Despite their complexity, agricultural systems can be characterised by three simple ideas. First, farmers make decisions about land and use of other resources, guided by personal and business-orientated objectives. Second, decisions are made within farm constraints: land, labour, capital and government policy all place limits on production. The natural consequence of these constraints on farm systems is that there are trade offs between the outputs resulting from different land uses. Third, farm-based decisions on land use have environmental consequences that are not accounted for in farm costs of production. There is therefore no business-related incentive for farmer decision makers to reduce pollution from farms.
Work on Agricultural Systems at Nottingham falls into two main themes. The interaction between farmers, farms and the environment, and the resulting trade-offs from these interactions, are captured through Farm Level Models. These have been used to develop least-cost plans for adapting to climate change and reducing greenhouse gas emissions and nitrate loss for different farm types. Recent work has addressed investment in 'lumpy' inputs (irrigation capacity) as a response to climate change and the development of techniques to account for uncertainty in environmental data.
The second theme examines and seeks to explain variation in farm business performance and propose appropriate business management strategies, for example when considering conversion to organic farming. The Rural Business Research Unit at Nottingham is the lead unit of 'Rural Business Research' (RBR), the consortium of leading academic units that undertake economic and environmental studies of the activities of rural businesses throughout England.
The largest research project undertaken by RBR is the Farm Business Survey, funded by Defra. Physical and financial data are collected and analysed for 1900 farms across England. Information is also collected on environmental activities, resource use, farmers' biographical backgrounds and business management practices. Data are analysed to identify the main determinants of business performance and the key factors that lead farmers to improved business efficiency - both technical and economic. In conjunction with colleagues in Crop Science, Management research has examined the most appropriate strategies for arable farmers seeking to convert to stockless organic production, taking into account profit, cash-flow and the manager's attitude towards risk taking.