease in working population in agricultural Specialisation Increase in inputs and capital use Suckler cattle farms Work load problems Simplification of practices (feeding) Stagnation of farm income per worker Productivity of the production factors? Technical efficiency of the production system? Over the last sixty years, we observed continuous gains in labour productivity in French agriculture sector. The increase in farm sizes with less workers entailed some consequences on farm management: a specialization trend and an increase in inputs and capital use. The increase in labour productivity has made work organization a central concern for livestock farmers. As a response, most livestock farmers tend to simplify farm management practices, essentially by simplifying feed management. Nevertheless, farm income per worker has just been maintained, without increasing trend. In this context, it is important to question the productivity of all other production factors and the technical efficiency of the production system. Patrick VEYSSET / Efficiency of beef production systems Steps to sustainable livestock, Bristol, UK, 12-15th January 2016

Hectarage and herds size / AWU: +2,2 to +2,6%/y Objectives To define and to assess the concept of technical efficiency of the production system at the farm scale Evolution over 23 years (1990-2012) of the beef cattle farms efficiency INRA network of Charolais suckler beef farms, 43 farms (constant) Hectarage and herds size / AWU: +2,2 to +2,6%/y Farm Income / AWU : ≈ The objective of this study was to define the concept of technical efficiency of the production system at the farm scale. We analyzed the 23-year (1990–2012) evolutions observed on commercial beef cattle farms from a constant sample of 43 Charolais suckler cattle farms. We have for each farm, each year all the structure, zootechnical, technical and economic data. The main structural trends observed over the period were: - Large increase in hectarage, herd size, and labour productivity. The hectarage and number of livestock units per worker increased by 60%, - Despite this strong increase in labour productivity, income per worker has remained relatively stable, with a high inter-annual variability. Patrick VEYSSET / Efficiency of beef production systems Steps to sustainable livestock, Bristol, UK, 12-15th January 2016

Method Technical efficiency of the production system Efficiency: capacity to obtain good performances with a given quantity of production factors Efficiency = Farm Prod. excl. aids / (Inter. Cons. + Cap. Depr.) Aggregate various inputs and outputs expressed in different units Live-weight, grain, fertilizers, fuel, services, …Kg, litres, hours, … Shared unit: Euros PPAPI: Index of Producer Prices of Agricultural Products PPMPAI: Index of Purchase Prices of the Means of Agricultural Production Annual values of each product and each expenditure of each farm have been reweighted with their own PPAPI and PPMAPI Adjusted for the price effect, year-on-year variations correspond to the volumes variations The efficiency of a holding is its capacity to obtain good performances with a given quantity of production factors. This technical efficiency will be represented by the evolution of the ratio: Volume of farm Product over volume of intermediate consumptions plus fixed capital consumed. This measure has to aggregate the volume of all production output and of the variable production factors. Variation of annual economic values of each output/input can be separate into volume variation and price variation if we know the respective price index of each input/output related to a year of reference. The annual values of each product, and of each farm, have been weighted with their own index of producer prices of agricultural products (PPAPI). In the same way, the annual mean values of each costs, and of each farm, were weighted with their own respective index of purchase prices of the means of agricultural production (PPMAPI). Eurostat publishes these updated index, 2010 being the year of reference. Once weighted to correct for pure price effects, annual evolutions represent evolutions of volumes produced and consumed. Patrick VEYSSET / Efficiency of beef production systems Steps to sustainable livestock, Bristol, UK, 12-15th January 2016

Results: value added components / ha UAA = Live-weight production / ha MFA = Cereal yield (4.7 t/ha) = +13% Fertilizers -14% Equipment maintenance +58% Energy +55% Concentrates +21% administrative and other services +15% Veterinary +6% +6% Volume of output per ha of agricultural area stagnated over the 23 years studied. This stagnated land productivity was associated with lower consumption of fertilizer (-14%). However, these costs were the only expenditures to have decreased in volume terms. Amounts used per ha increased for all other intermediate consumption: cattle feed +21%, veterinary supplies +6%, fuel +55%, equipment maintenance and repair +58%. Aggregate volume of intermediate consumption per ha increased by 13%. Despite the increase in farm size, annual fixed capital consumption per ha also increased, by 6%. Patrick VEYSSET / Efficiency of beef production systems Steps to sustainable livestock, Bristol, UK, 12-15th January 2016

Technical efficiency of the production system Positive correlation: Live-weight productivity Feed self-sufficiency (forage and total) Negative correlation: Concentrates kg/kglw Size of the herd per worker (LU/AWU) Agricultural area per worker (ha UAA/AWU) -0,8% / y Stable volume of farm output per ha with heavier intermediate and fixed-capital consumption per ha meant that technical farm system efficiency has declined over the last 23 years. Annual decline in technical efficiency was 0.8 %/year. This technical efficiency is positively correlated with the animal productivity and to the feed self-sufficiency. It is negatively correlated with the farm size and herd size per worker. Patrick VEYSSET / Efficiency of beef production systems Steps to sustainable livestock, Bristol, UK, 12-15th January 2016

Discussion, conclusion Feed self-sufficiency: key factor of the system efficiency No economies of scale for these beef cattle systems Expansion of farm size with simplification of feeding practices led to heavier use of off-farm resources Lower use of on-farm resources (genetic potential of livestock and plant)  decrease in self-sufficiency and technical efficiency Heavier capital needs  substitution labour / capital No gain on land productivity  wealth creation? Genetic, technical, technological and knowledge progress To offset losses in system efficiency? To increase labour productivity? Agro-ecology concept Face the myth of “labour productivity” and face the development model of the beef production systems, an empty promise? Feed self-sufficiency is a key factor for livestock farmers today, especially with the rising prices on cereal crops and concentrate since 2007. The continual expansion of farm size and labour productivity have led to heavier use of off-farm resources (inputs and capital) to the detriment of better use of on-farm resources (genetic potential of livestock and plant resources). We observed a substitution labour / capital, without increasing the land productivity. This drop in productivity of production factors, and thus in wealth created by the beef cattle farming activity should lead to ask the question of the results of 20 years of genetic, technical, technological and knowledge progress. Were this progress used only to offset losses in system efficiency? And had they only the objective to increase the labour productivity? With this model of development strategy, the transition to agro-ecology could be an empty promise. Patrick VEYSSET / Efficiency of beef production systems Steps to sustainable livestock, Bristol, UK, 12-15th January 2016