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Authors
Advisor(s)
Abstract(s)
The agrowood acreage in Brandenburg has increased fifteen-fold since 2008 reaching in 2013 1819ha (Ministerium für Infrastruktur und Landwirtschaft 2013) and therefore the leading position of all federal states in Germany. Despite of the constant rise and the chances associated with the production of agrowood, potential producers have to face a wide range of challenges: uncertainties about yields, high initial investments, a fixation of land for the 20 years` lifetime of an agrowood plantation and an irregular cash flow all 3 or 5 years. A non-transparent market in addition to lacking long term experiences and machinery available, affects the decision-making process of potential producers negatively. In Brandenburg this innovative crop, growing even under harsh conditions, matches the unfavorable agricultural conditions (Murach et al. 2008). Our subjects of investigation are the two prevailing business models in the agrowood sector in Brandenburg: comprehensive cooperation agreements and independent farming. They coexist and mutually interact with synergies as well as obstructions. We combine a qualitative method with guided interviews focusing on planting decision making processes with a modeling approach using different risk levels and yield expectations to analyze transaction and opportunity costs of those two models. Thereby the characteristics and effects of the business models are compared and analyzed. Our results show that cooperation agreements have effects on the actor`s decision by motivating farmers to decide in favor of agrowood. They also contribute to an expansion of agrowood acreage accounting for almost 40% of the total area in Brandenburg in 2012 (Ehm 2013). Furthermore cooperation agreements are affirmed by interviewees to overcome economic, trade and machinery related constraints of agrowood, secure long-term incomes and increase creditworthiness of producers. In contrast, independent producers are acknowledged to have the burden of higher risks, but may benefit from governmental support programs, which not apply for contract farmers.
Description
Poster
Keywords
agrowood production