Agriculture Reference
In-Depth Information
share of cropland is relatively small—Figures 9.4 and 9.5 show density in
relation to total area at different prices (6 and 12 DM per 100 kg/straw).
It was assumed that the government paid a subsidy of 1,510 DM
for each planted hectare of hemp. As total hemp production increases, it
can be assumed that the subsidy levels would decline. Consequently, a
fourth set of production models was calculated to determine how much the
price of hemp straw would have to increase to compensate for reduced
subsidy payments.
4. RESULTS
The primary results of our model analysis of competitiveness of hemp
production for on regular land are visualized in Figure 9.2 to 9.5 and listed
below.
Under current economic and political conditions, hemp production was
competitive with a 1,510 DM subsidy and a straw price of 12 DM/100
kg (Figure 9.3). In most counties hemp production entered the optimal
solution as a production activity (112 out of 126 models) at a
production level equal to the 33% rotational limit. When the straw
price was lowered to 9 DM/100 kg, hemp production entered as an
activity in the optimal production solution for most counties.
If monoculture of hemp is assumed—including slightly higher
pesticide costs and no yield depression—hemp production accounts for
up to 70% of the total areas. Only potatoes, wheat and sugar beets can
compete.
The only counties in which hemp production did not enter the optimal
production solution were those with high grain and canola yields and
subsidies. Generally, hemp production did not enter the solution for
counties in Holstein and NRW.
The threshold price at which hemp entered as a production activity
varied from 5.04 DM/100 kg hemp straw in Barnim county
(Brandenburg) to 13.44 DM/100 kg hemp straw in Holstein and NRW.
Reduction or elimination of government production subsidies would
require hemp processors to pay farmers considerably higher prices to
maintain production. A hemp price of 24 DM/100 kg straw would be
required for hemp production to enter the optimal solution in Barnim
county (Brandenburg).
The competitiveness of hemp as a production activity varied from
north to south and from west to east. Hemp production was most
competitive in Eastern and Southern Germany. In the West and North
it only entered the optimal solution at a crop yield of 8.8 tons straw/ha
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