Adoption of environmental sound and high quality production strategies and financial performance of Belgian glasshouse holdings

In PACIOLI 4 a number of actions were identified for improvement of farm accounting and FADNs. Important issues were the collection of data on high quality agricultural products, environmental impact of production strategies, the creation of econometric models to supply policy-relevant conclusions on the basis of micro-economic FADN data and the improvement of cost effectiveness of FADNs. Interviews with the stakeholders of European FADNs in the RICASTINGS project indicated that the cost efficiency of the FADN can be improved if more use is made of the data (De Bont, 1998). In PACIOLI 6 the advantages of the use of the FADN for modelling relations between management and firm results were presented (Taragola, 1998). As the Belgian FADN is a ’type Y’ FADN a whole set of indicators on firm structure, characteristics of the firm manager and the financial performance of the firm are already available (Van Lierde and Taragola, 1996; Van Lierde and Taragola, 2000). As the marginal cost for collecting
additional data is relatively low, the Belgian FADN seems to be an appropriate instrument for this kind of research.

In the current paper on the basis of FADN data and additional data collected at glasshouse holdings statistical models are estimated in order to supply policy-relevant conclusions with respect to the adoption of environmental sound and high quality production strategies by Belgian glasshouse growers. The aim of the current research is to detect the determinants of environmental and quality management at firm level and their impact on the performance of the enterprise.

Based on a theoretical framework the basic hypothesis is that, besides external variables, personal characteristics of the manager (age, education, personal objectives, …) and firm characteristics (sector, size, business objectives …) determine the strategies adopted in operating the business as well as the performance of the firm.

Data for the research are obtained from accounting data and interviews using a pre-tested questionnaire at 59 holdings specialised in vegetable production and 89 holdings specialised in production of ornamental plants belonging to the Farm Accountancy Data Network (FADN) of the Centre of Agricultural Economics. Cluster analysis, analysis of variance as well as regression analysis are used to analyse the data.

Statistical analysis of the data on quality management reveals that high quality management is positively related to ‘participation in seminars’, ‘expressive objectives’, ‘creativity and innovation’, ‘economic dimension’ and ‘vegetable production’. Investments in environmental sound production techniques are influenced by ‘economic dimension’, ‘participation in seminars’ and the business objectives ‘creativity and innovation’ and ‘growth’. Analysis of the financial performance of the glasshouse holdings indicates a positive and significant association with environmental and quality management.